Posted on 12/25/2023 7:34:17 AM PST by Theoria
Nope. Nobody cares about that. Money works because people believe in it. Government “backing” is as completely meaningless as gold backing. Crypto IS being used to debts public and private RIGHT NOW.
I don’t have to think it, it HAS HAPPENED. Read the link I gave you. Money gains ALL its power from the belief of the people trading it. Things made up by people not the government get used to purchase things all the time. Ever heard of stock based purchases.
I’m not advocating anything. I’m explaining to you how money works. How money has always worked. How money will always work. Once you understand that. The rest is painfully obvious.
As the economy in China continues to fail, the wealthy must move their money from the failed banking system to safety. They must move them selves as well.
Both money and people are fleeing the destruction of capitalist businesses being destroyed by President Xi.
One wonders is one who has fled can then move his fortune from China without actually still being there
The dollar has the benefit of being legal tender and has the backing of the "full faith and credit" of the United States of America. In contrast, bitcoin and other crypto ledger currencies are backed by what? Computers and software code? They are accepted only by those who are willing to accept them.
In time, the most widely accepted crypto currencies will be "stablecoins" that are fully backed by and convertible dollars or gold or other reliable official currencies and are accepted and integrated into the normal banking system.
Good post.
I spent most of my career underwriting commercial mortgages—and in my view bitcoin is useless as an “asset”.
It was my job to figure out who was lying and/or trying to “fake it until you make it”.
“Bitcoin” as currently implemented has scam written all over it. Those who push it are either scammers or clueless.
Nope you don’t know how money work. You know about the laws we currently have around money. But that’s not how money works.
You need to look at the long history of money. What has been money over the millennia. Understand what all those things have in common. Understand WHY they were money.
When you do you will know that the “full faith and credit” is just another illusion piled onto it to help give people belief.
As I’ve said to you multiple times the last few days: BELIEF. That’s what give ALL money power. The only thing government backed crypto will gain is people like you. That lie will convince people who don’t understand money crypto is useful. Meanwhile, crypto is already useful.
Over the years, I developed a lot of respect for human lie detectors I came to know: cops, judges, trial lawyers, auditors, bank examiners, forensic accountants -- and commercial mortgage underwriters.
You are, of course, correct in the abstract that money in the broadest sense can take any form. But money in modern life and commerce is characteristically fiat money backed by government and by legal tender laws. In addition, gold has such intrinsic value that it is often made into both official coinage and bullion coins. Yet even gold fluctuates in value.
In all sincerity, for your sake, please look carefully before you spend money on crypto -- or any other form of investment, for that matter. You may think that I am wrong about crypto, but can you be absolutely, one hundred per cent certain that I am wrong?
I’m neither scorning nor quivering. I’m pointing out that backing is meaningless.
All money is fiat money. And gold has no intrinsic value. That’s actually part of what made it good money for so long. It was useless, so people wouldn’t use the money to do other stuff. Something people eat, or build houses or tools with makes bad money. It has to be useless, have no intrinsic value, for people to do nothing with it but spend it.
I’ve known absolutely that anybody that thinks backing money with anything has meaning is wrong for decades. Long before anybody even started thinking about crypto. History proves it. Money has only ever been backed by one thing: people’s willingness to take it.
Again, with gold being valuable and dollars having the benefit of legal tender, why would you consider crypto with such backing to be inferior to crypto without it?
See you just showed it isn’t intrinsically valuable. Jewelry and ornaments aren’t where valuable things land. Valuable things help you have tools, food, and shelter. Even the Greeks got this, the whole point of the fable of Midas is that his love of gold caused him to lose the things that are actually valuable. Put yourself in any Robinson Crusoe/ post apocalypse/ there isn’t enough stuff to trade or society to trade with situation. You encounter piles of tools, food, building supplies and gold but you don’t have the ability to grab them all, which pile is the least important? The gold pile. Gold is useless until you can have trade. Thus gold has no innate value. It’s just that we spent so long liking how shiny it is, and have used it in trade for so long, that most people have bought the lie. They don’t even question it. But they should. Because gold only has the value we give it, nothing innate about it.
