bitcoin is fiat. Now go ahead and take the time you need to get it out of your system. Breathe deeply. Is your blood pressure still high? Okay, so let's try this.
What does fiat mean? An arbitrary order or decree. Fiat currencies receive value thanks to the authority of governments. They have value because the State decides that they have value and will accept them as payment for taxes. So what is fiat bitcoin like?
A king renounces his hand and grants a trust value. But there is no king of bitcoin. Good? Mistaken. It's us.
We collectively give value to bitcoin through our decision to use it. Us bring it into existence through our collective arbitrary decision. Despite all the memes and descriptions of bitcoin as digital gold, it is in no way a commodity. bitcoin has no distinct use value or exchange value. It is not a physical raw material that can be converted into something else. It is a database that resides on your computer. And mine. And everyone else's.
First of all, the only reason bitcoin is a singular and coherent thing is because
of all arbitrary decision to use the same rules to validate changes to your database. Without that, bitcoin would be nothing more than countless copies of conflicting databases in different states around the world. There would be no bitcoin and therefore it could not have any value.
Its use value is its exchange value. They are two sides of the same coin, created only through a collective decree.
bitcoin could be hard money, its supply could be finite, it could be all of these things with the potential to change economic incentives globally. But he is also a fiduciary. Every property you have, everything you are, exists simply because of our collective and arbitrary decision to make it exist.
bitcoin is the world's first stateless fiat.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of btc Inc or bitcoin Magazine.
