that’s only true if you accept stablecoin as currency. Which many don’t because of this and than they can reverse it by forking the code. Alt headline: hackers steal code thought to be valuable by some.
thought to be valuable by some.
That is every currency
as long as i can sell it to some moron for money i can actually use
That’s a really reductionist take, I can pay taxes with the currency of my country of residence.
OK, but I can’t pay taxes with Euros in the US, does that mean Euros aren’t a valid currency?
Your country could accept cryptocurrency for your taxes, if just chooses not to. That has no bearing on whether it has value as a currency.
Your country could accept cryptocurrency for your taxes, if just chooses not to.
Not really. It would have to sell the crypto for its sovereign currency. The whole point of issuing+taxing currency is to get citizens to do favors for the government.
If you’re paying citizens for favors in USD, but accepting BTC to clear out “favors owed”, nobody has any incentive to chase USD, because any amount of BTC usage is going to dilute the value of their USD.
Unless you keep the amount of BTC you accept tied to its current market value in USD. But that’s not really “accepting” crypto, that’s just selling it on their behalf as a convenience.
The government could keep some amount of other currencies around for the purposes of things like tax refunds, and not liquidate all other currencies upon receipt. If you choose to denominate your return in Euros, you’d get your refund in Euros, and the tax authority would buy any additional Euros they need in order to process your return.
There’s no real requirement that everything be denominated in USD (or whatever your local currency is), that’s just a preference by your tax authority.
But my real point here is that whether your local tax authority accepts a given currency for payment has little to do with whether that other currency is “real.” USD are just as “real” as cryptocurrencies, they just differ in who accepts them and how money supply is managed.
It’s not just a preference. Taxation is what gives the currency value.
The government can create and destroy dollars. It spends dollars into existence, and it taxes them into nothingness.
But if it receives BTC, it can’t destroy the BTC. Same with any foreign currency.
It needs to be able to destroy the tax money after you pay it.
It needs to be able to destroy the tax money after you pay it.
That’s just an accounting trick, they can “destroy” whatever the current USD value would be. Whether they hold or immediately exchange the BTC is largely irrelevant.
And governments don’t necessarily need to issue the currency they use. For example, Ecuador uses the USD as their national currency. There’s nothing stopping any country from standardizing on multiple currencies either.
The best way I’ve found to explain crypto currency as someone who dabbled in mining and trading.
It’s like any other foreign currency. I don’t know what backs the British pound, I don’t know what people do with it, but I do know at any given day the pound vs the dollar fluctuates in price. Some people somewhere prefer the pound.
All that is true about most crypto currencies
The analogy isn’t strictly incorrect, it’s just misleading. The price of usd to btc has seen more fluctuation in the last 24 hours than gbp to usd has seen in the past year. Crypto isn’t a currency, it’s a speculative asset.
Money has no price, money as an ancient pre-historic technology is a way to build trust between people that don’t interact often together and thus need a language to express the labour of their work or the value of their properties. Bitcoin is not the money of the internet but rather the internet of money as stated by Andreas Antonopoulos.
If you want to learn more about money this article has nothing to do with crypto and explain fairly well how we don’t know how money came to existance (as it’s older than writing). It’s not the answer of what is money but a great explanation of how it was yeaaaaaars ago. https://medium.com/teatime-history/how-ancient-long-distance-trade-may-hold-the-secret-to-the-origin-of-money-22094482a475
If you don’t have Medium account consider using Freedium ;)
The fact that you don’t consider Zimbabwes dollarinos an actual currency doesn’t take away anything from the argument you replied to.
Honestly not sure what point you’re making. ZWD has been completely stable against USD for a long time. BTC fluctuated by 7 entire goddamn percent. The currency of Zimbabwe is more of a currency than literally any crypto.
A currency isn’t defined by being stable. Argentina, Venezuela, and Turkey have had crazy inflation recently, and what’s inflation if not high volatility in valuation? Argentina, for example, had 200% inflation or something last year, that’s nuts! It doesn’t make it any less of a currency.
I consider something a currency if it is primarily used as a medium of exchange. That is absolutely true for a number of cryptocurrencies. Stability of valuation vs some benchmark is irrelevant.
Is that what constitutes currency for you, if a country accepts paying taxes in that form?
Y… yeah? Pretty much, yeah.
Money, therefore, arose out of liability: farmers valued coins because they had a nondiscretionary liability that could only be settled with those coins (their taxes). People who weren’t farmers would also accept coins, because they knew that the farmers needed them, and since they needed to trade with farmers, anything the farmers would accept was therefore valuable to all.
Over and over in history, we see examples of money emerging through the need to settle a nondiscretionary liability.
The idea that money comes from liabilities was popularized by Warren Mosler, the progenitor of Modern Monetary Theory. In Mosler’s lectures, he illustrates the point by asking, “Who will stay after the lecture to stack chairs and mop the floor, in exchange for one of my business-cards?” When no one raises their hand, he adds, “What if I told you that there was an armed guard at the door and if you don’t give him a business-card, he won’t let you leave?” Of course, every hand shoots up.
Mosler’s door-tax turns his cards into money.
https://pluralistic.net/2022/09/16/nondiscretionary-liabilities/
I don’t think that’s necessarily what that is saying, interesting quote though.
