[Ads-l] toward a hierarchy of currencies

Barretts Mail mail.barretts at GMAIL.COM
Sat Jul 8 17:07:13 EDT 2017


I didn’t read through the list but did know it’s legal in Japan.

Are you saying then that recognition not issuance is what should determine whether a currency is fiat? 

BB

> On 8 Jul 2017, at 13:46, Dan Goncharoff <thegonch at GMAIL.COM> wrote:
> 
> Quickly scanning the article, I only see one country that has declared
> Bitcoin legal tender -- Japan. As I understand it, that makes it fiat money
> in Japan.
> 
> On Jul 8, 2017 4:09 PM, "Barretts Mail" <mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>> wrote:
> 
> So how about the case in the Wikipedia article (https://en.wikipedia.org/ <https://en.wikipedia.org/>
> wiki/Legality_of_bitcoin_by_country_or_territory <https://en.wikipedia.org/ <https://en.wikipedia.org/>
> wiki/Legality_of_bitcoin_by_country_or_territory>) where governments accept
> bitcoin as legal tender but do not issue it? BB
> 
>> On 8 Jul 2017, at 13:04, Dan Goncharoff <thegonch at GMAIL.COM <mailto:thegonch at GMAIL.COM>> wrote:
>> 
>> I think government issuance is the important distinction. The 'fiat' in
>> fiat currency refers to the government accepting it as legal tender. Other
>> entities can proclaim something (eg, Bitcoin) as accepted for
> transactions,
>> but that doesn't make it fiat currency. As mentioned, Bitcoin is property,
>> so selling something for Bitcoin is not a sale for tax purposes, but an
>> exchange of property.
>> 
>> On Jul 8, 2017 3:16 PM, "Barretts Mail" <mail.barretts at gmail.com <mailto:mail.barretts at gmail.com> <mailto:
> mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>>> wrote:
>> 
>>> I think you’re being facetious, but bitcoins do not work like that.
>>> 
>>> Coin issuance differs depending on the cryptocurrency, but mainly, like
>>> bitcoin, are issued through a mining process.
>>> 
>>> In the mining process, a computer is presented with a mathematical
>>> problem. When it solves the problem, it is rewarded with a coin (or some
>>> amount). The restricting factors making the mined coins valuable are the
>>> cost of electricity and the efficiency of the computer. For bitcoin and
>>> perhaps all coins, mining is now performed by entities that use dedicated
>>> mining devices operated in locations with low power costs, making it
>>> financially disadvantageous for the average person to mine coins.
>>> 
>>> With bitcoin, the mathematical problems become more difficult over time,
>>> making the price to mine them higher, which drives up the value/cost.
>>> 
>>> Also, bitcoin is set up with an issuance cap, so that once the final one
>>> has been issued, none will ever be issued again. I think there are coins
>>> that do not have a cap and can be issued like the wizard’s imposter, but
>>> such systems are not as attractive to investors and are not as likely to
>>> succeed.
>>> 
>>> That being said, fiat currency (https://en.wikipedia.org/wiki/Fiat_money <https://en.wikipedia.org/wiki/Fiat_money>
> <
>>> https://en.wikipedia.org/wiki/Fiat_money <https://en.wikipedia.org/wiki/Fiat_money> <https://en.wikipedia.org/ <https://en.wikipedia.org/>
> wiki/Fiat_money>>), at least according to
>>> Wikipedia, is one that is established as money by government regulation.
>>> Since bitcoin is indeed recognized as legal tender by some governments (
>>> https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory>
> <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory>>
>>> <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_ <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_>
> country_or_territory <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_ <https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_>
> country_or_territory>>),
>>> it is indeed fiat currency according to this definition. FWIW, the IRS
>>> considers cryptocurrencies to be property.
>>> 
>>> BB
>>> 
>>>> On 8 Jul 2017, at 12:05, George Thompson <george.thompson at NYU.EDU <mailto:george.thompson at NYU.EDU>
> <mailto:george.thompson at NYU.EDU <mailto:george.thompson at NYU.EDU>>>
>>> wrote:
>>>> 
>>>> Why isn't the bitcoin a fiat currency?  An illegitimate son of the
> Wizard
>>>> of Oz sits behind a curtain and releases some more, as he sees a need
