Bitcoin does not have a volatility problem! - page 2.

beetcoin

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Quote from: Este Nuno on July 22, 2014, 03:34:37 PM

If all money was fiat money then it would be redundant to call any money fiat money. In modern english fiat refers to government issued legal tender.

Quoted from your own article: "the word “fiat” refers to a government decree that makes money money,"

yeah the logic doesn't make any sense. look at this part in the article:

Quote

In both cases, what makes Tide detergent, or cigarettes, or the US dollar, or Bitcoin, or whatever, a currency, is simply common agreement that these an item of currency is valuable. What makes it possible to buy drugs with Tide is not because Tide is useful as a detergent. It’s because drug dealers and users have agreed that it is currency.

tide detergent has a tacit use - to clean your clothes. so why is it being compared to fiat currency? if druggies didn't use it for trade, it would still have a use or some sort of value (clean your clothes). i'm not sure you could say the same about paper notes.

sed

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Quote from: adoni on July 22, 2014, 02:08:21 PM

Bitcoin IS a currency

It's a perfect example of a fiat currency, just like the USD is a fiat currency.

ANYTHING a group of people AGREE to accept in exchange for goods and service is by definition a fiat currency

While a real 'currency' has something backing it, there are no real currencies today, it's all FIAT CURRENCY

A fiat currency is only as good as its TRUST FACTOR

Be it shells or coconuts or sticks or worthless pieces of paper it's all fiat, with the exception of coconuts, that is something of VALUE since it's a food that can also be processed into coconut products.

Much of recent history has been currency, backed by Gold or Silver, but today all currency is FIAT and no one can argue that btc is not now a fiat currency, IT IS

Wait a minute, you suggested a contrast between a "real currency" and a "fiat currency" where "real" "has something backing it" and "fiat" is "ANYTHING a group of people AGREE" to accept". But the contrast here isn't very clear.

First, note that (1) even if there is "something backing" a currency, it still takes agreement that that thing is valuable in oder for it to be a currency. I mean, imagine a currencty "backed" by leaves of the black cottonwood tree. Each token in the currency would be exchangable for a certain, fixed, amount of black cottonwood leaves. However, it's not really a currency unless people agree to value black cottonwood leaves in this way. Therefore any currency "real" or "fiat" obviously requires agreement.

Second, note that bitcoin is indeed backed by an item with true scarcity---the mathematical scarcity of the solution to the hashing problem for transaction blocks. This is scarcity is just as real as the scarcity of gold/diamonds/metals, etc. In fact, possibly more real because it's possible (if difficult) to manufacture diamonds (thus changing the scarcity) while it's impossible to change the scarcity of solutions the the hashing problem.

Anyway, I just think that you haven't thought this all the way through.

Este Nuno

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amarha

If all money was fiat money then it would be redundant to call any money fiat money. In modern english fiat refers to government issued legal tender.

Quoted from your own article: "the word “fiat” refers to a government decree that makes money money,"

Lauda

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Terminated.

Quote from: Este Nuno on July 22, 2014, 02:09:24 PM

Bitcoin is presented as a currency to be used on a daily basis. A stock is an entirely different instrument which is not meant to be exchanged for value often, but generally meant to be an investment that is held over time.

You can't compare the two. And there are lots of stocks that are much less volatile than bitcoin. Someone in finance can give you the hard numbers to back this up as well. Volatility is measured, and even without the hard numbers a simple look at many popular stock charts over the last 5 years will show less volatility than BTC.

Well indeed, but many are holding and even being told to buy and hold Bitcoins. I rarely see someone say that you should use them (to the newer people). It does act as stock to a certain degree.

StevenS

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Quote from: adoni on July 22, 2014, 03:01:22 PM

Come on man wiki sucks, haven't you heard?

True, you can't always depend 100% on Wikipedia, because it is edited by "ordinary people" like us, so before quoting Wikipedia, it is best to find other sources as well.

In this case, I checked a number of other sources, including dictionary.com, which is based on the dependable Random House Dictionary, and says:

Quote

paper currency made legal tender by a fiat of the government, but not based on or convertible into coin.

