Effectively, human work. Money is an abstraction over the relative value we assign physical goods; instead of bartering, we collectively agree on using money as an intermediate form. The financial system, then, is a lot more abstraction over the value of producers of things—and thereby human work.
Of course it's way more complex than that, but that's the basic difference between real-world money and crypto currencies.
I'm not a crypto bro by any means, but I think crypto satisfies those criteria.
If you want to know the actual answer however. The answer is debt. Or more specifically assets and liabilities on various bank ledgers. Those banks organically set the value to monetary systems. This system would fall apart without a forced taxation system for a given currency.
The actual value is debt and taxation. I'm not complaining, who am I to criticize? But that is the answer.
One could conceive of such a crypto ledger system, and that would be a CBDC.
Doesn't that come down to the same thing effectively? Debt and taxation are details of a system of trusted authorities built around the economic system of human work.
And if we consider a CBDC to still count as cryptocurrency, in my opinion we've just shifted the goal posts from a decentralised, anonymous, revolutionary, grass-roots form of digital currency to the technical underpinnings of the digitisation process of the global banking system.
The current centralization is what keeps it "stable". This stability makes the currency lose it's value in a very gradual way. Only housing, property, education, and healthcare are gaining value at a outlier rate.
Decentralization will incentivize hoarding. Why spend crypto when it might go to the moon tomorrow. Maybe that is a feature, maybe not.
Wrong. For all intent and purposes, you could switch any cryptocurrency with whatever FIAT in your sentence and it still applies. I don't hunt money and wear it as a necklace (lion teeth). I don't mine it out of a gold mine. It is given to me in exchange for work.
Given.
Exchange.
If you and I agree that we only accept little tin circles; What's the difference? When you say money, what are you referring to? Just the US bank note? Some brass coins? Any FIAT?
Today's FIAT have nothing to do with what currency, basically just a fancy IOU note, used to be.
Currency WAS representative of human work. Directly. The oldest known form are lion teeth. You had to WORK to get them. It was direct proof of work. And it was important to keep that link so no arbitrary value is taken or added to it.
The next major leap of currency was IOU notes. Notes that banks respected between each other. One bank gives you some paper that says "trust me, bro, I'm worth 2 lion teeth". You go to another bank and can exchange that paper back to 2 lion teeth.
At one point in time, the US bamboozled the entire world and declared the US dollar as some form of new gold bar (what it was previously tied to, gold; proof of work). Tying all of FIAT to it. A value that can more easily be arbitrarily changed. And, since then, propaganda reigns supreme and people like you are born. Praising a nonsensical paper as some kind immovable artefact of mankind.
Language evolved.
Law evolved.
Currency didn't evolve.
And, for some reason, you are fighting its evolution.
This is simply not correct. A fiat currency is ultimately bound to the performance of the global economy, so it sure ties into gold mines or the lion teeth gathered by hunters, I've you're so inclined to keep it savage.
The dollar is fundamentally a promise of the US government that they owe you a given amount of money. As long as the US government exists, a dollar is going to have a worth. You may debate the virtue of the US government all you want, but at the same time, there's nobody to give you any such guarantee for a Bitcoin, or an NFT. The moment the market settles for a new plaything, these binary numbers you praise will be entirely worthless. So when I say money, I'm referring to the trustworthiness of its issuer.
The only thing Crypto has brought us is a gambling system rich people use to get richer, and poor people use to loose money; lots of brainlessly burned electricity; a neat way to collect ransomware payouts; and a bunch of Ponzi schemes.
People like you like to feel smarter than anybody else, and I know you'll stay committed to cryptocurrency regardless of any reason. So I will drop out of this discussion here, as it's fruitless.
Government backing, our shared delusion, unicorn dust, take your pick: whatever it is, it's something stable enough that it doesn't experience quintuple digit deflation in a decade.
And you're comparing annualised inflation to the deflation over a decade, which is equally embarrassing. Regardless, all other things being equal anyone who has their own financial interests at heart would rather hold a currency that experienced 20,000% deflation since its creation than one that lost 99% of its value to inflation since its creation. Because the best predictor of future performance is past performance.
Did you just try to browbeat me for not breaking down the deflation over a time period... then compare 10 years of BTC movement to some arbitrary period of USD movement?
Then top it off by claiming someone would want a currency that deflates 20,000%?
no, no, I love 10% inflation, it's really good for employers, they can charge customers more because of "inflation", and they don't have to pay me any more, because their costs have gone up so much because of... "inflation".
