Topic: Paper Fiat Economies VS Digital Fiat Economies (Read 543 times)

Yes yes, inflation can be more easily absorbed if it's 100% digital.


They can cut zeroes every day, by reindexing all bank accounts to inflation. The ratio of your money to prices would be the same, and they would go up as normally. It's just that the numerical value would not.


For example:


You have 1000 $ and 1 bread costs 1$
1000% inflation happens
You have 1000 $ and 1 bread costs 10$
So they reindex the prices
You have 100$ and the bread still costs 1$

So you the price would not change, but your money would be devalued. So either the price rises, or your balance shrinks, but the ratio will still grow.

What you're saying is very interesting and true.

In fact when we say that the banks are printing money out of nothing we're talking about this right that banks have to lend money they don't have. In EU (it's what I know the best) banks need to have only 5% of their value in real currency. It means that when on your bank account there is 1000$, in reality the bank only has to store 50$. The 950 other don't exist. They DON'T EXIST.

But that doesn't prevent you from spending them, and your emloyees, your shops and your attorney accept them. Even if they don't exist...

You're right about the inflation part but there is something even worse, even stronger. It's the lack of sense. Our money is worth nothing. It works simply we still all continue to accept it, to close our eyes on a system that is doomed to fail because every time 1$ is printed, 100$ of debts are created. It has no sense.

While bitcoin do have a meaning, you don't create btc out of nowhere, it is a very precised and controlled inflation, and that's what is important.
Also, it has a decreasing inflation! Which is important too  because you can't keep a high inflation for long, our planet has limited ressources and your growth is limited by this reality!

What the advantage and you must be aware of it already, you need to limit the ability to print money of thin air like the bitcoin have implemented. The government should limit the creation of money, it's too easy to say, hey I will print money to pay the nation debt or finance infrastructure. But in the end what happen its the value diminish and people get poorer and price rise with inflation or hyperinflation like happening many in history.

Bitcoin could very well be an escape valve, if governments allowed it to. The problem is that governments would hate to lose control over monetary policy. This would especially be the case when digitization of the money supply allows them to control it more easily.

Digital Fiat currencies is the biggest scam ever, just sit in front of computer and create money with value. The advantage BTC has is that the amount to be in circulation has been predetermined and cannot be changed by miners

The strong economies in the world go to cashless that is digital fiat economies. Governments in cooperation with banks impose laws initially τo restrict and then to completely ban the circulation of paper money. I don't believe that is a matter of inflation only but they want to control the wealth of the people. Therefore governments and banks will know where anyone of us spend his money and will be very easy to freeze his funds if he is not obey what they say to do. So,  I am pretty confident next years people will do their transactions mainly with cards and mobile or web banking. Under this light my view is that bitcoin is the only way people keep some their privacy and independence.

if you mean digital fiat money  use bitcoin i think is very dificult
but you mean digital, use credit card, debitcard you are true
all people choose use credit card and debitcard because is safe in criminal if you travelling or outside is home , is compare use paper fiat money

Well printing of money is just a keystroke away, in today's technology in printing anyway. I think if the governments would use digital fiat, there should be some kind of blockchain to it. So that there would be transparency in creating new money. People can check every transaction there is while still being able to hide every identity.

For the reason that bitcoin acting as a common catalyst doesn't mean it gets used as mainstream currency if fiat in the form of paper money will be stopped. Every country plans of making its own digital fiat with possibilities of tracking the users into different transactions. Decentralization keeps bitcoin as a source of transaction in cross border needs.

The good news for bitcoin is that bitcoin acts as a nation-less catalyst which means an hedge against all national currencies at once. Once governments remove physical cash then the party it's own. They will release their digital closed source e-fiat scams, and then the time for bitcoin to shine will finally arrive at a mainstream level. By then we must have a bitcoin that is as strong, decentralized and private as possible.

One of my biggest pet peeves is financial and economics commentators talking about "printing money" by the Fed. With only 1% of domestic US money being in the form of paper and 99% of it being in digital form and only existing on computers, they (the FED) can create mega-train loads worth of digital "money" with a key stroke. They can cause ever-increasing and rapid boom-bust cycles quicker than ever before. By their nature, each cycle comes quicker than previous ones.

But that is just the US situation. There are over a hundred sovereign nations with their own currencies and each having different ratios of paper to digital money in circulation. The nation of Zimbabwe is probably the best demonstration of the inflation that can be wreaked with paper fiat. They had to remove twelve zeroes from their currency. Obviously, there is no need to do this with digital money.

But there is, I believe, a global pressure building because of the difference in the speed at which digital economies can infuse inflation compared to paper economies. The huge and rapid inflation caused by digital currencies cannot be absorbed by paper economies and, so, they are at severe disadvantages when attacked by outside digital fiat monies.

I picture each sovereign nation as its own tectonic plate. As a digital economy inflates it builds pressures along the places where it intersects with other plates. The pressure caused on one side of that plate get's transmitted against the other side and that plate pushes against yet others and so on. Just like the plates of the Earth build up pressure until there is a break which results in an earthquake, I've come to look at the global economy in a similar way but looking at each economic plate based on the percentage of its paper fiat vs. the percentage of its digital fiat. That ratio determines the plates ability to react to inflation pressures of connected economies.

Just a theory, thought I'd throw it up here.

And Bitcoin would enter in as something of somewhat of an escape valve that can alleviate pressures in different parts of the world (maybe even preventing an earthquake type reaction on a plate).