> for
>>>> more.  They are said to be valuable.  Therefore they are valuable.
>>>> Whereas Confederate currency is still valuable, just not in the way the
>>>> Jeff Davis had in mind.
>>>> 
>>>> GAT
>>>> 
>>>> On Sat, Jul 8, 2017 at 2:40 PM, Barretts Mail <mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>
> <mailto:mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>>
>>> <mailto:mail.barretts at gmail.com <mailto:mail.barretts at gmail.com> <mailto:mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>>>>
>>>> wrote:
>>>> 
>>>>> Good point, and one that is close to the problem of bitcoin being a
>>>>> “digital currency” even though it can be withdrawn from ATMs.
>>>>> 
>>>>> My assumption is that fiat currencies exist in physical form even if
>>> they
>>>>> are frequently transacted digitally. So if you spend $50 with a debit
>>> card,
>>>>> that $50 physically exists at the bank or a government institution.
>>>>> 
>>>>> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue> <
> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue>> <
>>> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue> <
> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue>>> <
>>>>> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue> <
> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue>> <
>>> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue> <
> https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue <https://en.wikipedia.org/wiki/United_States_dollar#Means_of_issue>>>> says:
>>>>> "The monetary base consists of coins and Federal Reserve Notes in
>>>>> circulation outside the Federal Reserve Banks and the U.S. Treasury,
>>> plus
>>>>> deposits held by depository institutions at Federal Reserve Banks.”
>>>>> 
>>>>> In contrast, the basis or at least the primary basis of a digital
>>> currency
>>>>> is in digital form.
>>>>> 
>>>>> BB
>>>>> 
>>>>>> On 8 Jul 2017, at 10:52, Dan Goncharoff <thegonch at GMAIL.COM <mailto:thegonch at GMAIL.COM> <mailto:
> thegonch at GMAIL.COM <mailto:thegonch at GMAIL.COM>>> wrote:
>>>>>> 
>>>>>> Since most USD exist digitally, how do you differentiate between 2b
> and
>>>>> 3?
>>>>>> 
>>>>>> On Jul 8, 2017 1:26 PM, "Barretts Mail" <mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>
> <mailto:mail.barretts at gmail.com <mailto:mail.barretts at gmail.com>>>
>>> wrote:
>>>>>> 
>>>>>>> Twice recently, I have implied that bitcoin is an alt coin (“cold -
>>>>>>> inactive, offline” on 28 May and “(cryptocurrency) wallets” on 29
>>> May).
>>>>> It
>>>>>>> may be that the term is sometimes used that way, but that does not
>>> seem
>>>>>>> standard.
>>>>>>> 
>>>>>>> Here is a tentative hierarchy of currencies:
>>>>>>> 
>>>>>>> 1. currency
>>>>>>> 
>>>>>>> 2a. fiat currency such as the US dollar, RMB and euro
>>>>>>> 2b: alternative/private currency (https://en.wikipedia.org/ <https://en.wikipedia.org/> <
> https://en.wikipedia.org/ <https://en.wikipedia.org/>>
>>>>>>> wiki/Alternative_currency <https://en.wikipedia.org/ <https://en.wikipedia.org/> <
> https://en.wikipedia.org/ <https://en.wikipedia.org/>>
>>>>>>> wiki/Alternative_currency>) - any currency used as an alternative to
>>> the
>>>>>>> official one. If a state goes rogue and starts printing their own
>>>>> currency,
>>>>>>> that would also qualify.
>>>>>>> 
>>>>>>> 3 (from 2b): digital currency, digital money, electronic money (
>>>>>>> https://en.wikipedia.org/wiki/Digital_currency <https://en.wikipedia.org/wiki/Digital_currency> <
> https://en.wikipedia.org/wiki/Digital_currency <https://en.wikipedia.org/wiki/Digital_currency>> <
>>>>> https://en.wikipedia.org/ <https://en.wikipedia.org/> <https://en.wikipedia.org/ <https://en.wikipedia.org/>>
>>>>>>> wiki/Digital_currency>) - a currency whose basis resides in computers
>>>>>>> 
>>>>>>> 4. virtual currency (https://en.wikipedia.org/wiki/Virtual_currency <https://en.wikipedia.org/wiki/Virtual_currency> <
> https://en.wikipedia.org/wiki/Virtual_currency <https://en.wikipedia.org/wiki/Virtual_currency>> <
>>>>>>> https://en.wikipedia.org/wiki/Virtual_currency <https://en.wikipedia.org/wiki/Virtual_currency> <
> https://en.wikipedia.org/wiki/Virtual_currency <https://en.wikipedia.org/wiki/Virtual_currency>>>) - a currency used
