On 05/29/2013 08:45 PM, Levi Pearson wrote:
On May 29, 2013, at 5:30 PM, "Jessie A. Morris"<[email protected]>
wrote:
On Wednesday, May 29, 2013 16:56:31 Michael Torrie wrote:
Speaking of economics, I know that a few pluggers are diehard
libertarians. What do libertarian-mind people think of bitcoin? In
some respects it's more like a gold standard in that there is a finite
amount of bitcoins that can ever exist. On the other hand it is just as
fictional as fiat currency.
The difference is that the Government doesn't have a monopoly on Bitcoins. The
fact that there isn't a controlling body that regulates how many Bitcoins are
in circulation helps keep it out of the fiat currency camp.
And why is the gold standard not a fiat currency? It's only worth what people
think it's worth. Gold has little intrinsic value other than gold plated
connectors and looking pretty. It just happens to be something that people
value.
Fiat currency is specifically a kind of currency that is by definition not
pegged in value to any commodity. Gold-backed currency does not meet that
definition, and thus it is not fiat currency.
Actually, fiat currency is a good thing. Pegging the value of your currency to
a commodity or someone else's currency is asking for trouble. About the most
important thing a government can do is regulate its economy by keeping its
currency stable. Pegging the value of the currency to some arbitrary thing just
makes it harder for the government to do its job. There is a reason no one is
on a gold standard anymore.
I think we can all agree that nobody wants the deflation inherent to
hard currency, nor does anyone want the hyper-inflation risk inherent to
a soft fiat currency either. We want a stable currency, where my
savings are not worth less tomorrow simply from sitting, and which my
debt principal is not harder to repay either.
Unfortunately, I don't see cryptocurrency being the sweet spot between
the two. Frankly, it reminds me a lot of the Tulip Bubble.
Grazie,
;-Daniel Fussell
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