It's basically Beanie Babies, but with more direct environmental damage

Collective mythologies underpin most of modern life. Does the Turkish Lira have more or less intrinsic value than Bitcoin?

To say that state-backed currencies are equivalent to private currencies is to greatly misunderstand how things work in finance.

Traditional state-based currencies mostly exist because the government pays its obligations in that currency and also collects taxes in that currency. The state's population is forced to use that currency as a result for these behaviors.

This is the main difference between a state-backed currency and "private currencies."

This isn't to say that state-backed currencies can be a mess just like "private currencies." But these state-backed currencies fail with the governments based on balance of payments and debt and money printing, etc and it is very infrequent.

This. For a currency to have value you need to be able to buy things or satisfy obligations in it. What does a theoretical country named Bictoinalia export? Drugs, ransomware and speculation. And they're starting to lose drug export market share because the public ledger is easy to track people with.

No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice.

At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange. Usually using foreign currencies or other assets (precious metals, whatever). Now there is more choice here. There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.

[1] https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...

> No need to put private currencies in quotes. Here ECB talks about the interplay between public and private money [1] when discussing their CBDC (digital EUR) plans. I think this is a pretty interesting topic and just reducing it to 'private money == not real/useless' doesn't serve it justice.

I think that most major currencies will have mirror cryptocurrency versions as state-backed entities, replacing USDT and the similar more hand-wavy versions. This is definitely going to happen.

But this isn't "private currency" rather it is just the evolution of state-backed currency.

> At all times in unstable monetary conditions, such as hyperinflation, funny-money issued by occupation authorities, unrecognized governments, fiat currency mismanagement, etc, people have flocked to alternative means of exchange.

Make sense. If your country is in hyperinflation, do not hold its currency.

> There are reports from places in such conditions of people actually using digital assets for this. Whether it's better to hold Lira or Dash at this particular moment in time though, is a pretty open question.

Dash lost most of its value in the last 2 months. I am unsure what your point is. Dash obviously is a speculative asset and it is super hard to predict its future direction.

And the Turkish lira is liable to the whims of an authoritarian leader who doesn't believe in fiscal orthodoxy and keeps firing his central bank leaders as soon as they even hint at raising the interest rates in order to try and reign in inflation. Not great either.

EDIT: When ECB talks about private money they mean non central bank issued digital assets, among other things. Not their CBDC which would of course be public money.

Year over year the Dash is down 75% and the Lira is right around 50%. The Lira has much lower short term volatility. Plus, everyone knows what Turkey is, and there is an entire millenia old society interested in maintaining the value of the Lira.

$DASH meanwhile is a speculative "investment" with no underlying assets that most people has no idea exists.

$DASH could go to 0 tomorrow and it would probably not be reported on outside of crypto sites. Neither of those things is true for the Lira

> forced

Ultimately through threat of violence or depriving of liberty. That is, it is the state's monopoly on violence which makes a currency. Bitcoin, being state-less, has no such monopoly and must ultimately fail.

Although Venezula seems to have been making a first pass at it.

To be clear - the Lira is worth far more intrinsically than bitcoin.

The reason is simple: The Turkish Lira has a government (complete with courts, military, bureaucrats, police, banks, etc) that has committed to enforcing transactions in the Lira.

Does that mean the speculative market for Lira must be bigger than bitcoin? No, of course not. But it does mean there's fundamental utility to the Lira that absolutely does not exist for bitcoin.

I think a key difference with traditional currencies is that the countries that issue that currency will do anything in their power to maintain at least some of the value of that currency. I'm not sure how true that is for crypto investors. It's likelier they'll cut their losses and run.

Getting too hung up on the precise philosophical definition of intrinsic misses the point, imo.

Things that make Lira less mythological and more intrinsicly valuable include:

- It is a more stable store of value

- It holds a more stable relationship to the value of everything else in the Turkish economy

- It is more widely accepted for buying and selling good and services

These three things are real world practical differences.