Quote from: fxsurfer on April 13, 2018, 07:16:57 AM

The whole article talks about the distinction between "alphanumerical characters" (abstractions) and things(stock, bonds, gold certificates, fiat money, patents) that are represented and quantified with this abstractions. The article also explains how fiat money is backed by banks assets and by land, cars, homes and other property of borrowers. All you did in your post was show a complete ignorance of the arguments the article is making and just repeated flawed phrases "fiat money is an abstraction" and "it's not backed up by anything", which are phrases repeated like a mantra in crypto community. So, in your post there is nothing of substance worth rebutting.

Look you seem to just blindly accept what is written on that article, but I will try again.

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As we can see, when dollars for e.g., are put into circulation, those that didnt own tangible and intangible things (borrowers) became their owners, while those who did own them abandoned their ownership rights of these things and became the owners of alphanumeric characters that are written on a piece of paper or memory in a banks computer, or in short they became the owners of dollars

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borrowers have two options: either they will sell their valuable things to dollars owners directly on the marketplace to get dollars for their loan payments, or the banks will take possession of their land, cars, homes and will sell borrowers valuable things to dollar owners indirectly.

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So, contrary to what many people believe, fiat money is not just a piece of paper or memory in a banks computer with some alphanumeric characters. Instead, it is an actual legal claim, backed by banks assets and borrowers property.

First, debt doesn't always work that well, and that's why we keep having market crashes, like the one we had in 2008. Banks sell debt, people end up not being able to pay their debt, banks get their houses, but then the house is not worth that much apparently, and suddenly the "perfect scheme" illustrated in that article doesn't work anymore. Banks have houses that are worthless, we end up having a lot of dollars in circulation, inflation kicks in, and now everyone is poor because their precious dollars aren't worth that much anymore.

Developed countries end up recovering from those mistakes that lead to crashes, but look at Zimbabwe, where their currency was so wrongly printed that their entire fiat system crashed beyond recovery. If things were so perfectly balanced, and fiat was backing land and properties, etc, please do explain what happened there...

Things are not always perfect and there is room for the hole system to crash, as history has proven us many times, and it will continue doing so. This happens because the system doesn't follow simple math rules. If it doesn't follow simple math rules, and it can fail, then it's based on faith.

If I buy a rare baseball card, or any collectible item, what am I buying? It's not the card itself, it's just a piece of plastic that is not made by very special materials. It has symbolic value for fans, etc. That's what I'm buying when I pay for a collectible item. This has nothing to do with bitcoin, what I'm trying to describe here, is that we are the ones to perceive and give value to things. That can happen to anything, including cryptocurrencies.

When people buy bitcoin, they are buying the security and convenience that it's network provides to carry out transactions in a decentralized way. People see value in gold because it is scarce. It's not because of it's industry utility. Just a very small portion of gold is used in industry, because there are simply better and cheaper materials available out there. So again, gold has the value because we agree it has value.

We usually value scarcity, we value security, we value convenience, and Bitcoin has all those things.

If I gave you 1 BTC, you could:
- give it away to someone else;
- simply forget about it because you don't believe in it, and it would be same as stepping on a rock, so you would simply leave it behind;
- sell it to someone else at the current price;

In all those scenarios you would probably be losing, simply because you don't understand the value of a Bitcoin.