Why Bitcoin is NOT fiat Currency.
Fiat is government issued money. The word Fiat is Latin for “Let it be done”. Authorities can declare pretty pieces of paper to be money by issuing a fiat command. They then reserve the power to create debt notes when they see fit in ways that can keep themselves in the authority, but then dilute the purchasing power of ‘the little people.’
Bitcoin and other cryptocurrencies are as similar to Abe Lincoln’s reference to democracy enjoyed by the USA , “…of the people, by the people, and for the people and shall not perish from this land”. Cryptocurrencies are democracy of money. The people’s money is free from government corruption and control and cannot be shut down or stopped by anyone permanently. They evolve (see bitcoin fork to bitcoin cash) when resisted.
They exist everywhere and nowhere at once. They are beyond all single nation’s laws as it knows no nation or border. Stopping them would be like trying to kill a great idea. Victor Hugo remarked that “There is one thing stronger than all the armies in the world, and that is an idea whose time has come.” Nations continue to learn it’s a fool’s game to try. They will have to find a way to adapt.
The best cryptocurrencies are only created on a predictable and unalterable schedule and rise in value as people come to realize this. They are limited, are not created through debt, but through intensive work rooted in laws of laws of thermodynamics, physics, and math. Not by fiat commands formulated through secretive meetings of elites behind locked doors. Unlike fiat, they were never coerced into acceptance by any national figure — ever.
Cryptocurrencies represent freedom from dictators, bad monetary policies, corrupt bankers and give regular people a monetary weapon to fight back around the world. It’s the right to bare fiscal arms. It was built without permission or apologies. The people who use it are exercising their right to free speech and to express themselves how they see fit. It is formed from the ground up — rather than top down from the powerful 1% of 1%.
Some corrupt bankers (See Jamie Dimon) will argue and complain because it threatens to remove their power base. These currencies threaten the need for ‘too big to fail’ banks because people around the world can now route around the banks. Bankers like Dimon would rather you not remember the bailouts or the billions in fines for corruption and money laundering issued to his bank (JP Morgan). They would have you ignore the people living in failed governments around the world (see Venezuela) whose citizens often hang on to bitcoin as a life-line while their government currency has again lost all value. Like hundreds of failed fiat currencies issued by central banks and failed governments before them.
Bitcoin cannot be bailed out. It has come to represent more than just a currency — because of these unalienable properties , it is also a movement. It continues to explode in popularity as people come to realize these key facts. Cryptocurrencies are the idea whose time has come. Some people ask “What backs them up”? Put simply, social consensus. The knowledge that bitcoin blockchain records are immutable and incorruptible, and require no middleman assuring you that it’s still there. The world can see that it is there. Trust in this fact is tokenized — appreciated and wanted. Supply is limited, demand is growing, economic law does the rest.
Why do people value gold and silver? One could argue that it is also trust. However, past arm’s length, it requires trust in someone. The further away, the more strangers one must trust to assure them that it is still there when they can no longer see it themselves. Throughout history — this has proved disastrous. The better question is — what backs up the integrity of a fallible person who is counting your gold and silver when you can’t?
These digital currencies cannot be un-invented. The Genie will never go back into the bottle. Nobody will apologize to those bad governments who will now have to measure themselves against a new kind of standard bearer. We SHOULD expect this to make some of them very uncomfortable. Bitcoin stands up against the bullies. It refuses to go into that good night. See China attempt to ‘ban’ crypto again by closing exchanges.
Soon, exchanges themselves will be unnecessary and the unintended consequence of this action will lead to more underground and private coins that will be untraceable. They will be converted through smart contracts that won’t need to touch a regulated exchange. It challenges the status quo, just like the very best inventions in history. These are some of the reasons why we are at the very beginning of a new paradigm in world history: and you are very lucky to be alive to witness it.
But, is there a place for you in history? Will you join the movement — or are you happy with things the way things were and content with defending it? People’s eyes continue to light up, and their mouths drop when they take in the full nature of this change and what it will mean in the future.
The word “FIAT” may mean “let it be done” Cryptocurrencies — just WILL be done. Because … we the people said so. Without permission. Without Apologies.