>>> in a
>>>>>>> virtual community.
>>>>>>> 
>>>>>>> 5. cryptocurrency (https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency> <
> https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency>> <
>>>>>>> https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency> <
> https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency>>>) - a currency exchanged
>>>>>>> using cryptography for security
>>>>>>> 
>>>>>>> 5a. bitcoin
>>>>>>> 5b. alt coin (derived from “bitcoin alternative according to
>>>>>>> https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency> <
> https://en.wikipedia.org/wiki/Cryptocurrency <https://en.wikipedia.org/wiki/Cryptocurrency>> <
>>> https://en.wikipedia.org/ <https://en.wikipedia.org/> <https://en.wikipedia.org/ <https://en.wikipedia.org/>>
>>>>>>> wiki/Cryptocurrency>) - in turn comprising shitcoins and perhaps
>>> another
>>>>>>> category of less-risky alt coins such as ethereum and litecoin
>>>>>>> 
>>>>>>> It should be noted that since there are bitcoin ATMs in Europe and
> the
>>>>> US
>>>>>>> (at least), the bitcoin is not truly a virtual currency.
>>>>>>> 
>>>>>>> I’m still new to the cryptoworld and am sure further refinements are
>>>>>>> required.
>>>>>>> 
>>>>>>> Benjamin Barrett
>>>>>>> Formerly of Seattle, WA
>>>>>>> ------------------------------------------------------------
>>>>>>> The American Dialect Society - http://www.americandialect.org <http://www.americandialect.org/> <
> http://www.americandialect.org/ <http://www.americandialect.org/>>
>>>>>>> 
>>>>>> 
>>>>>> ------------------------------------------------------------
>>>>>> The American Dialect Society - http://www.americandialect.org <http://www.americandialect.org/> <
> http://www.americandialect.org/ <http://www.americandialect.org/>>
>>>>> 
>>>>> 
>>>>> ------------------------------------------------------------
>>>>> The American Dialect Society - http://www.americandialect.org <http://www.americandialect.org/> <
> http://www.americandialect.org/> <
>>> http://www.americandialect.org/>
>>>>> 
>>>> 
>>>> 
>>>> 
>>>> --
>>>> George A. Thompson
>>>> The Guy Who Still Looks Stuff Up in Books.
>>>> Author of A Documentary History of "The African Theatre", Northwestern
>>>> Univ. Pr., 1998.
>>>> 
>>>> But when aroused at the Trump of Doom / Ye shall start, bold kings, from
>>>> your lowly tomb. . .
>>>> L. H. Sigourney, "Burial of Mazeen", Poems.  Boston, 1827, p. 112
>>>> 
>>>> The Trump of Doom -- affectionately (of course) also known as The
>>> Dunghill
>>>> Toadstool.  (Here's a picture of one.)
>>>> http://www.parliament.uk/worksofart/artwork/james- <http://www.parliament.uk/worksofart/artwork/james-> <
> http://www.parliament.uk/worksofart/artwork/james- <http://www.parliament.uk/worksofart/artwork/james->>
>>> gillray/an-excrescence---a-fungus-alias-a-toadstool-upon-a-dunghill/3851
> <
>>> http://www.parliament.uk/worksofart/artwork/james- <http://www.parliament.uk/worksofart/artwork/james-> <
> http://www.parliament.uk/worksofart/artwork/james- <http://www.parliament.uk/worksofart/artwork/james->>
>>> gillray/an-excrescence---a-fungus-alias-a-toadstool-upon-a-dunghill/3851>
>>>> 
>>>> ------------------------------------------------------------
>>>> The American Dialect Society - http://www.americandialect.org <http://www.americandialect.org/> <
> http://www.americandialect.org/ <http://www.americandialect.org/>> <
>>> http://www.americandialect.org/ <http://www.americandialect.org/> <http://www.americandialect.org/ <http://www.americandialect.org/>>>
>>> 
>>> ------------------------------------------------------------
>>> The American Dialect Society - http://www.americandialect.org <http://www.americandialect.org/> <
> http://www.americandialect.org/ <http://www.americandialect.org/>>
>>> 
>> 
>> ------------------------------------------------------------
>> The American Dialect Society - http://www.americandialect.org <
> http://www.americandialect.org/>
> 
> ------------------------------------------------------------
> The American Dialect Society - http://www.americandialect.org
> 
> ------------------------------------------------------------
> The American Dialect Society - http://www.americandialect.org


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