The Oxford Dictionaries, another reputable source, says:

Quote

Inconvertible paper money made legal tender by a government decree.

Also most of the "business" or "investment" online dictionaries agree with these.

On the other hand, another dependable dictionary, Merriam-Webster says:

Quote

money (as paper currency) not convertible into coin or specie of equivalent value

...so that would fit your definition.

In summary, with one exception I found, most English dictionaries define fiat currency as decreed by government.

beetcoin

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Quote from: adoni on July 22, 2014, 03:01:22 PM

Come on man wiki sucks, haven't you heard?

www.WikiSucks.com

I'm not redefining it, I'm stating historical facts and educated experts in the history of commerce will agree with me.

You don't need any government to create a fiat currency, all you need is a group of people that AGREE to use something of no real value for value in a commerce system.

Now beads and shells were a currency in ancient cultures, that's not barter, it's a fiat currency.

So historically through thousands of years fiat currencies have existed in many parts of the world and I don't care how wiki idiots define it.

I KNOW WHAT A FIAT CURRENCY IS

Good examples of modern fiat with NO GOVERNMENT CONTROLS is how cigarettes in jail are a currency or a fiat system.

As well as Tide with drug dealers.

http://www.forbes.com/sites/pascalemmanuelgobry/2013/01/08/all-money-is-fiat-money/

wtf are you talking about, cigarettes do have value outside of being currency. you can smoke it.

also, it's easy to denounce the source of a claim in order to support yours. almost everywhere else, fiat is defined as government controlled http://www.investopedia.com/terms/f/fiatmoney.asp

adoni

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Come on man wiki sucks, haven't you heard?

www.WikiSucks.com

I'm not redefining it, I'm stating historical facts and educated experts in the history of commerce will agree with me.

You don't need any government to create a fiat currency, all you need is a group of people that AGREE to use something of no real value for value in a commerce system.

Now beads and shells were a currency in ancient cultures, that's not barter, it's a fiat currency.

So historically through thousands of years fiat currencies have existed in many parts of the world and I don't care how wiki idiots define it.

I KNOW WHAT A FIAT CURRENCY IS

Good examples of modern fiat with NO GOVERNMENT CONTROLS is how cigarettes in jail are a currency or a fiat system.

As well as Tide with drug dealers.

http://www.forbes.com/sites/pascalemmanuelgobry/2013/01/08/all-money-is-fiat-money/

beetcoin

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Quote from: adoni on July 22, 2014, 02:54:46 PM

by definition fiat currency is something of no real value that a group of people accept as having value, granted most fiat currencies have had a government controlling it, however it has existed for millennia.

Original economies for humans were 'barter', mostly foods traded among people, a pig for x chickens, etc. But food is perishable usually so eventually barter economies had to move into a system backed by something of value other than food, primitive economies were built on many fiat systems with no real governments, beads and shells, etc, are all examples of primitive fiat currency systems.

So believe what you want, but if you discourse upon such themes with educated professors and such they will agree my definition fits fiat systems as a whole throughout history, although recent fiat currencies have had government controls.

no, your definition is wrong. you can't go around and relabel what has been labelled. look at wikipedia's definition. when the sky is blue, you call it blue - not grey. http://en.wikipedia.org/wiki/Fiat_money

adoni

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by definition fiat currency is something of no real value that a group of people accept as having value, granted most fiat currencies have had a government controlling it, however it has existed for millennia.

Original economies for humans were 'barter', mostly foods traded among people, a pig for x chickens, etc. But food is perishable usually so eventually barter economies had to move into a system backed by something of value other than food, primitive economies were built on many fiat systems with no real governments, beads and shells, etc, are all examples of primitive fiat currency systems.

So believe what you want, but if you discourse upon such themes with educated professors and such they will agree my definition fits fiat systems as a whole throughout history, although recent fiat currencies have had government controls.

Bottomline is fiat has no real value and a group of people AGREE to a value in doing trade or commerce.

beetcoin

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Quote from: AliceWonder on July 22, 2014, 02:13:48 PM

Quote from: adoni on July 22, 2014, 02:08:21 PM

Bitcoin IS a currency

It's a perfect example of a fiat currency, just like the USD is a fiat currency.

