some percentage of society are sociopaths; the type of people who, when they believe no one is watching and they can get away with it, will do anything evil if it gives them an advantage.
We sure don't need Christianity then. Christianity has some justifications for some pretty horrible shit. Plenty of sociopaths have used religion to justify their craziness. "God wanted me to blow up the bus, it was full of people who were working on the sabbath."
Maybe we should indoctrinate our children with Jainism instead of Christianity if we are really worried about sociopaths.
Also, an intelligent sociopath who believes in religion (is there even such a thing?) would probably reasonably deduce that God can see into his sociopathic soul and know that he is only refraining from evil deeds to avoid punishment. He knows he would do evil stuff if God didn;t exist, and he knows that God knows. He may as well just commit the evil deeds if he is an evil person, because he isn;t getting into heaven anyway.
Another line of reasoning an "intelligent" religious sociopath might have is the following. He knows he is a sociopath, and reasons that God must have made him a sociopath for a reason. Maybe he is destined to blow up a bus full of children as part of God's plan. Maybe he is supposed to be the evil that God's love appears super awesome in relation to. God made Satan. Maybe God made sociopaths for the same reason he made Satan (i.e. to do bad stuff and take the blame).
I would say the law should go one step further and remove the restriction to justify refusing service to blacks with anything (much less some passage from some meaningless book).
This way it now becomes possible to find out who these bigots are, and refuse service to them on non-religious grounds.
It is possible to believe in free association without thinking taxes are theft.
Businesses that only let in people with proper attire and enough money are also discriminating, just based on different criteria.
You are free to draw the line between public and private where you have, but I don't see any good reason to draw it there, unless your only concern is preventing blatant discrimination.
The real question is whether you think a restaurant should have the right to discriminate against gays, black people, jews, swedes, poor people, poorly dressed people, etc. I think they should. It's not because I think discrimination is ok. I just think freedom is more important than masking discrimination. It is the same reason I support the freedom to say racist, anti-gay, anti-poor, etc things. I believe freedom of speech is more important than not hearing bigoted speech.
Also, I would rather know the truth about how people feel rather than forcing them to behave a certain way.
It should be a right for the same reason that the freedom to say bigoted things should be protected by freedom of speech. Free association: the freedom to have associations with whomever you want so long as these associations are mutual, is important.
I should also point out that freedom of association also includes the freedom to fire people for being bigots. So there is a positive aspect to it as well.
Granted, we don't currently have the right to free association (or at least companies don't) because of anti- discrimination laws, but I think this is actually just serving to mask the symptoms of a problem rather than actually solving a problem.
I would much rather live in a world where bigots were free to discriminate, and everyone else could easily point them out. Now they just sort of hide in the shadows and try to construct alternative reasons to discriminate against people. I would much rather hear "We didn't hire you because you are biracial, and we don't like that", rather than forcing them to have to make up a fake excuse. At least it would be honest. We as a society could take a more honest account of how bigoted we are, and we can claim to be more free than we currently are.
I am offended that this bill unfairly discriminates against people whose discriminatory views stem from dumb beliefs other than religion.
Why should a person whose idiotic views stem from some idiotic religion be given special privileges over someone whose idiotic views stem from some other idiotic belief system like astrology, ESP, belief in aliens, belief that the moon landing was faked or that 9/11 was an inside job. These idiotic views are just as legitimate as Christianity for purposes of discriminating against people.
The US government can provide regulation to exchanges that deal in bitcoin, even if bitcoin remains unregulated. They can regulate exchanges that deal with Euros and Yen, even though they don;t get to regulate Euros and Yen (someone else does).
Regulation of a currency and regulation of a currency exchange are 2 different things.
When someone says "bitcoin is free of government regulation", they are usually referring to things like money creation, freezing of accounts, etc. You can still have a government regulated exchange of an unregulated currency.
Gold is unregulated in the sense that government can't simply print more gold and it can't electronically take the gold bars hidden in your freezer. Gold exchanges can still be regulated to increase the probability they are legit.
