Topic: Fiat Currency Always Fails - page 5. (Read 2101 times)

I understand what you want to say and in most cases it is quite reasonable to assume that fiat doesn't have any intrinsic value. However, technically, money, any money for that matter, has a certain intrinsic value for just being money, for being used as money. It is specific to an object being money, not the object itself. This is called transactional utility, which essentially comes down to advantages that money provides over direct exchange of things, in other words, barter. And this utility can be measured in money terms too, i.e. in the same money (understanding that is not quite straightforward, though). It is called the price of money, and it typically considered to match the overnight interest rates that large banks use to borrow and lend from each other in the interbank credit market.

Dollar itself has adjusted from a proper link to some kind of unknown backing and is entering its final stage of no backing at all except the willpower of foreign creditors to keep buying debt despite a long term trade imbalance and a potential trade sanction war to discourage trade.      Its all adding up to make dollar prospects unlikely to best over any solid alternative.

The point is these things happen gradually, for example with the USA dropping gold at Nixon's command it still left some standards left for a few years after like the Swiss held a gold backed currency for decades until the end of the century.   They recently voted to return to a gold standard but instead dropped a policy of duplicating EURO money printing which helped restore some value to their national currency.

Other countries will not collapse from just one country.   I dont even think USA will cease for the idea of paper, alternatives will be found and BTC is just one of many hence why its most important it be made as easy to use as possible for a diverse population.   Other possibles are commodity backed currency such as Canada or Australia which in the main are large land masses with centuries of assets to back the worth of a national note.  USA can justify returning from a dollar failure, it just be a hiccup not the grand melt down some might fear.   We will be better of without false dollar value, collapse is not the result but unsuppressed growth.   This is presuming we dont do silly stuff like go to war, debt failing can produce some angry people

Fiat money is money that has no intrinsic value (material value). He only keeps extrinsic value, namely the recognized exchange rate and obtains legality from the state.

Yes in the first place, crypto amd fiat are very different from each other. Characteristics and even its value they are just both a curremcy which people need. Fiat will always be fiat even it fails unlike to crypto that when it fail it will be useless to people who have it.

There is no fiat that failed, so far Fiat has been very helpful in the community. fiat has existed since a long time ago, maybe now we can say that fiat failed because the economy is increasingly pressing so it raises the assumption of another currency.

Yes, fiat money being not back by anything, lets governments off the leash and gives them an instrument to abuse, and it's not surprising that most of politicians do abuse it following their selfish goals.

I think it was not born to fight. So there will be no failure. The main purpose is to promote the economy and give people economic exchanges. The appearance of it has centuries of currency. So there will be no battle to fail. It is the existence that exists in this life. That is my opinion.

This is true but the big problem here is not that fiat currency fails but the terrible effects it has in the economy in general and in the economy of each person, when the fiat currency fails it tends to sink the country and everyone becomes poorer because of it and then you need to trust that the government is going to finally get it right when they issue a new currency.

yes, right, competition between fiat and crypto does not need to be precisely the two must work together as a way to increase the second value of the money.

Yes, fiats fail eventually, but their downfalls don't come about entirely on their own. It is the downfall of the state which ultimately leads to the collapse of its money, not the other way round.

Regarding Bitcoin becoming a currency, you just said what can be called a tautology of sorts. Being a currency already means real life usage, by definition. In other words, if Bitcoin is used, it is already a currency. Or to put it differently, being a currency suggests being widely used in real life as a means of exchange. It is just two different descriptions or definitions of the same thing. But whether Bitcoin will actually become used globally (on par with fiat monies) is a different story, though.

Very nice Smiley

I think fiat and cryptocurencies have more in common than we generally assume because they both rely exclusively on trust and the law of offer and demand. That said fiat are also indirectly backed by networks of banks and central banks and many other institutions yes. What I like  the most in crypto is the transparency of the rules (codes) and the endless possibilities in the real of smart economies and digital scapes.

I like both fiat currencies and cryptocurrencies. The rise and fall of either fiat and bitcoin are nothing to go away from. I see it to be a same level currencies though fiat is known to fail. I don't dispute that fact.

Fiat currencies are considered far more stable than commodity-backed currencies. That's because the value of a commodity is based on its stability, and its price will tend to fluctuate based on its physical reserves. It has a high risk of eventually becoming devalued and worthless as a result of economical inflation. A fiat currency system comes into existence as a result of excessive debt and the resulting hyperinflation.

Although I agree that fiat currency always fails, it will still continue to exist. Somehow, fiat is a bit like bitcoin in the sense that the exchange rate goes up and down quite frequently. Plus I do not think that there is and should be a competition between fiat and cryptocurrency, right?

The ramifications of the occurrence in the money depreciated state he needs to pay more for items and administrations from abroad, though abroad individuals will be more items and administrations from nations debased in their monetary standards. This is a genuine shamefulness, on account of the failure of the legislature to keep up the estimation of its cash, because of the utilization of fiat cash.

I love Bitcoin and I believe that it can become an international currency but I am also sure we will never get rid of fiat. The traditional money is very convenient no Internet is needed.

The article you shared explains only paper money which is in history was not backed by gold that's why it fails. In recent generation of currencies, Fiat is a strong testament that a countries economy is growing or falling.

Nothing at all will make bitcoin stop from being a currency as long as its real life usage starts becoming more pronounced.
On the issue of fiat failing, I would not say it totally does, but we all know how much fiat has been weakened several times and still keep getting weak due to all the manipulations and controls by the government,  which at a point, I seriously hope it does not end up imploding. That will be too much to assume anyway but in this case we are not just talking about USD, but fiats in general.

Yes, this is how matters stand with fiat vs. so-called hard currencies backed up by gold, silver, or any other tangible asset. But it is hard for many or even most people to understand that as they see the value of their money being constantly eaten away by inflation. In the majority of countries around the world annual inflation is two digits anyway, and in some like Venezuela it is outright ruinous. But it is not the fault of fiat money conceptually, it is rather the failure of the government that runs that currency. It is like a potent drug which can save your life but it can also lead to devastating consequences if misused or abused.