ANYTHING a group of people AGREE to accept in exchange for goods and service is by definition a fiat currency

No, fiat currency has value because it has been declared to by a governing body.
Bitcoin is not fiat.

wtf, i didn't notice that he referred btc to fiat. he might be parroting a term that gets thrown around a lot, without knowing its meaning. not sure if he knows what that term means http://en.wikipedia.org/wiki/Fiat_money

Quote

Fiat money is currency which derives its value from government regulation or law. It differs from commodity money, which is based on a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange. The term derives from the Latin fiat ("let it be done", "it shall be").[1]

bitcoin can be a bit confusing because it's a quasi everything.. it can be a currency, commodity, store of value.. why can't we just call it that? it's not 100% a currency, not 100% a store of value.. it has bits and parts of many kinds of assets.

AliceWonder

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Quote from: adoni on July 22, 2014, 02:08:21 PM

Bitcoin IS a currency

It's a perfect example of a fiat currency, just like the USD is a fiat currency.

ANYTHING a group of people AGREE to accept in exchange for goods and service is by definition a fiat currency

No, fiat currency has value because it has been declared to by a governing body.
Bitcoin is not fiat.

beetcoin

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Activity: 434

Merit: 250

Quote from: Este Nuno on July 22, 2014, 02:09:24 PM

Bitcoin is presented as a currency to be used on a daily basis. A stock is an entirely different instrument which is not meant to be exchanged for value often, but generally meant to be an investment that is held over time.

You can't compare the two. And there are lots of stocks that are much less volatile than bitcoin. Someone in finance can give you the hard numbers to back this up as well. Volatility is measured, and even without the hard numbers a simple look at many popular stock charts over the last 5 years will show less volatility than BTC.

well, in that case, i'd like to see people stop comparing bitcoin to the internet.. because they are even less similar to bitcoin than stocks are.

Este Nuno

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amarha

Bitcoin is presented as a currency to be used on a daily basis. A stock is an entirely different instrument which is not meant to be exchanged for value often, but generally meant to be an investment that is held over time.

You can't compare the two. And there are lots of stocks that are much less volatile than bitcoin. Someone in finance can give you the hard numbers to back this up as well. Volatility is measured, and even without the hard numbers a simple look at many popular stock charts over the last 5 years will show less volatility than BTC.

adoni

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Bitcoin IS a currency

It's a perfect example of a fiat currency, just like the USD is a fiat currency.

ANYTHING a group of people AGREE to accept in exchange for goods and service is by definition a fiat currency

While a real 'currency' has something backing it, there are no real currencies today, it's all FIAT CURRENCY

A fiat currency is only as good as its TRUST FACTOR

Be it shells or coconuts or sticks or worthless pieces of paper it's all fiat, with the exception of coconuts, that is something of VALUE since it's a food that can also be processed into coconut products.

Much of recent history has been currency, backed by Gold or Silver, but today all currency is FIAT and no one can argue that btc is not now a fiat currency, IT IS

Meuh6879

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volatility ?
this month : 10 Euros MAX of low/high value = 450 Euros for 1 BTC.

wolfYella

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The volatility problem that bitcoin has is that it's price is not stable.

Daniel91

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Quote from: roslinpl on July 22, 2014, 12:59:55 PM

Quote from: buddhamangler on July 22, 2014, 12:40:17 PM

I'm sick and tired of hearing this over and over.

Bitcoin has a "Market Cap" of 8 billion dollars where the perceived "value" hangs by a thread almost all the time. What regulation will be passed? Will China ban it? OMG Amazon takes Bitcoin. OMGWTFBBQ the banks are shutting down accounts. Add to this the huge potential of Bitcoin itself and you have a recipe for volatility. This is not a bad thing! Price discovery for Bitcoin will continue for a long time.

Stocks regularly gain/lose huge percentages of value, do you ever hear that there is a "volatility problem" with the stock market? NO

This perception that Bitcoin cannot be a currency because it is so volatile has to stop. It IS a currency now. The volatility is caused by normal price discovery on something that "could" change the world.

Is anyone else sick of this?

Hi

You must breath and relax.