Kind of sad that a new currency - whose main idea was that it should be easy for private people to transfer money over the internet, free of charge
It wasn't free. You still had to pay a small percentage to incentivize miners to add your transaction to the blockchain.
actually need these big "exchange-places" who not only takes out a charge (=makes money on your transaction) but actually becomes more and more as a regular bank.
They take a percentage because they are providing an escrow service and a service of connected buyers and sellers, and this costs money to do.
You can transfer bitcoins just fine by yourself without an exchange or bank. The reason you need an exchange is that bitcoin doesn't magically allow you to find people willing to buy or sell bitcoins at market price instantly, and bitcoin doesn't provide an escrow service (i.e. It doesn't guarantee that whoever you send bitcoins to will wire $1000 to your bank account)
If you trust the person you are sending bitcoins to (e.g. amazon, your gorcery store, your drug dealer), then you don;t need an exchange. If you know a person who will buy/sell from/to you any amount of bitcoins at market price at any time, then you don't need an exchange.
Mt. Gox is an exchange. It is only like a bank in that exchanges in general are kind of like banks. Mt. Gox is where you exchange dollars for bitcoins and bitcoins for dollars. They would coordinate buyers and sellers, provide an escrow type functionality, and take a percentage of the trade volume.
At any given time there was X dollars and Y bitcoins in the posession of Mt. Gox that belonged to traders. This is true at every exchange. One day, Mt Gox couldn't/wouldn't allow withdrawal of these X dollars and Y bitcoins. They claim it was stolen and maybe it was by Mt. Gox, who knows.
You don't need a bank for bitcoins. You do need an escrow service if you want to trade with untrusted people on the internet. You trust amazon to send you a package once you buy it form them. You might even trust ebay sellers (because of the system ebay sets up). You could also trust the guy claiming he will wire you $1000 to your bank account once you transfer a bitcoin to him. Using an exchange makes it so you don't have to trust the guy (or even find him yourself), but then you have to trust the exchange, which in the case of Mt. Gox, seems to have been a bad idea in retrospect.
Currency is a medium of exchange that *can* also be a unit of cost. If the value fluctuates wildly, then you need to use something else as a unit of cost. You can use dollars, euros, gold, beanie babies, cans of soup, etc, and just exchange the right number of bitcoins at market rates. This is how we are able to buy goods from foreign countries even though currency exchange rates are constantly fluctuating. This is also how we buy things locally given that there is constant inflation.
What you are describing is "unit of cost". Bitcoin is currently useless as a unit of cost. It is not useless as a currency. This is why black markets use it. There is nothing about black markets that make them able to use useless currency more than anyone else. They just value the anonymity of bitcoin more than the price stability of the dollar (it's ability to be used as a unit of cost). Why? Because they can just use the dollar as a unit of cost and bitcoin as a currency. They still price everything in dollars or euros, and simply perform exchanges in bitcoin at current market values. It's a lot of extra math calculations, luckily the computers do all the work (same as with traditional finance).
Even after this crash, bitcoin has only dropped in value to it's value from november 2013. Anyone who invested before then is still doing fine. Anyone who only uses bitcoin as a medium of exchange (i.e. a currency) rather than for speculation/investment is also fine.
You can use a volatile currency. Silk road had some kind of hedging system where they insulated buyers and sellers from price fluctuations. It doesn't really matter if I need to use 10 bitcoins to buy drugs today and only 1 bitcoin tomorrow, and 5 bitcoins the day after that, if I only had to pay $1000 to get that amount of bitcoins each time.
I believe the economic term is "unit of cost". You can use bitcoin as a currency without using it as a unit of cost.
This has nothing to do with the currency. Regulated currency != regulated exchanges. It has to do with the fact that the exchange was unregulated. You can just as easily have an exchange of regulated currency where the owners run away with the money, or get robbed, or both.
Gold is not regulated, but gold exchanges can still be regulated. Bitcoin exchanges could also be regulated, they just aren't right now.
most of the decisions are made by architects as oppose to developers.
This is probably a good thing. Ideally all software developers would be good software architects as well, and we could always trust them to make good high level design choices. In practice this is just not the case. My suggestion to anyone the position of wanting to make higher level design choices is to do whatever you can to get that sort of a promotion or to do what the OP is contemplating and move to a smaller company where the head (maybe only) developer (i.e. you) *is* the architect.