Because gold isn’t valuable. Legal tender is completely a made up concept. And cryptos primary fans want their money to have as little to do with the government as possible. From a pure marketing perspective government backed crypto has all the problems that’s why they’re trying to get AWAY from dollars. The whole backed crypto concept is basically saying “oh you want to get away from government backed government tracked money? How about if we call it something else?” Outside of that crowd it will be fine, just another crypto. But that crowd are the movers and shakers of crypto, they’re the early adopters, they’re the ones pushing which of the hundreds of cryptos out there matter. And they’re not gonna touch government crypto with their worst enemy’s cellphone.
Calling legal tender "a completely made up concept" is also an extreme opinion. Try paying your taxes or mortgage or car loan in anything except legal tender and you will soon find otherwise.
I said gold isn’t INTRINSICALLY valuable. That’s a very important part of the phrase when people talk about gold as money. They, and you, like to say it is INTRINSICALLY valuable. But it isn’t. We have DECIDED it has value, but that value is NOT a part of its essential nature (in·trin·sic
/inˈtrinzik/ adjective belonging naturally; essential). If human being had never decided that the soft metal that shines up nice but was never actually useful until alloying was invented, and even then didn’t get really useful until printed circuits were invented was pretty it wouldn’t be valuable. It has the value we gave it. Nothing INTRINSIC about it.
Legal tender IS a made up concept. Nothing extreme about that. There’s lots of ways to pay stuff without legal tender. Ever heard of stock buyouts? Or maybe go hang out with the sovereign citizen crowd? Ever used credit card miles? And really, let’s keep in mind, the vast majority of the purchases we make now are not with printed legal tender. It’s 1s and 0s we’ve decided to PRETEND represent legal tender. I pay my mortgage with a monthly EFT. Same way I get paid, we twice a month on that. Last time I owed taxes EFT, when they owe me, EFT. I’m going to a concert tonight, ticket bought with a debit card. I had lunch delivered, GoolePay to hit the debit card. I would say about the only people who use actual legal tender anymore are drug dealers, but even they prefer electronic money now.
Not only is legal tender completely made up, it’s also dying. There’s so many better moneys out there now.
Nope. I’m pointing out reality. And you’re afraid to see it. Gold is NOT intrinsically valuable, dollar are NOT valuable, no money has residual value, so called crypto stable coins are just layering one fiction on another, just like gold backed dollars. And your beliefs are 100% wrong.
The market has currently ser the intrinsic value of gold at ~`$2,080 per ounce.
That’s not intrinsic value. That value is not an essential part of its nature. That’s how much we’re will to spend for it.
No, it is intrinsic value as a medium of exchange and of metal material having many uses.
To deny that is to say that iron or titanium have no intrinsic value
No. That’s market value. Intrinsic value isn’t set in a market, it’s... well intrinsic to the item (belonging naturally; essential, the dictionary is your friend, words have meaning) Plenty of things have market value and no intrinsic value. Fractional ownership of companies is a fine example.
Iron has intrinsic value, it’s one of the most important things for making tools and progressing human technology. Titanium didn’t until we learned to work with it. Although even then, outside of its military applications it not that awesome. Gold was a waste metal that was too soft to do anything cool with until we figured out alloys, and got a little more with printed circuit boards. For most of human history it had no intrinsic value, and even now doesn’t have very much. Just because we’re obsessed with something and willing to fork over a lot of cash for it does not mean it its value belongs naturally or is essential.
Obviously, our discussion is at an impasse. I remain baffled though as to how you can think that the whisper of electrons that is crypto has more intrinsic value than a stack of gold coins.
If you attended crypto conventions you would understand—after partying all night long and passing out into an alcohol and drug induced coma....
Lol.
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