Topic: fiat vs commodity (Read 366 times)

well, it seems I missed something here, it seems what you said is true when a bear market occurs people look for stable coins to hold, because they are afraid that when they hold coins the price will fall.
It seems like you see it from the other side too.

nah i agree woth you dollar does not rise that fast and does not fall that fast, there are two sides and there are advantages and disadvantages to each, although in the long run fiat will still lose.
but the effect of volatility in crypto is very pronounced compared to fiat in the near term.

Fiat money price is declining day by day due to inflation over the world, So It is easy calculation if you will put fixed amount of money in bank that price will be decrease after 5 years. Bitcoin investment is high profitable to bank and high risky as well as. Online money can be hacked but in the bank your money is safe.

At all cost I will still prefer to commodity to fiat because if my business should go well then I will have something  sustainable and possibility of increase of property so that is what I feel and and no matter the risk all risk all worth taking so and the value of faith will decrease and you might end up spending it and many more so the only thing I suggest is invest and any time you make profit you will be proud of your self.

if you save 100 usd in the bank and you withdraw it, let's say 10 years in the future, then your money will still be 100 usd when you withdraw it, there is no decrease in value or anything else. you only feel the decrease in value when you spend 100 usd in supermarkets or other places, such as the price of mcd which was originally 3 usd could become 8 usd, this is because inflation reduces the purchasing power of fiat. that's why banks provide interest on deposit products to balance the value of money in the future.

and for bitcoin, if you invest 100 usd today and hold it for the next 10 years, its value could reach 5000 usd or even 10000 usd when you sell it because the increase in the value of bitcoin could be significant in the 10 years when you hold it.

so from these two examples you can see which has better potential in the future, whether fiat or bitcoin.

I mean you could have it both ways to be fair. I can see that bitcoin was 68k just a few years ago, we can say that bitcoin went up during that time, of course dollar lost value too not that it didn't happen but bitcoin went up as well.

Did dollar suddenly gain way too much value, like doubled its value at least? Are you spending 100 dollars on something you used to buy for 200 dollars just 2 years ago? Of course not, the prices didn't drop that much, in fact in most cases earnings went up more than costs did so that's why inflation stopped, prices didn't fall and yet when you look at bitcoin price that went down, that's a different situation. This has to be important and needs to be focused on a lot more in the end.

The reason commodities outrank and outperform FIAT is the supply and demand is self defined and they have been the backing for currencies in the past due to this long term strong commodity market.   The present backing we have for paper currency is politics, they control people who pay taxes and they are spending and borrowing as much as possibly the supply of more money is way too lax and doesn't seem likely to end without a crash.     Most commodities are far more reliable though subject to industrial economic progress hence politics oversees that too to some extent and can interfere in all markets.  I still trust commodity value far more then cash however its frequently less liquid which is a problem for many as we live in a world and economy powered by debt.

Bitcoin is big as that has the potential to appreciate its price if one decides to invest in it, fiat is a liability if we allow it to be idle without using it to invest in a profitable asset like real estate or bitcoin as the individual choice may be, fiat can never be compared to bitcoin no matter how bitcoin dips in price it can never be as the same as fiat, inflation will always be friendly with fiat but Bitcoin is exceptional, I don't want to be misunderstood, I know that people will say that am over hyping bitcoin, but the truth is that, am not, the truth is that fiat has its functions so do bitcoin, bitcoin can not rule out the existence of fiat but in the other way round bitcoin current multipurpose function is topnotch. 

OP, what the person said was true. It is the value of fiat decreases which made an increase in the price of goods and services. Value is something that affects everything and money is no excluded. It might be a bit confusing but this is the simple explanation. What makes that house is expensive and cost more in the future is because it's value has increased. Also, the value of materials used in the production of the modern houses are expensive. This is because they are tagged to be the best due to the fact that it is of high quality and also a new trend.

It's obvious you can give value anything and the purchasing power will increase.

A further analysis by Robert Kiyosaki revealed that fiat currency was losing purchasing power and that Bitcoin had greater potential. The value of an asset can be increased by commodities, but digital commodities like bitcoin, whose supply is restricted, help to preserve asset value. On the other hand, the more money the central bank issues, the less value it holds. Money placed in the bank creates a liability for both the bank and the owner because there will always be fees associated with providing services. Instead of hoarding currency that may lose its purchasing power, I believe it is important to safeguard the value of any asset with commodity rather than fiat.