I would argue that money can be basically anything we decide to agree upon as a form of intermediary for goods or services (as opposed to a bartering type of system).
Additionally, governments rise and fall all the time, sometimes they handle monetary/fiscal responsibility well, and sometimes they don’t.
I’m not an anarchist by any means so I’m not advocating for lack of government (in fact I’d very likely be considered a communist to most).
If tomorrow the USA IRS said it would accept tax payments via Bitcoin/Eth/Whatever, would that automatically mean that it is in fact money now in your opinion?
I think the key thing here is the myth that money was invented to optimize an unwieldy barter economy. Money isn’t actually a tool for ad hoc person-to-person trade, but for trade among members of a community.
And in that setting, it’s less about the mechanics of measuring the value of individual items and more about balancing the number of favors owed to/from each member of the community. The magnitude of those favors definitely scale according to the material value of the items flowing through the favors – but it’s a secondary, not primary, concern.
It’s true that money can be anything we decide to agree upon, but it’s not as a stand-in for valuable goods. It’s as a stand-in for “credit against my debt of favors owed”.
I’ll have to take some time to read and digest this, but you didn’t answer my direct question :p
You can pay taxes with slips of paper that are exactly as valuable as the person willing to accept them believes they are. This is true of all currencies.
Real currency represents debt. You’re paid money that represents what is owed to you for work you’ve done. Or you’re owed something because you handed over a product so you’re handed money that represents what you’re owed.
Real money is created when money is borrowed. Because real money represents something owed. Interest rates are set to control how how much money is borrowed which impacts the money supply, which impacts it’s value.
Crypto “currency” would be terrible to use for loans, as that would be effectively shorting it which as something that’s value is determined purely by speculation could result in you owing way more in real value than you originally borrowed. Buying crypto is a gambling the money you put into it. Taking out a loan denominated in crypto currency is gambling an infinite level of liability.
Since it absolutely fails at the primary function of currency (representing debt) crypto “currency” is definitively not a currency. It’s only believed to be currency by people who don’t understand what currency is.
The only real difference between cryptocurrency and fiat currency is who manages the money supply. In both systems, the value of the currency is determined by the users of the currency. A cryptocurrency merely takes the control of the money supply away from a central authority and relies on distributed algorithms and consensus to manage the money supply.
Whether something is volatile has no bearing on whether it’s a currency. A currency is merely something primarily used as a medium of exchange. Tickets at an arcade could be considered a currency because they only have value in the context of what they can be exchanged for. It has nothing to do with debt and everything to do with exchanging symbols of value.
Yeah no shit they’re controlled by different groups of people.
Real currency is managed by a central bank which has as it’s goal to keep it stable with slight inflation over time. Because that’s what makes it good for doing loans with.
Cryptocurrency is controlled by speculators looking to make money from rug pulls.
Tickets at an arcade could be considered a currency because they only have value
You’re still thinking currency is supposed to have value beyond being something that makes it convenient to conduct transactions in. Money is a simply an incomplete transaction. You’re trading something of value for something else of value. You do labour you’re owed something. You buy a product, you’ve completed the transaction, trading labour for a product. Money exists when that transaction is incomplete. It’s a temporary thing that only exists because it’s inconvenient to haul around chicken, bushels of grain, or anything else someone might want whenever you’re making a trade.
Crypto currency operates on the premise that money is supposed to have value in and of itself and that value should be increasing. It’s valued because people believe it will increase in value with some underlying belief that it will someday become a currency. But once everyone that could ever get suckered into buying into it has already put all of their money into it, it can no longer increase in value and those that invested into it to make a profit will sell, causing the value to crash.
There is no benefit to crypto other than for illegal activities like money laundering and for scamming people. It would be stupid to take out a loan denominated in crypto as it could increase in value. So businesses will never be financed in crypto which means it’s inconvenient for business to pay employees in crypto, which means it’s inconvenient for those employees to buy legit products in crypto. The whole point of currency is to make transactions more convenient and crypto fails at that because borrowing crypto would be stupid.
So it’s not real currency and never will be because the libertarian concept of money that has increasing value doesn’t work for financing and therefore won’t work in a capitalist society.
Not really. Currencies are genuinely valuable, in that they resolve non-discretionary liabilities.
You could say that those liabilities are made-up too, as well as the laws that produced them, or the authority of the lawmakers that penned the laws, or that words can be derived from the scribbles that pen produces, or the notion of words themselves…
But ultimately, you’ll confront the fact that the IRS demands payment in USD or they’ll throw you in prison.
“It has value because the government says so” doesn’t mean any more to me than “It has value because drug dealers and tech bros say so”. If people stopped accepting the US dollar it would be worth nothing, because it isn’t tangible and has no inherent value on its own.
Stop paying your taxes and see if that argument holds water in a few years.
The monopole of violence :D
But people won’t stop accepting the US dollar, because they need it in order to pay their taxes. And even if they absolutely refused to accept it, it would still be worth something. Because if you had it, it could still be used to avoid punishment for failing to pay taxes.
Taxes are what give money value. Because being in prison is tangible.
That’s post-state money, pre-state money existed
farway before states even existed
