Quote from: presstab on October 04, 2014, 05:17:51 PM

I just looked up the definition of "fiat money" in my favorite dictionary of economics (former econ student here). I tend to like their definition far better than the typical wiki/bitcointalk definition. There is a dichotomy between money - either commodity money (asset backed) or fiat money. Fiat money is a type of money that has no intrinsic value. This would mean all national currencies as well as most digital currencies are in fact fiat under this definition. Interesting that the article doesn't really say much about the method of issuance.

Glad to see I'm closer to the real definition of fiat money than the bitcointalk definition of it.

Excerpt from the Monero Handbook:

Quote from: Monero Handbook, David Latapie

The dollars or euros or yuans or whatever you are using are fiat money (fiat in latin means let it be done", like in fiat lux). A fiat money is a money that has no intrinsic value (lets give it a value by decree, one might say).
[...] The oppositve of a fiat money or money without an intrisic value is a commodity money, or money with an intrinsic value. Gold is such a commodity money since it is used in jewelry or electronics. Note, however, that the intrinsic value change overtime, depending of scarcity (which in turn relates to utility, itself being contextual).

I never understood why Proof of Work (or Proof of Stake, Transaction, Importance...) should make a crypto a commodity money. There is NO intrisic use of cryptocurrency tokens - even the most "intrinisically useful cryptos" (Primecoin and Riecoin) are still far from commodity money. So, if Proof of Work is not asset-based (commodity), then it is fiat. Period. Or we invent a third category (not a big fan of it).

On the other hand, as I note it in the Monero Handbook, even value is relative. Dioxygen is worthless in everyday life because of its abondance and despite its critical usefulness. But on restricted environment like submarines or space stations, it is much more valuable. Same goes for cigarettes when shit hits the fan. Even gold: Native Americans did not value gold as much as Conquistadores did. So, how reliable is this "commodity money" thing if even critically-important stuff like dioxygen may be worth much less than utterly-superfluous stuffs like a Lamborghini?

tl:dr: for me, fiat and commodity are mostly pointless ways to categorize money. There is stuff people want and stuff people don't. That's all.