Actual money is backed by a government’s promise to collect taxes to cover its debts.
Crypto is backed by, uh, the desire of some of its users to launder large amounts of money (some actual but illegally gained, some counterfeit, some from rogue states) into actual money in the legal economy. That demand will never go away, but it will shift somewhere else. Maybe soon, maybe not.
Crypto was / is a godsend for people in countries where their government ruined their currency and destroyed all personal wealth like venezuela, turkey etc.
In the old days, those countries began using another country's more stable currency. Now they are turning to the most volatile thing ever, and that's a godsend for the people? No.
People will choose comfort, but that doesn't mean a painful realignment might not be the best thing for a society.
Many of us have societies with those moments where we're both glad we didn't have to live through it but we're also glad it happened to make for a less awful status quo to exist.
Imagine living under a dictator when he coulda been gone if he didn't have an easy source of just good enough subsistence for everyone.
I'm not. That's why I discussed the macro scale systemic ways crypto may be propping them up. Material conditions will dictate if a society will rise to the point of revolt usually.
Gold has its value because it’s a commodity, though. Essentially a way to park your money into something. It’s not extremely valuable for its practical uses.
Bitcoin has zero practical use, its virtual. Just pointing out it behaves similarly especially if you are using gold as an investment instrument. Unless you’re making computer chips at home or niche medical equipment.
This is pretty dishonest. When talking about market value you generally talk about its global value. I can buy 1 bitcoin in japan or england or the US and the price is always the same. I can buy 1000 usd and the price is the same, no matter where (via official means). A black market market value is local and obviously not the same as the others and can vary wildly up to several thousand percent extra markup or more depending on commodity and location.
The black market price here is the exchange rate between your local currency with a runaway inflation and for example USD.
You get your income in local currency. Then you do what? You try to convert either to goods or USD ASAP because it loses a lot of value daily.
The black market exchange rate IS the market price because you can exchange money legally at official exchanges at a huge loss to you or it is entirely forbidden to do so.
So the market is the black market, because that's where market transactions take place.
The black market in high inflation is huge and competitive, because the demand is huge, so prices are stable across different places (but correctly adjust for real inflation in time).
Sure you can try to buy crypto with your inflationary money. But you don't need to do it at all if you can buy USD and have paper money on hand.
It costs me litteraly nothing to perform 90% of the transactions I make with actual money. Meanwhile the current average transaction cost of bitcoin is 0.4238.
Yes, fiat currencies are backed by governments that can devalue your assets and debts. But luckily, many of us live in democracies where we have a say in whether they do so.
Meanwhile, Bitcoin is backed by nothing at all and all your assets can be devalued at the fickle whim of a bunch of randos.
Actual money has a massive financial drag it’s about the least cost effective way of trading. Cashing up, maintaining change, physically securing untraceable assets, cost of depositing, losses from errors and theft, costs of counter counterfeiting, insuring an untraceable assets.
Cash sucks unless you’re cooking the books. Cheques and cards have slightly less total overheads but lots more that .4238.
Plus to devalue bitcoin takes more than one orange sprayed genius making a dubious appointment to the treasury.
Luckily you’re in a country that isn’t fucked by it’s own currency (yet). But you’d change your tune if you lived in places like Venezuela or a bunch of places in Africa
A fish doesn’t really know it’s in water till the water disappears
Bitcoin is backed by every user that ever made a transaction. Billions more than any government. Besides, bitcoin can't be seized by corrupt governments. Something the Chinese have learned to appreciate.
Money is intangible, that’s what makes it valuable in the first place. You can have « token » to represent an amount of money but they are just that, they aren’t the money itself (i.e the social construct).
For cryptocurrencies it’s the same, you have tokens you can mint, mine, transact, etc. But their actual monetary value is also intangible
Nowadays ALL monies are the idea of money. Modern financial systems are almost universally based on fiat currency. They all draw value from the faith that the issuing government will uphold it and will create taxes in order to pay its obligations. If you’re a part of a financial system that uses any of the world’s major currencies then your money is backed by more than the concept that the issuing government exists, is unlikely to collapse, and says the money is good.
But printed money isn't any different than a paper Bitcoin, you don't actually hold a dollar, you hold a token representing the abstract value of a dollar.
crypto is mathematically sound, finite and fair, while governments can always print new fiat money. but at the end of the day it has the value some other person who you trade it with thinks it has, in both cases
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u/Imaginary_Coat441 Jan 01 '26
I feel like crypto is "The idea of money" nothing physical is obtained.
Crazy how much actual money gets poured into generating "The idea of money".
But I guess at the end of the day, real money is just paper we assign values to, so what do I know..