Is bitcoin actually protecting fiat money?

bitbunnny

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The fact is that inflation in Venezuela also made money useless. If we were talking about dollars, then of course the thieves would take dollars. But since there was practically waste paper, which is called money in Venezuela, I had to take out the money by trucks in order to at least steal a bag equivalent to $ 100,000.

These are facts but people are not actually interested in facts, they like consiracy theories much more. Amd one of them is that cryptocurrency are made to protect fiat money from inflation, which to me perfectly makes no sense at all but many are obviously willing to believe that.

South Park

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Quote from: Linkkoin on July 02, 2019, 12:40:34 PM

Quote from: South Park on July 02, 2019, 11:50:04 AM

the most basic characteristics of money, which is to be a store of value, and eventually that fiat will get replaced by fiat from other countries, crypto or even precious metals.

As well, what is worth noting - the fiat currencies lost this basic feature in order to fund their military (starting point - the Great War).

Most countries wanted to be out of the gold standard anyway and they just used the war as the perfect excuse, they tried to cheat gold and then they suffered the consequences of having their economies sustain even more damage after the war since they did not had sound money, what it worries me is that for the first time in history all currencies are fiat, and the damage the economy can suffer if they all crash is immense so I keep most of my money in bitcoin and gold.

ck343

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Quote from: Linkkoin on July 01, 2019, 08:08:35 AM

Huge inflation leads to hyperinflation - and we can see that in Zimbabwe or Venezuela. Heard that there had been even a bank robbery in Venezuela, where thieves left worthless money in the bank vaults but took all the computers because they have a real physical value.

Usually I don't care about hearsays, but in this case I'm almost ready to believe it, as it would make sense (if the computers were easy to get moved and not of the cheap kind

)

Ozero

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Quote from: Jacques_Bittard on March 21, 2018, 04:43:43 AM

The biggest threat to fiat money is inflation. Inflation can be cured by injecting wealth into the economy and by that rising enough belief to keep the system afloat. This can be done for instance by occupying foreign countries and by that opening up new markets to the companies that are essential to the economy. Or this can be done by loose regulations with the derivatives markets, that will create wealth out of thin air and high hopes.

Can it be that pumping of the crypto markets is just another financial shenanigan created to keep the old system afloat?
They are creating new wealth out of nothing with cryptos, just like with derivatives. The made up wealth that is created, is actually backing the value of fiat. This would make sense why regulators seem so blind on goxdollars and tether.

No, I do not think that the cryptocurrency was created by the states to protect their paper money from inflation. States can not control the location of capital, which is invested in cryptocurrency, in their country. Because of this, the Chinese government stated that the cryptocurrency harms the country's economy because it contributes to the uncontrolled withdrawal of funds from the state.

Getmon

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I dunno. This perfectly sounds like the conspiracy theories nerds are concocting every time they do not have anything to do with their busy lives. Well, as for me, the banks and the central governments are struggling in the battle that is waged by the world of cryptocurrency. They cannot be so stupid enough to make such problems by themselves. Crypto is a serious threat to the value of fiat.

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Quote from: syamster on July 02, 2019, 04:17:29 PM

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In my opinion bitcoin and crypto coins are not here to protect fiat money, but i think is a good way to store money on bitcoin and hold it for long or until a profit is made, especially when a global economic crisis coming.

Yeah you are right it is not money protector but it is being use to increase our money, when you keep your money for long them it does not give you profit as you want from it but when you invest it in bitcoin it increases and gives your profit even more than double, so I can say bitcoin is money savvier for in forum of investment.

So in other words bitcoin is actually indeed able to protect fiat money and if it is done then there will be more value to be obtained, therefore investing in bitcoin is very profitable. But on the other hand there is still a risk that allows your money to be lost even though it is only stored in bitcoin, many hacking cases occur and basically no one protects your money in bitcoin, the only thing that can protect your money is only good security which you can apply at any time.

syamster

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In my opinion bitcoin and crypto coins are not here to protect fiat money, but i think is a good way to store money on bitcoin and hold it for long or until a profit is made, especially when a global economic crisis coming.

Yeah you are right it is not money protector but it is being use to increase our money, when you keep your money for long them it does not give you profit as you want from it but when you invest it in bitcoin it increases and gives your profit even more than double, so I can say bitcoin is money savvier for in forum of investment.

Linkkoin

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Quote from: South Park on July 02, 2019, 11:50:04 AM

the most basic characteristics of money, which is to be a store of value, and eventually that fiat will get replaced by fiat from other countries, crypto or even precious metals.

As well, what is worth noting - the fiat currencies lost this basic feature in order to fund their military (starting point - the Great War).

South Park

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Quote from: Linkkoin on July 01, 2019, 08:08:35 AM

Quote from: ck343 on July 01, 2019, 08:01:50 AM

Quote from: Irvinn on June 30, 2019, 02:17:19 PM

But if we say that the increase in paper money provokes inflation, then this process has real leverage to avoid bankruptcy by the country.

The opposite is true: the increase in paper money provokes the bankruptcy of a country, as it destroys confidence in its national currency.

Huge inflation leads to hyperinflation - and we can see that in Zimbabwe or Venezuela. Heard that there had been even a bank robbery in Venezuela, where thieves left worthless money in the bank vaults but took all the computers because they have a real physical value.