Lots of people are perfectly content implementing other people's designs or hunting down bugs, etc. We don't want everybody to have input into high level design. Some aren't going to be good at it. And even if everybody was good at it, having every developer writing code with their own design methodology is going to result in a big mess. Too many cooks spoil the broth. Consistency of vision is good (assuming the vision is good, if it's not you're fucked anyway).
Thanks for the link. Although that particular article seems to be trying to use the fact that bitcoin is not a commodity along with mises views on money and commodities to show that bitcoin is not real money.
I am well aware of the libertarian division on bitcoin. It's either a technological salvation, or a giant ponzi scheme depending on which libertarian you ask.
I consider myself a libertarian, although not one of the typical ones you find these days.
I wouldn't consider myself a mises proponent, although I probably agree incidentally with some of his arguments. In regards to this particular Mises quote, I am not sure there is a clear way to interpret it. I could see it to mean:
1. Lots of things including gold and bitcoin would emerge as a commodity
2. Not a lot of things emerge as a commodity (bitcoin is somehow different than gold)
3. It doesn't make sense
Not necessarily in terms of ideology, but only in terms of which libertarian economic ideas I find interesting, I would more associate with Milton Friedman, Hayek, etc. Mises just seemed like too much of an idealogue to me, and also kind of boring. That said, I am not necessarily opposed to people like Keynes or even people like Marx. I think there are probably several workable economic models ranging from very libertarian to very socialist, and it is important to recognize that parts of economic theories of various people may hold insight and be useful even if their ideas as a whole have problems (Mises included).
Unfortunately, ideological economics books are just way too boring for me to actually read, and I'd rather just have discussions with people on the subject of economics without actually having to read anything.
And that logic would be absolutely valid. A bitcoin is useful - as a currency, nothing else.
I guess we agree that bitcoin is not a commodity then:)
I would go one step further and say that while gold is technically a commodity, it's use as a commodity is almost completely overshadowed by it's use as a medium of exchange (i.e. a currency), and if we treated gold as purely a currency, we would see pretty much exactly what we see now, minus some gold plated electrical conductors.
And if I may ask, why would bitcoin being a commodity bolster anyone's ideology? What possible negative implication does the non-commodity status of bitcoin have on which ideology?
Obviously there are all kinds of crazy ideologies out there, but I am just not aware of any that need bitcoin to be more than just a (non-fiat) currency.
If it is true that something like jewelry is "useful" because there is an industry built on it, then bitcoin is the same kind of "useful" by the same logic.
I am not arguing that gold and jewelry don't serve as status symbols. I am saying that I don't consider status symbols to be useful in the same sense as things like food, water, and shelter (i.e. in the sense that we are no worse off without status symbols).
Also, I think gold's usefulness in jewelry comes mostly from the fact that it is valuable as a currency. If all of a sudden you could synthesize gold in the lab for $0.01/ton, what would change? maybe we'd see more gold coated stuff to serve as conductors for non-corrosive qualities. But I suspect the era of gold jewelry would be over, because it stops being a status symbol if everyone can get it easily. Not only that, but fake gold would no longer be produced (why would you want to fake being cheap?). All the gold bars stored in safes would be taken to the scrap yard.
There was a time when aluminum was more valuable than gold, because we did not have the technology to extract pure aluminum from bauxite. Aluminum is definitely useful, and while not cheap, is certainly much cheaper than it used to be due to it's newly acquired abundance. It is valuable because it is noncorrosive and relatively light for how strong it is. If we were to remove all but 625 cubic meters of aluminum from the earth (about how much gold there is on earth), it would surely become more expensive and we would probably store it in vaults and use it in jewelry, but I wouldn't say that aluminum would have become more useful, it probably became less useful, because now it is no longer cost effective to make aircraft from it, regardless of what price per ounce aluminum jumps to.
Obviously gold is not going to become magically abundant in the way that aluminum did. This was just hypothetical.
