<story><title>Bitcoin is fiat money, too</title><url>https://www.economist.com/blogs/freeexchange/2017/09/not-so-novel</url></story><parent_chain><item><author>labster</author><text>So you&amp;#x27;re telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency.  Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.</text></item><item><author>mirimir</author><text>Yes, that&amp;#x27;s the distinction. With Bitcoin, a codebase prevails if it attracts enough miners, merchants and users. Those parties in aggregate have &amp;quot;fiat power&amp;quot;.&lt;p&gt;It&amp;#x27;s arguable that fiat power for each state similarly reflects preferences of banks, merchants and users. However, some of us doubt that money policy typically favors users.&lt;p&gt;With government fiat, forking isn&amp;#x27;t really possible, without a revolution, no matter how unhappy users are. But with Bitcoin etc, that is possible.&lt;p&gt;It&amp;#x27;s a common misconception that miners drive Bitcoin policy. In my opinion, miners are parasitic. When I first started using Bitcoin, there were virtually no professional miners. Users did all of the mining, locally. So difficulty was very low. Now, with so many professional miners, difficulty is very high. However, blocks get solved in 10 minutes on average, just as they did in the beginning.&lt;p&gt;Anyway, it&amp;#x27;s true that Bitcoin is a fiat currency. But governments aren&amp;#x27;t in control, and that&amp;#x27;s a good thing.</text></item><item><author>amb23</author><text>&amp;quot;Code is governance&amp;quot; -- the article does support the idea of cryptocurrency as fiat money because the laws, in this case, are the code. The developers and miners, no matter their good intentions, do hold power over the currency that everyday investors do not have. No matter how egalitarian the distributed ledger set up looks on paper, we&amp;#x27;d be remiss to think the power structures behind cryptocurrencies are so radically different from the fiat currencies developed in the past and used at present. With time, especially if the cryptocurrency bubble pops, we&amp;#x27;ll be sure to see those structures made more explicit than they seem now.</text></item><item><author>dnautics</author><text>Interestingly the economist misses the traditional definition of Fiat: a currency whose value is determined by the &lt;i&gt;Fiat&lt;/i&gt; of a state.  Whether or not Bitcoin exhibits similar trends as currency that isn&amp;#x27;t backed by the state is immaterial to the ethical appeal (to some) of a medium of exchange where participation is voluntary and consensual.</text></item></parent_chain><comment><author>AlexCoventry</author><text>If you really think you have a say in monetary policy, I suggest you read Barofsky&amp;#x27;s &lt;i&gt;Bailout&lt;/i&gt;.</text></comment>
<story><title>Bitcoin is fiat money, too</title><url>https://www.economist.com/blogs/freeexchange/2017/09/not-so-novel</url></story><parent_chain><item><author>labster</author><text>So you&amp;#x27;re telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency.  Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.</text></item><item><author>mirimir</author><text>Yes, that&amp;#x27;s the distinction. With Bitcoin, a codebase prevails if it attracts enough miners, merchants and users. Those parties in aggregate have &amp;quot;fiat power&amp;quot;.&lt;p&gt;It&amp;#x27;s arguable that fiat power for each state similarly reflects preferences of banks, merchants and users. However, some of us doubt that money policy typically favors users.&lt;p&gt;With government fiat, forking isn&amp;#x27;t really possible, without a revolution, no matter how unhappy users are. But with Bitcoin etc, that is possible.&lt;p&gt;It&amp;#x27;s a common misconception that miners drive Bitcoin policy. In my opinion, miners are parasitic. When I first started using Bitcoin, there were virtually no professional miners. Users did all of the mining, locally. So difficulty was very low. Now, with so many professional miners, difficulty is very high. However, blocks get solved in 10 minutes on average, just as they did in the beginning.&lt;p&gt;Anyway, it&amp;#x27;s true that Bitcoin is a fiat currency. But governments aren&amp;#x27;t in control, and that&amp;#x27;s a good thing.</text></item><item><author>amb23</author><text>&amp;quot;Code is governance&amp;quot; -- the article does support the idea of cryptocurrency as fiat money because the laws, in this case, are the code. The developers and miners, no matter their good intentions, do hold power over the currency that everyday investors do not have. No matter how egalitarian the distributed ledger set up looks on paper, we&amp;#x27;d be remiss to think the power structures behind cryptocurrencies are so radically different from the fiat currencies developed in the past and used at present. With time, especially if the cryptocurrency bubble pops, we&amp;#x27;ll be sure to see those structures made more explicit than they seem now.</text></item><item><author>dnautics</author><text>Interestingly the economist misses the traditional definition of Fiat: a currency whose value is determined by the &lt;i&gt;Fiat&lt;/i&gt; of a state.  Whether or not Bitcoin exhibits similar trends as currency that isn&amp;#x27;t backed by the state is immaterial to the ethical appeal (to some) of a medium of exchange where participation is voluntary and consensual.</text></item></parent_chain><comment><author>kemiller</author><text>It’s not really government money though, is it?  It’s bank money.</text></comment>