The value of bitcoin is increasing as the time passes like in the year of 2012 the price of bitcoin was 12k$ but as we see towards that price then present price is very much higher which means that in 2025 bitcoin will be accepted by everyone due to its quick and secure profit. Fiat does not goes higher in value so when you save amount this amount will be same until bank do some reduction according to rules and regulations.

Bitcoin decline in price but after bear market the price is again profitable. The worth of house as OP mentioned does not remains same and goes higher as that of bitcoin but bitcoin growth is faster than price of house. I think not a little thing can reduces in price because everything alter in huge price after years. Just the value of fiat reduces as inflation increases but other asset increases like that of bitcoin, gold and property etc.

It's like the price of candy 10 years ago and now. And I also feel that the actual value of candy is the same. But it is the value of a fiat that decreases. Which makes the price of candy increase almost 10 times in my country in a period of 10 years. But if we talk about houses and other types of property, I think there are other factors that cause prices to rise and fall in the long and short term. the first may be due to inflation and currency depreciation. Secondly, land and property remains the same but the number of human populations who need it continues to increase. So, in the past, when the human population was still not dense, the price of land was still cheap, but when the population became denser and more numerous, the price of land would increase rapidly. Or even conversely, property prices could fall if conflict and war occur. But since this is talking about an increase, there are actually many factors causing it. And one of them is due to deflation and inflation which have an impact on the currency itself.

I think that the value of money doesn't rise or drop, what happens is that the prices of goods and commodities increase. if for instance you save up 2000 dollars today in the bank and go back in the next five years to get back that same amount of money, you are literally at a high disadvantage because what that 2000 dollar could buy at this time will be far less that it purchasing power in the next five years because Ihe price of goods would have had an increase in price while the money you saved in the bank remained what it was.

On the part of buying bitcoin of let's say the same value and holding on to it for the next five years, because of the volatility of bitcoin, its price would have increased to a reasonable amount within the five years and even though the price of goods might have increased to whatever extent, you will never be at a disadvantage

fiat always weakens because the amount will always increase every year, that is why commodity prices can be said to rise because the amount of fiat continues to increase, while for the limited supply factor it will be inversely proportional, that is why houses, gold, bitcoin, and other commodities experience an increase every year, but there is This commodity period also experienced a decline.

This means that almost all commodities are stable in value, although some are rising and some are falling.
but your explanation and the average of all the comments I read state that it is fiat that is weakening.

thank you for all your opinion guys, really happy to hear that 

but in many cases or perhaps most countries in the world, especially poor and developing countries, salary increases and inflation are very unequal, where inflation can rise up to 50% a year (the last 2 years) while salaries may increase between 10-20%.

The value of fiat is and has been experiencing a decline. What $10 could comfortably purchase for you about 30 years ago can not be purchased today with the same amount. That is evident that the value of the fiat currency is slowly and constantly decreasing. And with steady inflation that has been ravaging the markets, coupled with more fiat currency being printed regularly, is it any wonder why it’s value keeps depreciating?

Owing a property like a house built on a nice location could bring you a better return on your investment in the long run than saving your money in the bank.
With bitcoins, there is a limited amount available while with fiat, new currency is being printed at a whim making its value overtime lessen.

Bitcoin is indeed an investment opportunity, where the increase can exceed the increase in property. However, risks must also be considered, therefore we must have prior knowledge, so that we don't make the wrong move. The value of fiat will decrease due to the rate of inflation, therefore, to save assets, choose investments in strategic areas where the increase can exceed the inflation that occurs, even double.

It is probably a fact for every country that fiat weakens every year. The price of goods does not rise but the value of fiat falls. Our country now has 50 plus banks in dollar crisis and the value of the dollar is only increasing every year to half year in our country. An increase in the value of the dollar means a decrease in the value of fiat. The value of fiat in our country has gone down a lot over the last three to four years. The value of fiat has gone down and the value of the dollar has gone up, causing the price of everything in our country, big and small, to rise. Since we have been seeing the value of the dollar increasing gradually in our country for the past few years, it seems that something worse is waiting for us in the coming years.

When you stash your money in the bank through deposits, the interest it earns is typically meager. When you factor in the inflation rate for the year, you might end up with a slim profit, or worse, none at all if inflation outpaces the bank's interest. The catch is, the interest is fixed, while the inflation rate remains unpredictably variable. So, don't view what you park in the bank as an investment; it's more like a stash you want to keep safe.

Now, about houses – yeah, they don't usually appreciate in value because, generally, they depreciate. The real value boost comes from the land they're on. So, if you're diving into the real estate game, consider the location. A great spot increases the chances of the land gaining value over time.