Yes everybody has the authority to create whatever kind of new money they want. What they don't have the authority to do is to make it valuable to people (i.e. by forcing people to accept it as payment). The creation of the money is not by fiat. The value of money through forced use is by fiat.
I agree that it doesn't ultimately matter what concept we associate with fiat. That's just semantics. The point I am trying to make is that with bitcoin the value is not by fiat. Nobody is forced to accept bitcoin as payment. People choose to accept bitcoin as payment (i.e. they choose to value it). This is in contrast to other currencies (which I and English wikipedia refer to as fiat currencies like the dollar and euro) , which have the force of law behind them.
And I would object that bitcoins are "out of nothing". They require a great expenditure of resources (i.e. electricity) to create. Dollars only require flipping a few bits in a computer to create. You can create a trillion dollars as easily as you can create 1 dollar. This is not true of bitcoin.
The "fiat" part of fiat money is referring to the fact that "someone" is simply proclaiming/decreeing the money to have value rather than it having instrinsic value or being able to be exchanged for something of intrinsic value. This "someone" needs to have the legal authority to create the fiat money in the first place (i.e. a government).
Bitcoin is not a fiat currency because it doesn't have intrinsic value. It is not a fiat currency because no authority has proclaimed "let it be done" (i.e. the "fiat" part) that this currency shall be accepted as money. People have decided to value bitcoin without any proclamation/decree from any authority. The creator of bitcoin lacks the authority to give a fiat decree. People freely and organically chose to value this new currency. This is similar to the way that people organically decided to value gold despite it's lack of utility, although gold was natural rather than being a human artifact.
This is the historical connection between the word "fiat" ("let it be done") and concepts like intrinsic value, commodity backing, and government authority, etc.
From wikipedia:
Fiat money has been defined variously as:
1. any money declared by a government to be legal tender.
2. state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
3. money without intrinsic value that is used as money because of government decree.
Notice how the word government or state is mentioned in each definition.
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some percentage of society are sociopaths; the type of people who, when they believe no one is watching and they can get away with it, will do anything evil if it gives them an advantage.
We sure don't need Christianity then. Christianity has some justifications for some pretty horrible shit. Plenty of sociopaths have used religion to justify their craziness. "God wanted me to blow up the bus, it was full of people who were working on the sabbath."
Maybe we should indoctrinate our children with Jainism instead of Christianity if we are really worried about sociopaths.
Also, an intelligent sociopath who believes in religion (is there even such a thing?) would probably reasonably deduce that God can see into his sociopathic soul and know that he is only refraining from evil deeds to avoid punishment. He knows he would do evil stuff if God didn;t exist, and he knows that God knows. He may as well just commit the evil deeds if he is an evil person, because he isn;t getting into heaven anyway.
Another line of reasoning an "intelligent" religious sociopath might have is the following. He knows he is a sociopath, and reasons that God must have made him a sociopath for a reason. Maybe he is destined to blow up a bus full of children as part of God's plan. Maybe he is supposed to be the evil that God's love appears super awesome in relation to. God made Satan. Maybe God made sociopaths for the same reason he made Satan (i.e. to do bad stuff and take the blame).
In your private affairs you can be as bigoted as you want. You can also speak or write about it, have religious convictions, whatever.
Why?
I would say the law should go one step further and remove the restriction to justify refusing service to blacks with anything (much less some passage from some meaningless book).
This way it now becomes possible to find out who these bigots are, and refuse service to them on non-religious grounds.
It is possible to believe in free association without thinking taxes are theft.
Businesses that only let in people with proper attire and enough money are also discriminating, just based on different criteria.
You are free to draw the line between public and private where you have, but I don't see any good reason to draw it there, unless your only concern is preventing blatant discrimination.
The real question is whether you think a restaurant should have the right to discriminate against gays, black people, jews, swedes, poor people, poorly dressed people, etc. I think they should. It's not because I think discrimination is ok. I just think freedom is more important than masking discrimination. It is the same reason I support the freedom to say racist, anti-gay, anti-poor, etc things. I believe freedom of speech is more important than not hearing bigoted speech.
Also, I would rather know the truth about how people feel rather than forcing them to behave a certain way.
