Topic: What makes a Fiat worthless? - page 3. (Read 2285 times)

The paper is inefficient and costly and wasteful to use, thats a situation when its obvious any alternative is going to make society richer to take that option.   Economies naturally favour efficency in everything and governments often block open competition which makes society poorer even if some people may benefit short term it loses the country overall longer term.   This logic isnt respected anywhere universally, every country thinks a smart idea to force prices higher to help some workers.   In the case of bad money, the fake value helps government so they are biased to themselves but it costs everyone else using it in lost and failed trading value.

No I think it is not because of politics but there are some other issues in crypto people are in search of some good way to make payments that could save their time and also give them chance to get fraudless payment so crypto has provided this to them now payments can be done even if you are at home or at work and it made our life test good because of reliable use of crypto.

I have never been to Venezuela, but the other day, I saw a documentary film about life there. It was a real shock: people carry money on trays! They do not even count it when they buy something in stores: they use scales! How can it be - a kilo of paper money for a kilo of apples? Naturally, it is almost worthless there now, and people start turning to cryptocurrency simply to survive.

A lot of things can affect a country to get inflation. And what is the main problem is when their government do a mistake from it and think if a lot of money created, it can help people to get money form it. And then hyper inflation come, which make that money itself not have value.

Excessive printing is a serious problem in a third world countries. Even more dumber is I've ever heard someone saying that if the government need money just print it I mean they must be lacking the basic knowledge of how fiat works. Also, if a country is politically unstable their money will seem to be affected aswell because investors are withdrawing their invested fund and also losing their trust against the country's money therefore making it worthless in the eyes of international market.

 It's always crazy to think that some country could failed that hard making their money as good as dust lying around in the ground.

Fiat by itself could work as long as governments were fiscally responsible and only printed a limited amount of fiat each year and had inflation under control, but that is not what we see, governments spend more money than what they get in taxes, get in debt and print more money than what the economy can tolerate, this creates inflation and then they keep printing money to try to solve those problems with the obvious consequences of fiat losing value and losing the confidence of the people in the currency.

The relationship between fiat currency and a country cannot be separated because the legitimacy of the government that makes fiat currency can be used as a legal payment tool in a country or at the international level. Many factors cause the value of fiat currency to become worthless. The main reason is because the value contained in money is not backed up by gold. paper money material does not represent the value of money, in contrast to gold coins whose intrinsic value is the same as the value of currency.

The simple analogy is as follows, gold provides a guaranteed value to the currency, no one doubts gold as a precious precious metal. With the existence of a gold guarantee when issuing / printing money, the value will be more stable because there is trust. Human nature for material problems is what can be felt by the five senses.

Fiat money becomes worthless when the market or society loses confidence in a country. The stronger the value of its currency, the country must also be strong. When the government of a country prints money to overcome economic problems, other countries will doubt the capabilities of the government and that country will ultimately lead to the loss of confidence in the government which will inevitably make the value of the currency low.

The only way that money can be deemed worthless if its value reaches hyperinflation- wherein it losses its value on the market but its FACE VALUE is tremendously high.
Like what you have mentioned, Zimbabwe has a fiat note called 100-trillion-dollars and it is only worth $40 USD. Excessive printing of money can cause hyperinflation where the supply is high but the demand for goods is significantly low.

Corruption is what makes fiat (wealth) worthless since the first era until now, added up inflations and hyperinflations that could make fiat's value disappear is very possible to happen anytime soon, people might say "Hello" to cryptocurrency because to be honest, fiat is weak compre to cryptocurrencies that have so many limitations and it have more potential to help people or even the whole country than fiat.

There could be many reasons which will lead to the devaluation of currency. High balance of trade, poor management of currency circulation in the system, high rate of credit defaults, corruption etc etc. On the whole, it usually happens because of the poor management by the government. Though natural disasters can be one of the reason, but that isn't much prominent. That's why world needs a decentralized currency which gives owner the power of managing his funds, not any inefficient central power.

Fiat become worthless in the case when inflation rise to highest level that you can't exchange it for any item  or the government declare the currency invalid to be used in economic system and you can't use it in the country.Because fiat is the main financial source of country and it can be worthless only due to political causes of country.

I could say that Fiat is really worthless in cases like Zimbabwe that their national currency became so useless that most of their savings was destroyed and left them bartering for daily needs due to inflation, that is why governments should prevent this kind of incident because it is not good for the economy and individuals.

As for me, the economic situation affects the value of every currency. It depends on the approach of the national situation. However, cryptocurrency as a second currency has a huge impact on every economic situation but it couldn't affect the value of fiat negatively. It could actually support it as a mode of payment and investment.

Volatility is not which prevents people from using bitcoin as a medium of exchange. It is rather suggested to not use bitcoin in purchases because it holds a bright future and one can become rich by holding it for long. This is true because we have people with us who became millionaire with bitcoin holding.  If it was not volatile, it would have been impossible to get humongous rewards from it.

when talking about fiat currency and crypto currency with almost the same function but different systems and see the development of crypto currencies and their functions more quickly and practically by following the changing times and technology the fiat currency system is worthless but fiat currencies are run by governments and certainly has strength in its development

For me, it is quite not that appealing to hear, but cryptocurrency will be a possible reason in the future for fiats to be worthless. The fact that we are converting our fiats to buy crypto, is a way for us to embrace digital currency and to leave fiats, but in this case, fiat could be worthy again if a nation could still have a cryptocurrency that will still unify all, including economy, government, financial institutions and etc.

Corruption is for me will be the major cause why a certain country will have a worthless fiat, just like what happened to Venezuela, wherein they have financial crisis, because the corruption is very wide in their country. With this, they suffered from shortage of food because 70% of their foods was imported, so their economy really fluctuates.

yes you are right some of the things you mentioned are factors that influence the fall of fiat currencies. and in my opinion political instability and a country's weak economy are the main factors causing the value of fiat currencies to fall. plus GDP, inflation and trade balance also affect fiat money. Fiat money is very susceptible to inflation, especially the currencies of poor countries.

Excellent question because the most common reason for FIAT to exist is by force and requirement of an ongoing ruling government of that country.    Its quite possible for everyone to choose an alternative to that currency if they are able, some currencies are more reliable then others so thats natural some will prefer that quality and just what they already know.
   The foundation of the Dollar was based around what existed prior to it which is the Spanish empire and its use of gold.   So USA did start off with gold but has become now a political currency relying on the status quo and its heavily favourable as the most recognisable long term currency though others have been more favoured in the last hundred years.

FIAT becomes worthless when its not used by anyone for any purpose.   The most obvious case would be where the value of the paper exceeds the stated value, people have used currency as wall paper and fuel for fires before because it was most valuable in that way after losing any previous value.    The main answer is about a competitive market which always exists, people will trade gold, barter food and others items and take the inefficiency in those trades if paper FIAT is more awkward and unreliable to store over night.


FIAT can become worthless while a government continues.   No person or collective can defy science and alter the dynamics which can cause the failure of a currency, they can apply force but in the end the bullets used may be more expensive then all the use left in the money created.   The currency must serve a task, provide utility or it becomes a burden not a benefit or with any value.

In every news usually because of inflation. When they mint a lot of fiat, because of a lot of aspects. Their money will be worthless, or maybe although they have a lot of money, it's value is not like what it's value before. And then if it's keep happen, maybe like what already we saw in news from Venezuela which get hyper inflation.