Re:Understanding Bitcoin
by uvdiv on Sunday June 10, 2012 @09:17AM
(#4090966)
"Also there are three definitions on that page... Under the last definition bitcoin would be easily considered fiat."
Then I regret citing it, it is wrong. That third definition actually misrepresents its source (Mankiw's Principles of Economics) -- what Mankiw actually says is:
"fiat money: money without intrinsic value that is used as money because of government decree" (emphasis mine)
"Money without intrinsic value is called fiat money. A fiat is simply an order or decree, and fiat money is established as money by government degree..."
"It isn't mandated by law the value of any other law what the value of any fiat currency is."
I meant that fiat money only has value (as opposed to... no value) because it is mandated by law -- you are required to accept it as payment of debt, to pay taxes using it, etc. Sure, what the value is in real terms is a market decision.
Then I regret citing it, it is wrong. That third definition actually misrepresents its source (Mankiw's Principles of Economics) -- what Mankiw actually says is:
"fiat money: money without intrinsic value that is used as money because of government decree" (emphasis mine)
"Money without intrinsic value is called fiat money. A fiat is simply an order or decree, and fiat money is established as money by government degree..."
http://books.google.com/books?id=3ojsWuqmorEC&pg=PA644&#...
"It isn't mandated by law the value of any other law what the value of any fiat currency is."
I meant that fiat money only has value (as opposed to... no value) because it is mandated by law -- you are required to accept it as payment of debt, to pay taxes using it, etc. Sure, what the value is in real terms is a market decision.