I remember that news as well and it is a perfect example of what happens when the citizens of a country let a government to do whatever they want without any kind of control, there are some economist that argue that since governments own the printing machine they cannot go broke and they make this argument so they can print as much money as they like but what they do not understand is that eventually people will stop using that fiat as it lacks one of the most basic characteristics of money, which is to be a store of value, and eventually that fiat will get replaced by fiat from other countries, crypto or even precious metals.

Gibreil

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It must be the government who actually protects the fiat currency. Bitcoin is also a currency but a digital one. It is also a medium of exchange. Printing too much money can lead to hyperinflation. Small-cap stocks can be prone to price manipulation based on trading volume. But, at sufficient volumes, cryptocurrencies with a fixed supply are practically immune to these tactics.

Linkkoin

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Quote from: ck343 on July 01, 2019, 08:01:50 AM

Quote from: Irvinn on June 30, 2019, 02:17:19 PM

But if we say that the increase in paper money provokes inflation, then this process has real leverage to avoid bankruptcy by the country.

The opposite is true: the increase in paper money provokes the bankruptcy of a country, as it destroys confidence in its national currency.

Huge inflation leads to hyperinflation - and we can see that in Zimbabwe or Venezuela. Heard that there had been even a bank robbery in Venezuela, where thieves left worthless money in the bank vaults but took all the computers because they have a real physical value.

ck343

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Quote from: Irvinn on June 30, 2019, 02:17:19 PM

But if we say that the increase in paper money provokes inflation, then this process has real leverage to avoid bankruptcy by the country.

The opposite is true: the increase in paper money provokes the bankruptcy of a country, as it destroys confidence in its national currency.

Chikito

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Quote from: RealMalatesta on June 23, 2019, 03:51:37 AM

without fiat, I don’t think any of us can be able to hold the cryptocurrency that we are holding today, and with the cryptocurrency, we will have lots of people that will trade with it in which when they need to spend it, they will still change it to fiat since we have less merchants now that are accepting cryptocurrency.

Because fiat still handle all payment. that all people still calculate them cryptocurrecny into fiat.
For the next future, maybe when fiat replace by gold or bitcoin, it will be hold them assets use system gold investment. and then alot of merchants can be accept only cyrptocurrency like fiat value.

Best Dreams

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Quote from: MidnightWolf on June 26, 2019, 02:20:53 PM

Bitcoin most likely protects the fiat funds of its owners. No one knows how much Bitcoin I have. The government cannot impose its greedy paws on these funds, and I can use Bitcoin at any time for my personal purposes, without paying taxes or income.

Agree it is really good saving which can be saved as long as we want, but those who never share about their investment will not have to face any problem, when you have so much amount of money robbers will keep eyes on you at the same time you will have to pay huge taxes for it, but crypto currency is all time safe from these kind of acts, as it is the most anonymous investment.

Irvinn

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The value of fiat money depends on the natural rate, which we will not cook, because everyone knows everything. But if we say that the increase in paper money provokes inflation, then this process has real leverage to avoid bankruptcy by the country. But what will happen if the state completely switches from Fiat to Bitcoin, which can fall in price by 90% within a year? Of course, Bitcoin has a limited amount, but its price is unstable.

ck343

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Quote from: Jacques_Bittard on March 21, 2018, 04:43:43 AM

The biggest threat to fiat money is inflation. Inflation can be cured by injecting wealth into the economy and by that rising enough belief to keep the system afloat.

You can't inject wealth into the economy.
You can inject currency into the economy.
That create inflation.
The idea that injecting currency into the economy create wealth is wrong.
On the long run, it only unsettles the currency.

Quote from: Jacques_Bittard on March 21, 2018, 04:43:43 AM

The biggest threat to fiat money is inflation. Inflation can be cured by injecting wealth into the economy and by that rising enough belief to keep the system afloat.

Inflation can be cured by stopping the creation of currency out of thin air, by keystrokes.
This is Bitcoin's superiority vs. fiat money: its quantity cannot get increased arbitrarily

BTCappu

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I think bitcoin has a long way to go before it can be that successful and it can affect the world like that, unfortunately for not there is not that many people involved, bitcoin is a global currency and there are 8 billion people in the world right now give or take which means there is going to be a lot of time and a lot of work to reach every single one of them.

However, bitcoin is on the way and we are getting stronger and stronger everyday, not just in price because we are just above 10 thousand recently but we have seen over 20 thousand before so its not even that important but there are more and more companies built around bitcoin and crypto that is making ton of profits and getting bigger which is the important part. Eventually bitcoin may protect fiat but not for a long while.

MidnightWolf

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Bitcoin most likely protects the fiat funds of its owners. No one knows how much Bitcoin I have. The government cannot impose its greedy paws on these funds, and I can use Bitcoin at any time for my personal purposes, without paying taxes or income.

Alijiindahaus

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Definitely, we must understand that the state is afraid of cryptocurrency because of its instability. In some countries, governments went mad because banks collapsed, and citizens suffered from it. What will the government do when citizens suffer from cryptocurrency? It seems to me that this should be solved in a legislative manner, in the first place to make legalization of cryptocurrency.

adzino

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Not sure if it is protecting fiat money or destroying/limiting its usage (in a good way though). But, yeah it can help develop the total economy in a broader way. And care to explain how it is actually helping to stop inflation? People selling their coins when the price is higher mean more money is being flown in the system which in turn will cause expansion of the economy at higher rate, resulting in more inflation (its the same thing as open market operation where the government starts to buy securities).

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