It should be a right for the same reason that the freedom to say bigoted things should be protected by freedom of speech. Free association: the freedom to have associations with whomever you want so long as these associations are mutual, is important.
I should also point out that freedom of association also includes the freedom to fire people for being bigots. So there is a positive aspect to it as well.
Granted, we don't currently have the right to free association (or at least companies don't) because of anti- discrimination laws, but I think this is actually just serving to mask the symptoms of a problem rather than actually solving a problem.
I would much rather live in a world where bigots were free to discriminate, and everyone else could easily point them out. Now they just sort of hide in the shadows and try to construct alternative reasons to discriminate against people. I would much rather hear "We didn't hire you because you are biracial, and we don't like that", rather than forcing them to have to make up a fake excuse. At least it would be honest. We as a society could take a more honest account of how bigoted we are, and we can claim to be more free than we currently are.
I am offended that this bill unfairly discriminates against people whose discriminatory views stem from dumb beliefs other than religion.
Why should a person whose idiotic views stem from some idiotic religion be given special privileges over someone whose idiotic views stem from some other idiotic belief system like astrology, ESP, belief in aliens, belief that the moon landing was faked or that 9/11 was an inside job. These idiotic views are just as legitimate as Christianity for purposes of discriminating against people.
The US government can provide regulation to exchanges that deal in bitcoin, even if bitcoin remains unregulated. They can regulate exchanges that deal with Euros and Yen, even though they don;t get to regulate Euros and Yen (someone else does).
Regulation of a currency and regulation of a currency exchange are 2 different things.
As long as the bitcoin is in your wallet and not in Mt. Gox's wallet you are fine.
People seem to use the term ponzi scheme for anything where early investors make a lot of money. If this were true, then Google is a ponzi scheme too.
When someone says "bitcoin is free of government regulation", they are usually referring to things like money creation, freezing of accounts, etc. You can still have a government regulated exchange of an unregulated currency.
Gold is unregulated in the sense that government can't simply print more gold and it can't electronically take the gold bars hidden in your freezer. Gold exchanges can still be regulated to increase the probability they are legit.
Kind of sad that a new currency - whose main idea was that it should be easy for private people to transfer money over the internet, free of charge
It wasn't free. You still had to pay a small percentage to incentivize miners to add your transaction to the blockchain.
actually need these big "exchange-places" who not only takes out a charge (=makes money on your transaction) but actually becomes more and more as a regular bank.
They take a percentage because they are providing an escrow service and a service of connected buyers and sellers, and this costs money to do.
You can transfer bitcoins just fine by yourself without an exchange or bank. The reason you need an exchange is that bitcoin doesn't magically allow you to find people willing to buy or sell bitcoins at market price instantly, and bitcoin doesn't provide an escrow service (i.e. It doesn't guarantee that whoever you send bitcoins to will wire $1000 to your bank account)
If you trust the person you are sending bitcoins to (e.g. amazon, your gorcery store, your drug dealer), then you don;t need an exchange. If you know a person who will buy/sell from/to you any amount of bitcoins at market price at any time, then you don't need an exchange.
Mt. Gox is an exchange. It is only like a bank in that exchanges in general are kind of like banks. Mt. Gox is where you exchange dollars for bitcoins and bitcoins for dollars. They would coordinate buyers and sellers, provide an escrow type functionality, and take a percentage of the trade volume.
At any given time there was X dollars and Y bitcoins in the posession of Mt. Gox that belonged to traders. This is true at every exchange. One day, Mt Gox couldn't/wouldn't allow withdrawal of these X dollars and Y bitcoins. They claim it was stolen and maybe it was by Mt. Gox, who knows.
You don't need a bank for bitcoins. You do need an escrow service if you want to trade with untrusted people on the internet. You trust amazon to send you a package once you buy it form them. You might even trust ebay sellers (because of the system ebay sets up). You could also trust the guy claiming he will wire you $1000 to your bank account once you transfer a bitcoin to him. Using an exchange makes it so you don't have to trust the guy (or even find him yourself), but then you have to trust the exchange, which in the case of Mt. Gox, seems to have been a bad idea in retrospect.