And as for Bitcoin, if Robert is saying he won't invest in it because he's not interested, maybe that's his way of slyly steering folks away so he can hoard it for himself. Now that he's done amassing, he'll start hyping it up to drive demand and, in turn, boost its value. Basic science. 

Yes. That is the reason why it seems our money becomes less if we deposit them in the bank. The value of it depreciates due to inflation. If you are a saver, it is okay to practice that principle but you should save to invest.

Because if you won't do something to make use of your money in investments, the banks are the ones that will make use of it and in return, they will give you very small amount of interest.

Investing in any asset you know is recommended.

thats right even deposits in bank can't truly contend against the inflation which means even if we supposedly invest our money, we still losing our share of wealth value anyway.
I think trying to find alternative investment where it can give us better return is essential in this case, considering the fact that inflation has been rising quite high these past few years due to geopolitical reasons.
investing in cryptocurrency, stocks and many more might prove to be beneifical at time like this even more so when the crisis could hit anytime.
but I think many people still don't have a clue about that, even don't have a clue that their salary should supposedly rise with the coming of inflation but many of them have unincreasing salary.
when it comes to fiat vs commodity, i'd honestly hold into commodity, just for the sake of avoiding inflation altogether. but can't refute the fact that fiat is still that convenient.

It's called inflation.

That's why in the past commodities and their prices weren't that much. And due to the inflation that happens yearly or anytime of the year, the price increases and that makes the value of fiat even lesser.

As for bitcoin, it's a deflationary cryptocurrency and we know that in the future the value of it becomes higher due to having a limited supply.

When you have that much money, don't keep them in fiat. But don't forget to at least save for some things that you need to spend it with cash and when you want to have high liquidity of your money.

The money you save in the bank will never increase or increase, and if you get additional money when you withdraw your money, it will only be in the form of interest given by the bank itself. And I don't think it would be worth the five years, whereas Bitcoin is purely because there is a very real price increase in the market and can also be witnessed by many people.

Fiat is very likely to weaken and this has been felt by many people every year, while Bitcoin clearly experiences an increase in price in each cycle so both are true. Likewise with houses, the price of which may never increase, but only the materials used to make the house increase in price, causing the house to become more expensive. And it is also accompanied by a weakening level of fiat due to several things, such as inflation, so there are two possibilities for one of the causes.

We can say that almost all commodities have a stable value, but we cannot say that the fiat value will continue to be stable because shocks through inflation could cause the fiat value to collapse. So everyone has to spend more fiat when they want to spend on the same items in different years and even in the same year it can also be different.

Robert Kiyosaki is a person who is smart enough to see and read opportunities so he will not ignore Bitcoin which has shown proof to many people for more than ten years. So we can also consider Bitcoin as a very good opportunity to earn more income in the future as said by Robert Kiyosaki where Bitcoin is a very valuable asset besides a house.

Both of these things are occurring, its a bit of a treadmill.  Nominally all workers and even skilled trades people are better off by pure numbers but in value terms people realize they have suffered greatly from the inflation occurring over decades and a family with employed householders may struggle to pay the bills despite having good jobs.   This points to a problem which may cause economic upset, where money is no longer valid in its purpose to propagate value through prices in an economy.  So its both and its a confusing effect.

BTC prices isnt the final consideration, factors behind the price are more important really and represent value growth better.  However price is the most simple to appreciate guide especially short term to gains or losses.

80's 90's - formation and completion process of global recession
90's to 2010's - artificial money strength, gold sucked because it seemed like the great USD was strong! Really, base supply of money was expanding, the effect showed in 08/09'
2010-2015 - Financial crisis subsiding and recovery, then the EU turned the printers on....
2015-2020 - Every other central bank starts turning their printer on. "Quantitative easing" was the US's form of rapid expansion.
2020-2023 - Brrrrrrrrrrrrrrrrrrrr sound is made pretty much globally.

With this series of history, comparing to Gold and Bitcoin, you'll see where prices suppressed then eventually priced in when it's difficult for the suppression to continue.

Homes should be similar but behaved a little different over time due to the mortgage scheme and the value booms/crashes caused by that scheme.

So you can cherry pick good and bad times, but it can be lined up with what central banks are doing, and when it is out of their interest for gold or bitcoin to reflect higher values against money...similarly, when that suppression is too difficult to maintain, and when the value is finally priced in.