1st - Bitcoin is not a currency. You might think it is because you can pay with Bitcoin for many cool and different things. But Bitcoin is not a currency. It is a digital currency. A currency for people over the Interweb.

But It is not a currency at the moment

and it is nothing BAD!

When Bitcoin will became a currency - regulations will come to it. I mean gov regulations.

2nd - There is a lot of volatility in Bitcoin

And most of us likes it when we talk about market price volatility

3rd - Yes. Price is not yet discovered. And more likely it is sure that it will be much much higher after few years.

Regards.

I can agree with the most points but I think that very soon we will have to give new definition of currency.
I think concept that currency must be in the paper form, and that some bank or country must be behind, soon will be over.
Of course, this will not happen overnight but gradually, as Bitcoin come closer to the ''mainstream'' status.

beetcoin

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Quote from: buddhamangler on July 22, 2014, 12:40:17 PM

I'm sick and tired of hearing this over and over.

Bitcoin has a "Market Cap" of 8 billion dollars where the perceived "value" hangs by a thread almost all the time. What regulation will be passed? Will China ban it? OMG Amazon takes Bitcoin. OMGWTFBBQ the banks are shutting down accounts. Add to this the huge potential of Bitcoin itself and you have a recipe for volatility. This is not a bad thing! Price discovery for Bitcoin will continue for a long time.

Stocks regularly gain/lose huge percentages of value, do you ever hear that there is a "volatility problem" with the stock market? NO

This perception that Bitcoin cannot be a currency because it is so volatile has to stop. It IS a currency now. The volatility is caused by normal price discovery on something that "could" change the world.

Is anyone else sick of this?

they don't swing as violently as bitcoin, which is the point. bitcoin can lose 20% of its value in a single day. with stock shares, it doesn't drop that fast.

dropping 10% in one day (say going from $600 to $540) is not really out of the norm for bitcoin. if a stock dropped by 10% in one day, it would be considered a crash.

roslinpl

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Quote from: buddhamangler on July 22, 2014, 12:40:17 PM

I'm sick and tired of hearing this over and over.

Bitcoin has a "Market Cap" of 8 billion dollars where the perceived "value" hangs by a thread almost all the time. What regulation will be passed? Will China ban it? OMG Amazon takes Bitcoin. OMGWTFBBQ the banks are shutting down accounts. Add to this the huge potential of Bitcoin itself and you have a recipe for volatility. This is not a bad thing! Price discovery for Bitcoin will continue for a long time.

Stocks regularly gain/lose huge percentages of value, do you ever hear that there is a "volatility problem" with the stock market? NO

This perception that Bitcoin cannot be a currency because it is so volatile has to stop. It IS a currency now. The volatility is caused by normal price discovery on something that "could" change the world.

Is anyone else sick of this?

Hi

You must breath and relax.

1st - Bitcoin is not a currency. You might think it is because you can pay with Bitcoin for many cool and different things. But Bitcoin is not a currency. It is a digital currency. A currency for people over the Interweb.

But It is not a currency at the moment

and it is nothing BAD!

When Bitcoin will became a currency - regulations will come to it. I mean gov regulations.

2nd - There is a lot of volatility in Bitcoin

And most of us likes it when we talk about market price volatility

3rd - Yes. Price is not yet discovered. And more likely it is sure that it will be much much higher after few years.

Regards.

buddhamangler

member

Activity: 74

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I'm sick and tired of hearing this over and over.

Bitcoin has a "Market Cap" of 8 billion dollars where the perceived "value" hangs by a thread almost all the time. What regulation will be passed? Will China ban it? OMG Amazon takes Bitcoin. OMGWTFBBQ the banks are shutting down accounts. Add to this the huge potential of Bitcoin itself and you have a recipe for volatility. This is not a bad thing! Price discovery for Bitcoin will continue for a long time.

Stocks regularly gain/lose huge percentages of value, do you ever hear that there is a "volatility problem" with the stock market? NO

This perception that Bitcoin cannot be a currency because it is so volatile has to stop. It IS a currency now. The volatility is caused by normal price discovery on something that "could" change the world.

Is anyone else sick of this?

Topic: Bitcoin does not have a volatility problem! - page 2. (Read 2103 times)