Bitcoin is fiat. Now go ahead, take the time you need to get it out of your system. Take a deep breath. Is your blood pressure still high? Okay, let’s try this again.
What does Fiat mean? arbitrary order or decreeFiat currencies are given value by the authority of governments. They have value because the state decides they have value, and will accept them in payment of taxes. So how is Bitcoin fiat?
A king waives his hand and gives the legal value. But Bitcoin has no king. Correct? Wrong. This is us.
We collectively give value to Bitcoin through our decision to use it. We bring it into existence Through our collective arbitrary decision. Despite all the memes and descriptions of Bitcoin as digital gold, it is by no means a commodity. Bitcoin has no distinct use-value and exchange-value. It is not a physical raw material that can be transformed into something else. It is a database that exists on your computer. And mine. And everyone else’s.
This is the only reason Bitcoin became a coherent singular thing in the first place.
everyone’s Arbitrary decision to use the same rules to validate changes to your database. Without it, Bitcoin would simply be countless copies of conflicting databases in different states around the world. Bitcoin would not exist, and therefore could have no value.
its use value Is Its exchange value. They are two sides of the same coin, brought into existence purely through a collective command.
Bitcoin could be hard money, it could have a limited supply, it could be all of these things with the potential to change economic incentives on a global scale. But it’s also Fiat. Each of its properties, whatever it is, exists solely because of our collective and arbitrary decision.
Bitcoin is the world’s first stateless fiat.
This article is a TakeThe opinions expressed are solely those of the author and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