Also fixed my post, there was a couple of things that weren't worded perfectly

That's true, since when did fiat improve, but every year it decreases, because as far as I know, fiat will continue to be printed because there is no fiat basis, but the belief is different from before, fiat had a 1:1 gold basis, now it doesn't exist, I think the purpose of creating Bitcoin is releasing us from fiat because there are only 21 million bitcoins in the world, it cannot be further different from fiat which has no limit on the amount of its supply and I think bitcoin can be said to be a discovery so that we can be separated from the fiat system, what do you think?

If we are to go by this analogy, then we can say bitcoin is not increasing in value but fiat is declining in value. As far as I know, inflation can indeed cause the prices of goods and services to rise over time and thereby making it seem like the value of fiat currencies is declining but this is not always the case especially in the housing industry that you use as example. The prices of different commodities can fluctuate quite a bit over time depending on factors like supply and demand. Houses increases in value regardless of inflation is high or not but it depends on where the house is located and how liveable the place is.

if we look at the nominal price of the house, it has gone up by 2,500% since 1980. But if we look at the real price of the house and taking inflation into account, it's only gone up by 29%. So the nominal price increase makes it seem like the house has gained a lot of value but the real price increase tells a different story. The argument here is that both fiat and commodities can go up or down in value over time depending on various factors.

Not only are house prices for living in expensive now, boarding house prices also rise if demand is high, especially if the location is strategic. We can easily find this in reputable campus complexes where students are always looking for temporary accommodation that is not far from where they study, is safe and saves time.

It's a hard mix of both , as value of fiat is depricating to a small extend as well as commodities increasing and increasing inflation is causing the price of commodities to increase but value of Fiat remains more or less same.

I will give you an example of myself. I have recently started construction of my house and I had got a quote from a building contractor 2 years ago and now the quotation which I got is 55% more than what was quoted  2 years earlier and the reason given was the price of petrol/gas has increased and thus the transportation cost of raw materials have increased. It's a chain process and we can neither beat inflation with our fiat nor cope up with it if we save in fiat hence Bitcoin or stock would be better option here.

House price is increased, don't compare between 1980s where the number of population is way smaller which make almost everyone afford to buy house after work for 2-3 years. While right now the population is really big, while land supply is limited, that's make not everyone can afford to buy house. House price will not increased if the population is stable or decreased, last few years the house price is quite stable until now.

While Bitcoin, definitely it's the most promising asset in the current generation and it's not yet reach the mass adoption.

Inflation is a global issue that's ripping off the fiat. If you save $100M in a bank for the next 5 year, your money will not be valued at $100M again because the price of commodity in the market must have increased over the years. If a bag of rice sells at $60, in the next 5 years it might be at $100 or more, so the fiat is declining in value as a result of high inflation rate. But if you use same amount to buy Bitcoin during the bear season, you hodl and sell during the bull season, inflation will have no effect on your savings because your Bitcoin would have also appreciated in value. So Bitcoin is an edge against inflation.

    -  The house may not increase in value when it lasts if it is not renovated, but the land the house is built on increases in value as time passes.

Now the question for Kiyosaki is: maybe he saw the potential of Bitcoin, and it is normal for him to invest in Bitcoin because he is a businessman and he really knows that he will make a profit from a volatile asset like Bitcoin. Maybe he will buy again now because he has seen more and more people investing in Bitcoin.

This is best way to describe it.

You can toss in gold and homes and silver etc.

They all travel on a value path when compared to one another.

Gold sucked from 1992 to 2003 it stayed in a 200-400 usd slot.

 it is now about 2000 so it did better from 2003 to 2023.

 homes sucked from 2007 to 2015 but were great from 2020 to 2023.

btc sucked from nov 2021 to nov 2023

but were great from dec 2018 to nov 2021

so you can see cherry picking the good times or the bad times shows variations

I would say the word weakening is the right term

 fiat and bitcoin both share the fundamental concept of supply and demand

money loses value mainly because of inflation
with fiat if there are more printed money than the circulating products so now products are much more expensive then fiat loses its purchasing power and that’s inflation

more demand than supply results in higher prices

bitcoin has only limited supply the more people are buying the higher the value goes up

This is correct interpretation on how inflation works. Many people think that the value of an asset such house is increasing over time but the real reason behind the increase of value is due to the fiat weakening of buying power due to excessive circulation over time since fiat has unlimited supply.

You will notice that most of the commodity including salaries is increasing too not because of appreciation of their value but rather fiat supply is already saturated that makes it value less in terms of buying power.