Currency is a medium of exchange that *can* also be a unit of cost. If the value fluctuates wildly, then you need to use something else as a unit of cost. You can use dollars, euros, gold, beanie babies, cans of soup, etc, and just exchange the right number of bitcoins at market rates. This is how we are able to buy goods from foreign countries even though currency exchange rates are constantly fluctuating. This is also how we buy things locally given that there is constant inflation.
What you are describing is "unit of cost". Bitcoin is currently useless as a unit of cost. It is not useless as a currency. This is why black markets use it. There is nothing about black markets that make them able to use useless currency more than anyone else. They just value the anonymity of bitcoin more than the price stability of the dollar (it's ability to be used as a unit of cost). Why? Because they can just use the dollar as a unit of cost and bitcoin as a currency. They still price everything in dollars or euros, and simply perform exchanges in bitcoin at current market values. It's a lot of extra math calculations, luckily the computers do all the work (same as with traditional finance).
Even after this crash, bitcoin has only dropped in value to it's value from november 2013. Anyone who invested before then is still doing fine. Anyone who only uses bitcoin as a medium of exchange (i.e. a currency) rather than for speculation/investment is also fine.
You can use a volatile currency. Silk road had some kind of hedging system where they insulated buyers and sellers from price fluctuations. It doesn't really matter if I need to use 10 bitcoins to buy drugs today and only 1 bitcoin tomorrow, and 5 bitcoins the day after that, if I only had to pay $1000 to get that amount of bitcoins each time.
I believe the economic term is "unit of cost". You can use bitcoin as a currency without using it as a unit of cost.
This has nothing to do with the currency. Regulated currency != regulated exchanges. It has to do with the fact that the exchange was unregulated. You can just as easily have an exchange of regulated currency where the owners run away with the money, or get robbed, or both.
Gold is not regulated, but gold exchanges can still be regulated. Bitcoin exchanges could also be regulated, they just aren't right now.
most of the decisions are made by architects as oppose to developers.
This is probably a good thing. Ideally all software developers would be good software architects as well, and we could always trust them to make good high level design choices. In practice this is just not the case. My suggestion to anyone the position of wanting to make higher level design choices is to do whatever you can to get that sort of a promotion or to do what the OP is contemplating and move to a smaller company where the head (maybe only) developer (i.e. you) *is* the architect.
Lots of people are perfectly content implementing other people's designs or hunting down bugs, etc. We don't want everybody to have input into high level design. Some aren't going to be good at it. And even if everybody was good at it, having every developer writing code with their own design methodology is going to result in a big mess. Too many cooks spoil the broth. Consistency of vision is good (assuming the vision is good, if it's not you're fucked anyway).
Thanks for the link. Although that particular article seems to be trying to use the fact that bitcoin is not a commodity along with mises views on money and commodities to show that bitcoin is not real money.
I am well aware of the libertarian division on bitcoin. It's either a technological salvation, or a giant ponzi scheme depending on which libertarian you ask.
I consider myself a libertarian, although not one of the typical ones you find these days.
I wouldn't consider myself a mises proponent, although I probably agree incidentally with some of his arguments. In regards to this particular Mises quote, I am not sure there is a clear way to interpret it. I could see it to mean:
1. Lots of things including gold and bitcoin would emerge as a commodity
2. Not a lot of things emerge as a commodity (bitcoin is somehow different than gold)
3. It doesn't make sense
Not necessarily in terms of ideology, but only in terms of which libertarian economic ideas I find interesting, I would more associate with Milton Friedman, Hayek, etc. Mises just seemed like too much of an idealogue to me, and also kind of boring. That said, I am not necessarily opposed to people like Keynes or even people like Marx. I think there are probably several workable economic models ranging from very libertarian to very socialist, and it is important to recognize that parts of economic theories of various people may hold insight and be useful even if their ideas as a whole have problems (Mises included).
Unfortunately, ideological economics books are just way too boring for me to actually read, and I'd rather just have discussions with people on the subject of economics without actually having to read anything.
And that logic would be absolutely valid. A bitcoin is useful - as a currency, nothing else.
