Quote from: Raulo on February 22, 2011, 08:52:52 AM

Quote from: ShadowOfHarbringer on February 22, 2011, 08:47:33 AM

Dollar/Euro has value ONLY because government says so.
Bitcoin/gold/silver etc have value, because people believe so.

That is nothing like fiat.

No. US government can claim anything about US dollar in the USA. They can force you to anything. But abroad, US dollar is valuable because there is an economy that supports it and indeed people believe it's valuable.

No. You are missing what is cause and what is effect here.

People believe that dollar is valuable, because other people believe that it is valuable, because other people in the past believed that it is valuable, because in the past, government said so.

So the chain is belief/psychology <= belief (now) <= belief (past) <= government says so (past).
It all holds on the government's statement that it is valuable from the past. If we remove that from the equation, whole thing falls down like a house of cards.

Fiat currencies are "legal tender" bullshit. Bitcoin is not.