Sure, if you entirely change the definition of fiat currency.
A fiat currency gets its value by being declared by government as legal tender, and then required by law to be accepted in a jurisdiction.
Bitcoin might share the "no intrinsic value" property of fiat, but that does not make it fiat. It's pretty much the opposite of fiat in every other respect.
Even for gold, the majority of its market value is not from industrial use -- it's from speculation driven by scarcity (pretty much exactly like Bitcoin.) This applies to gold jewelry too -- the scarcity of gold gives it its market value.
It's worth noting that the definition of "fiat" in economics depends on which economist you ask. From Famous Myths of "Fiat Money", Dror Goldberg (2005):
> Monetary economics has an ideal construct of its own. It is what economists call "fiat money." This is an object that has no intrinsic value and is not convertible into anything. An implicit assumption in the definition is that no one is forced to use such money and that the money has no other legal status such as legal tender. Acceptance of such money is entirely discretionary and based exclusively on the expectation that others would accept it too, even though no one else is forced to accept it (Wallace 1980).
> Interestingly, monetary economists do not claim that their "fiat money" concept is fictional. On the contrary, they identify it with the modem money we use in reality. Legal scholars and laypersons call the money we actually use by the same name since "fiat" refers to its status as legal tender. Monetary economists usually ignore this status.
I personally prefer the definition you use, because it fits nicely with the non-monetary definition of "fiat", but it seems arguments over what constitutes fiat often devolve into arguments of semantics given the term's ambiguous history.
which makes it interesting as to why Ripples get "so much" value as a currency that has so many "coins". From Coinmarketcap[1], the circulating supply of ripples is 38,531,538,922 while bitcoin is limited to 21,000,000.
The other interesting thing is that Ripples "distribute" its coin as opposed to letting miners mine them.
I know nothing about economics so I would be interested to know why people put much value on Ripples. (disclaimer: I myself invested 6000 ripples just because they are currently cheap compared to the market cap they have.)
This sentence doesn't even begin to make sense...
The absolute value of any of these tokens is completely irrelevant. Same as it is for a US$ or CAD. You can define your own "decadollar", worth $10, get everyone to switch, and it would make absolutely no difference to the economy.
Also, you need dollars if you will ever have any kind of dealings with the American Judicial system.
I’d be interested to know how many people would actually need to agree a fork that, say, didn’t halve the coinbase.
Also, of those, how many would give priority to the philosophical underpinnings of Bitcoin over making more money in the short/medium term.
Some will stop using it, sure. And they probably have enough coin to affect the price short term.
But I’d argue that the majority of usage is now not for political/philosophical reasons but for economic ones.
The longest blockchain which follows the rules. If a chain does not follow the rules, it will be ignored by the nodes, even if it's the longest one. To change the rules, you have to update all nodes, not just the miners.
The interesting part of the Bitcoin experiment is that so far it has had a very large inflation. This has been decreasing, and the critical part of the experiment will determine if a deflationary currency will work or not. My guess is that it might be in danger of collapse as miners will not want to mine it due to lack of incentive, meanwhile users would not want to transact since most will be hoarding it. Which is when the issuance rate might need to be fixed just to keep the miners rewards going...at least, it's one of the scenarios to consider...
Clearly not by the only widely-used and -understood definition. Which reasonable definitions are you proposing? The key feature of fiat currency is that its usage as money is legally established by a government. That is clearly not the case with Bitcoin, unless you want to play semantic tricks and call the Bitcoin community or a set of algorithms a “government,” but that is very clearly not how the vast majority of people uses the term.
Just as flowers demonstrate more value than a toaster precisely because it shows a willingness to convert all value into prostration, so does a golden tower.
Gold is valuable because it is rare and pretty and most importantly useless. (industrial applications are minor and also only a modern application) flowers to toasters are gold to oil. Gold is pure concentrated and destroyed value. It is giving up of true value in the survival sense for spiritual or emotional value. Super expensive clothes or bags are similar and even take it to the next level in that they decay via fashion trend. It is even more destruction of value.
Diamonds similarly are more concentrated representations of value despite their market price being a sham. They serve an important purpose in signalling to find a person or thing that can give a person affirmations of value.
Bitcoin and other digital currencies can concentrate to an infinite degree but lack aesthetic qualities. It doesn't impress women and doesn't impress our current gods because it isn't visible and can't be used as a status symbol to strangers. ("Traditionally" the "strangers" that can affirm value are women and gods. )
Bitcoin is accessed via knowledge of a key and it traditionally hasn't been a status symbol. (Unless it was knowledge of culture) However there is currently a paradigm shift from "traditional" values that are human/social/god based to newer values that revolve around knowledge, technology and non-human specific interestingness.
Bitcoins growth initially was due to the futurist/cypherpunk movement. Other phases of growth include "early adopters" or "technologists". A recent large push has come from financial types who don't want to miss out and have traditionally used market signals to follow value without needing to understand underlying reasons.
The biggest push will need to come from all the value locked up in traditional storage but to do that a paradigm shift needs to happen where gold becomes valueless. I don't know if Bitcoin can do this yet. Perhaps when smart contracts start taking over the world and blurs the line between digital and non-digital. Forks however seem to muddy the signalling potential though. The mass of people who understand what a "vintage" Bitcoin needs to be big and btc doesn't have the uniqeness of collectibles like art or antiques.
In the end it's important to distinguish between symbols of value which often require destruction of value in their creation and actual value which serves some secular need. Symbols are built entirely on faith. Strangely, this can last much longer than "real" value. Salt and grain used to be real value but aren't anymore due to technology but gold has lasted thousands of years.
To require something to need "real" value is to ignore the importance of humans.
Bitcoin is a fiat currency because it only has value while some group of humans collectively agree to pretend that is has value. The same as dollars or yen.