I guess we agree that bitcoin is not a commodity then :)
I would go one step further and say that while gold is technically a commodity, it's use as a commodity is almost completely overshadowed by it's use as a medium of exchange (i.e. a currency), and if we treated gold as purely a currency, we would see pretty much exactly what we see now, minus some gold plated electrical conductors.
And if I may ask, why would bitcoin being a commodity bolster anyone's ideology? What possible negative implication does the non-commodity status of bitcoin have on which ideology?
Obviously there are all kinds of crazy ideologies out there, but I am just not aware of any that need bitcoin to be more than just a (non-fiat) currency.
correction: 15625 cubic meters is how much gold is on earth (25^3) not 625 (25^2)
If it is true that something like jewelry is "useful" because there is an industry built on it, then bitcoin is the same kind of "useful" by the same logic.
I am not arguing that gold and jewelry don't serve as status symbols. I am saying that I don't consider status symbols to be useful in the same sense as things like food, water, and shelter (i.e. in the sense that we are no worse off without status symbols).
Also, I think gold's usefulness in jewelry comes mostly from the fact that it is valuable as a currency. If all of a sudden you could synthesize gold in the lab for $0.01/ton, what would change? maybe we'd see more gold coated stuff to serve as conductors for non-corrosive qualities. But I suspect the era of gold jewelry would be over, because it stops being a status symbol if everyone can get it easily. Not only that, but fake gold would no longer be produced (why would you want to fake being cheap?). All the gold bars stored in safes would be taken to the scrap yard.
There was a time when aluminum was more valuable than gold, because we did not have the technology to extract pure aluminum from bauxite. Aluminum is definitely useful, and while not cheap, is certainly much cheaper than it used to be due to it's newly acquired abundance. It is valuable because it is noncorrosive and relatively light for how strong it is. If we were to remove all but 625 cubic meters of aluminum from the earth (about how much gold there is on earth), it would surely become more expensive and we would probably store it in vaults and use it in jewelry, but I wouldn't say that aluminum would have become more useful, it probably became less useful, because now it is no longer cost effective to make aircraft from it, regardless of what price per ounce aluminum jumps to.
Obviously gold is not going to become magically abundant in the way that aluminum did. This was just hypothetical.
What is gold backed by? Is gold a fiat currency by your definition?
Yes everybody has the authority to create whatever kind of new money they want. What they don't have the authority to do is to make it valuable to people (i.e. by forcing people to accept it as payment). The creation of the money is not by fiat. The value of money through forced use is by fiat.
I agree that it doesn't ultimately matter what concept we associate with fiat. That's just semantics. The point I am trying to make is that with bitcoin the value is not by fiat. Nobody is forced to accept bitcoin as payment. People choose to accept bitcoin as payment (i.e. they choose to value it). This is in contrast to other currencies (which I and English wikipedia refer to as fiat currencies like the dollar and euro) , which have the force of law behind them.
And I would object that bitcoins are "out of nothing". They require a great expenditure of resources (i.e. electricity) to create. Dollars only require flipping a few bits in a computer to create. You can create a trillion dollars as easily as you can create 1 dollar. This is not true of bitcoin.
The "fiat" part of fiat money is referring to the fact that "someone" is simply proclaiming/decreeing the money to have value rather than it having instrinsic value or being able to be exchanged for something of intrinsic value. This "someone" needs to have the legal authority to create the fiat money in the first place (i.e. a government).
Bitcoin is not a fiat currency because it doesn't have intrinsic value. It is not a fiat currency because no authority has proclaimed "let it be done" (i.e. the "fiat" part) that this currency shall be accepted as money. People have decided to value bitcoin without any proclamation/decree from any authority. The creator of bitcoin lacks the authority to give a fiat decree. People freely and organically chose to value this new currency. This is similar to the way that people organically decided to value gold despite it's lack of utility, although gold was natural rather than being a human artifact.
This is the historical connection between the word "fiat" ("let it be done") and concepts like intrinsic value, commodity backing, and government authority, etc.
From wikipedia: Fiat money has been defined variously as: 1. any money declared by a government to be legal tender.
2. state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
3. money without intrinsic value that is used as money because of government decree.
Notice how the word government or state is mentioned in each definition.