this post was submitted on 07 Nov 2024
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Crypto is a revolutionary product because it enables users to possess their own units of account. With great freedom, comes great security concerns. Keep in mind, the vast majority of scams are still conducted with fiat currency. Blaming ignorant crypto users does not overshadow the value digital assets provide to humanity. These benefits include: protection from fiat debasement, the ability to transact without intermediaries, global accessibility, privacy, and transparency. We're using the fediverse for fucks sake, so some of these features ought to be seen positively by many of us. You're absolutely right that greedy and gullible are drawn to crypto because "line goes up." There will always be a learning curve for new technology and hard lessons will be taught to early adopters.
Every single time anyone mentions crypto always some idiot comes out of the woodwork and starts to have an argument about the definition of fiat.
So let's just say this right now and then move on shall we, If it's currency it's fiat, therefore crypto is also fiat
Fiat is government-issued currency with no underlying commodity and no upper limit. Crypto has no government backing and its issuance is determined by each cryptocurrency system (maintained by miner consensus). Some crypto has upper limits and others do not. I think having no supply limit is the distinction you're trying to define as fiat.
It just means that it is a representation of some other wealth. Gold isn't fiat because gold itself is the thing that has value, currency is fiat because it is a representation of value not in and of itself valuable.
All currency is by definition fiat because all currency is a representation of value. And the crypto Bros keep telling us that bitcoin and similar are currency so they are therefore fiat.
Value of anything only exists in the minds of humans. No value is inherent to anything. You're absolutely correct that gold isn't fiat. But gold could absolutely be used as currency. Its in circulation and used as a medium of exchange. You're also right that crypto is a currency. But its not a fiat currency. Crypto and fiat are both mediums of exchange not backed by a commodity. The key distinction is that fiat also relies on trust from the issuing institution.
By this reasoning, so is Monopoly money.
I should have clarified: the revolutionary part is that through the possession of data (private keys), users are able to lay claim to their units of cryptocurrency.
Monopoly money is issued by Hasbro (private institution), can be fairly easily counterfeited, has little to no acceptance outside the context of a board game, and there's no upper limit to how much can be printed. On top of all that: there's no cryptographic way to prove the validity of Monopoly money and it can't be transferred across the planet as easily as sending an email.