Topic: How is it possible for fiat to "disappear"? (Read 1454 times)

The zimbabwe dollar caused heavy inflation there, so printing money doesn't mean that it is an escape, it is a trap. It traps you and the more you struggle to get out of it, the more it sucks you in. And as far people's trust in fiat money goes, never thought government would benefit by having dumb citizens, atleast the people in btc community know about modern money creation.

From macro level, fiat money disappears when the trust to that currency is totally broken, for example Zimbabwe dollar

It is very easy to break that trust while difficult to maintain it: If suddenly it requires 10X more dollar to eat a hamburg, then everything's price will explode and government suddenly lose the ability to purchase or drive any project with the money they have (even banks raise the interest to 20%), then their only choice is to print more money to handle the situation, which make the situation even worse. So once that trust is broken, there is almost no way to prevent the collapse

But so far, people's trust to fiat money is still intact, this is because they don't have any knowledge about modern money creation

If indeed the hacker hacked their back account, they should have made in public about those details with all the IP Addresses and security loop holes, customers has the right to know how they lost their money and they need some tangible proof, and according to me these proofs are has been vanished purposely by Bank executives to fool the innocent customers.

Speculation aside, more bankruptcy claims are being made- which gives the impression at least that the initial deadline did not garner as many claims as expected, which in turn means there must be something left sitting with the bankruptcy official in Japan in charge of the investigation/liquidation.

I don't think fiat can disappear, atleast for more than 20 years, it will survive. People who say dollar and all other currencies will be devalued are wrong. If the dollar got devalued in real terms at 10% a year, as we have enjoyed in gold terms on average for 42 straight years, a 120% debt to GDP would hit 60% in around 6 years. That's enough to tell there is not a doom happening now.

If you're around 20, your generation will experience the replacement of paper money to digital currency, that is for sure. Right now it might be hard for people to trust virtual currency, but they accepted a lot of digital businesses in these coming years, bitcoin will be adopted too. Its alright for it to take time, we are talking major revolution here, doesn't happen in a week. And sorry but exchanging and trading bitcoins is so easy already, I think it will be so much easier in the future. Don't trip bout that.

Well , the very first thing i would like to put it up here is that fiat cannot just disappear into thin air. It is impossible for such thing to happen.  The authorities must be well informed of the fact. And people need to be fully aware of where they put their money into. They should not just sit back and rely with their eyes close , they need to keep regular updates.

How will it be difficult to do so in the future, its easy as hell right now? it will be even easier.
In the future (not so distant) there will be physical cash, so the idea of paying with smartphones will be widely accepted. Once that idea is ingrained within people's minds, the idea of using Bitcoin instead of some goverment issued e-currency scam will be a natural one.

it is not possible for fiat money to disappear. the world cannot funtion only using virtual currency. and most of the people do not trust on virtual currency. and it will also be difficult to exchange bitcoins for day to day purposes. it can be helpful in many ways but due to certain boundation virtual currency cannot be only currency used

Insurance means their must be some central authority to control, the purpose of bitcoin digital currency make everyone to feel free from any sort of curbs and restrictions, so according to me the concept of Insurance company wouldn't be fit for Bitcoin.

Unfortunately there is no insurance company to insure balance for a bitcoin "bank".

as long as people don't stop with being an idiot by not caring about what exactly is happening with their money, this will continue to exist for another few hundred years.

actually those money was never there, they just print that number on their computer, and this will reflect in your balance, meanwhile your real money are lended to someone else, and they earn fractional of money on this

if you need the money they will give you the deposit from someone else and so on, it is all planned perfectly to seem legitimate

Because MTGOX have multiple accounts in multiple currency

2.8 billion yen is like 28 million dollar, that is a small amount if you are doing 1 million dollar transaction per day, which MTGOX might have done easily. So after many days of million dollar deposits and withdraws, finally their Yen bank account shrunk by 2.8 billion yen

An exchange company typically have many bank accounts in different currencies. From their point of view, it is very normal that one account shrink and another account expand, just because they reduced the holding in one currency and increase the holding in another currency at the same time

But if no one understand what is really happened in the company, then lots of strange things will happen. For example, the reduce of 2.8 billion yen in company's JPY account should result in an increase in their USD or bitcoin holdings of similar value, but those bitcoins are gone, and all of these 2.8 billion yen already paid to other customers are legitimate

MTGOX's own book might indicate that Japanese customer are still holding 2.8 billion yen at the exchange (should be in MTGOX's japanese bank account), but these are database entries, whether they really have JPY is not relevant. When customer ask for Yen withdraw, MTGOX could just go to his USD account, sell some USD and get Yen to pay customer

Most fiat is nothing more than an entry in someone's ledger. Usually, that ledger is in someone's database, and often it is in only one database. It's not like Bitcoin where everyone has a copy of the ledger. If your bank loses their database and there is no backup, your money is gone. It's as if it never existed. It's much, much easier for fiat to disappear than it is for Bitcoin.

Lol, the word 'misplace' here somehow reminds me of the slap scene from the movie Fun With Dick and Jane where Frank explains to Dick how Globodyne went bankrupt  - https://www.youtube.com/watch?v=Qw7eY66s6X4
Seriously though, I don't think we'll ever know exactly what happened there.

No, it's not possible for fiat to disappear afaik. Unless it never existed in the first place.

Rewind the scenario that happened;
- Mt.Gox inflated the price using non'existant fiat funds aka - Willy bot.
- people who sold bitcoins were then trying to cash fiat out of the exchange
- the exchange couldn't pay everyone their fiat balance, since there was not enough money, they were insolvent

*How they additionally managed to loose BTC as well is beyond me, i guess they are advanced in stupidity.

There was previously a case in btc-e.com , where attacker managed to fake deposits credited via Liberty reserve payment processor, then proceeded to buy btc & ltc and withdraw them,
luckily, their actions were noticed early on, and the exchange was able to roll back every trade after the attack, and pay up the damage done.

Whether or not Mt.Gox case had a similar attack, or was it indeed inside job (many will argue that Karpeles himself orchestrated this) i really can only guess, like everyone else.



I have striked out tiny parts of your reply that don't answer the quoted question. You're welcome.

cheers

Maybe the fiat did not disappear, they were never there. The bots bought bitcoin without depositing fiat.
http://www.coindesk.com/bot-named-willy-did-mt-goxs-automated-trading-pump-bitcoin-price/

It is not the money that can be put in the pocket and I strongly think there are somethings that are hidden from views of others.

So its a year old news and people realized that now ( or it has been discussed before?) . Everything with the company is pretty shady to begin with. Regarding the FIAT that was left untraceable, there isnt anything sort like that because it is indeed an inside job meant to steal and keep it hidden for some reason

Banking system allows the bank to locate any FIAT transaction made from a bank account to another bank account which means that all of this transaction should be listed in a database otherwise the bank is the "stealer" themselves. It is pretty much easy to locate a 2.8 billion yen even though if you split them up to hundreds bank accounts in a smaller increments. It is definitely funny if no one knows the existence of this FIAT

P.S : if you left the BTC part as well as the company and just focusing on how FIAT dissapear then this suited in this section