Now I understand your perspective better, I think I can clarify one of your earlier comments:
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> "You're right, it's ALL fiat money. All money that has ever existed was fiat money, from shells and dollars to bitcoins and xbox points. IF it doesn't have INHERENT value as food, fuel, etc, then it's a fiat currency, it has value because we declare it to be so. Cryptocoins are the ultimate fiat because they don't even really exist."
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Okay so just as oats has inherent value as food, and oil as fuel etc... gold has inherent value as money. It has properties that make it useful as money.
There are certain properties of oats which lead it have economic value.
* tasty + nutritious + etc => demand (as food)
* human effort it takes to grow => supply/scarcity
There are certain properties of gold which lead it to have economic value:
* human effort it takes to find and mine => supply/scarcity
For banks notes:
* the same (but improved) properties as gold => demand (as money)
* as much as bankers can get away with effortlessly creating (controlled by the interest rates they set) => supply/scarcity
This is how bankers decide it's value and where I think the term fiat comes from - they can control the value by creating/destroying the monetary units.
For bitcoin:
* the same (but improved) properties as large (currently) amounts of digital/paper fiat currencies => demand (as money)
* _fixed_ issuance curve => supply/scarcity
This is an an enormous difference - an asset with an absolute hard limit on issuance rate. No amount of corruption or even work can create more than is hard-coded into the algorithm. It doesn't matter how powerful you are, you cannot change the bitcoin issuance curve, and it doesn't matter how powerful you are, you can't create bitcoin with less effort than the bitcoin is worth. The world has no idea of the magnitude of what has been invented here.
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> "You're right, it's ALL fiat money. All money that has ever existed was fiat money, from shells and dollars to bitcoins and xbox points. IF it doesn't have INHERENT value as food, fuel, etc, then it's a fiat currency, it has value because we declare it to be so. Cryptocoins are the ultimate fiat because they don't even really exist."
--------
Okay so just as oats has inherent value as food, and oil as fuel etc... gold has inherent value as money. It has properties that make it useful as money.
There are certain properties of oats which lead it have economic value.
* tasty + nutritious + etc => demand (as food)
* human effort it takes to grow => supply/scarcity
There are certain properties of gold which lead it to have economic value:
* divisible + portable + fungible + recognisable + etc => demand (as money)
* human effort it takes to find and mine => supply/scarcity
For banks notes:
* the same (but improved) properties as gold => demand (as money)
* as much as bankers can get away with effortlessly creating (controlled by the interest rates they set) => supply/scarcity
This is how bankers decide it's value and where I think the term fiat comes from - they can control the value by creating/destroying the monetary units.
For bitcoin:
* the same (but improved) properties as large (currently) amounts of digital/paper fiat currencies => demand (as money)
* _fixed_ issuance curve => supply/scarcity
This is an an enormous difference - an asset with an absolute hard limit on issuance rate. No amount of corruption or even work can create more than is hard-coded into the algorithm. It doesn't matter how powerful you are, you cannot change the bitcoin issuance curve, and it doesn't matter how powerful you are, you can't create bitcoin with less effort than the bitcoin is worth. The world has no idea of the magnitude of what has been invented here.