Historically, when the price of gold has increased, it has been because of the decreasing value or purchasing power of money. Bitcoin works similarly due to it's similar economic characteristics, though I think one of the superb things about Bitcoin as a cyber commodity, is that it gains strength from its own use case and development, which is something that is not entirely the case with gold anymore (in its early times though, it did have use case discovery but markets were no where near as a good at efficiently valuing things as they are now)

In short, the answer is both! This can be seen clearly on Bitcoin's graph

Bitcoin is an asset of value.

Bitcoin was once a time at less than $1
The price in 2012 was around $12 but increasing
Bitcoin has been increasing in price continuously in a way its increase is more than its decrease.
The low price in 2018 was $3100 or so after $19650 which was its 2017 highest price.
All-time-high price is $69000 in 2021
Its price today is $37350

Bitcoin price continue to increase and decrease but in long term it increased. It is an appreciative asset and worth buying at the right time when its price has decreased. It is not still too late to buy before 2024 halving which is not more than 5 or 6 months away.

So what is the value of anything determined by?

That's why you will encounter many people accepting the fact that 1 bitcoin = 1 bitcoin, 1 USD = 1 USD

Allow yourself time to see that from birth to death is a big journey, and we always need to learn and apply it to every field in which we participate. Sometimes the confusion between movement/fixity causes many people to confuse finding the true meaning of life. And here we can all easily access the opportunity with bitcoin as well as the risks in that exposure process, but perhaps the truth is that bitcoin will help our lives more in one place where fairness is emphasized.

Inflation is devouring local currencies at a rapid pace. The best performing currencies against the dollar may witness limited growth and the collapse of the value of the dollar against fixed assets. Gold is measured in terms of 5 to 10 years. As for Bitcoin, during the past few years the price has proven that it rises regardless of the value of the dollar. If we take gold as a measure of value. The value of Bitcoin rose sharply against gold in a curve that changed from the dollar. This leads us to conclude that Bitcoin has not reached its actual value and will continue to increase until it reaches it.

People over-exaggerate things and the simple answer here is that Bitcoin as an asset has the tendency to appreciate in value, to the point that in just a year at a time, it could have increased in x5 of the invested value. But be careful as this is not the case all the time, there are times you would invest in it but might lose /5 of the money, so the knowledge and the time of investment matters. And for fiat, if you save it in the bank, the interest would not be as much as that of Bitcoin, and we all know how inflation is battling the economy, therefore it won't be able to retain the value as it were when you bought it like say 5 years ago.

The person is saying nonsense about the house remark, an investment is an investment whether Bitcoin or property buying or anything, it's about making more money. If you invested $20k in housing and gained $500k, that means you have earned x25 of your investment, which is against inflation. Bitcoin can't do more than that, and real estate is an investment just like Bitcoin, it's your choice to invest in either of them. Don't mind them misguiding people that Bitcoin is the only hedge against inflation.

Yes, he saw an opportunity in Bitcoin. Of late, the media is propagating the halving season of Bitcoin, this is the season when Bitcoin and other cryptocurrencies appreciate significantly in price. This might be what Robert Kiyosaki realized and trying to diversify his portfolio. But he can't sell all his property to buy Bitcoin.

I would say it is happening because of both.

First, the value of bitcoin depends on the demand and supply so over time the users of bitcoin are expected to increase so if that happens as per the demand and supply rule the value will be higher.

Second, the value of fiat is losing its purchasing value whenever the government is printing more papers.

okay here I just want to find out the answer from the members here because I think about it and sometimes get curious 
People say that if we save 100k$ in the bank and take it out, say 5 years later, the value will not be equivalent to 100k$ 5 years ago.
then if I put my money 100k$ into bitcoin 5 years later the value let's just say it rises to 300k$. just for example.

My question is whether the price of bitcoin is rising or is fiat experiencing a decline?
because someone on the internet I saw once said, house prices don't rise, fiat is the one that weakens every year.

so if you buy a house for 20k$ in 1980 then sell it now for 500k$, he says that the house is not going up but the fiat is going down.
that's why we see rising prices in commodities in the long term.
Are all commodities actually stable, but fiat is weakening or are there exceptions?

I saw Robert Kiyosaki say he owns 15,000 houses and doesn't like Bitcoin a few years ago, but recently I looked back at his interview when he said he bought Bitcoin, and said it was a valuable asset?
does he see that bitcoin is an opportunity?


any suggestions would be greatly appreciated