I guess we’re doing this. For some reason, using Google doesn’t do well enough for some people, and I need to write a thing on this. Given a conversation I recently had with some folks I normally respect, it’s become clear to me that this is a matter of undue contention. And yeah, I do think the contention is undue – mad undue. The subject could be addressed with a few Google searches, but enough people in high esteem have commented on this that I now need to counter their stuff too. I’ve also been meaning to do this for awhile, but been reticent to write this kind of article before, because even though it’s about bitcoin, I didn’t think it’d do well on Steemit, and I didn’t think I could say what I wanted if I wrote for someone else’s site. But now that I have my own site?
NOBODY CAN FUCKING STOP ME! HAHAHA!!!
So let’s get into it.
God DAMN it was this article perfectly timed… I started writing this, based on a dispute I had on Twitter all morning which made this post a priority among several others I’m writing, and not a half hour later does John McAfee put out a video saying some of what my core point is. “So what’s actually happening here, people? Every so often, and very rarely, a clash of old and new cultures brought about by technology, changes civilization. Cryptocurrency is one of these technologies, and probably the most dramatic to have occurred in human history since the invention of fire. Why? Because cryptocurrencies free the individual from the yoke of currency controlled by governments.” I’d struggle to hit the nail more squarely on the head than that.
The truth, and nothing but. What, really, is behind all of this? pic.twitter.com/kbStdthi1R— John McAfee (@officialmcafee) January 22, 2019
So with that excellent premise set forth, let me go about fleshing out the purpose and direction of this article. I mean to discuss how cryptocurrency, not just BTC, is not, and can almost not be, fiat currency. I also mean to discuss why this isn’t just a semantic argument, but a necessary, substantive, and ethical one. Finally, I mean to hammer home the point that we don’t need fiat, and that cryptocurrency should hardly be seen as a step in the wrong direction. All of these things will go to form foundational planks of further writings on my site, and I’m gonna reference other articles on this site as much as possible. For revenue, yes – but also so that it becomes clear what I think and why, and that it’s not just ideas being printed out of thin air. So let’s talk about the first point.
What is fiat currency?
In order to understand what fiat currency is, it’s useful to start with definitions and etymology of the two terms. “But I thought you said this wasn’t just semantics!” It’s not. Relax. Or actually, if you’re one of the people who got lied into believing cryptos are fiat currency, I want you to get mad, the more you read this.
Anyway, currency is, put simply by the kind folks at the Online Etymology Dictionary, “that which is current as a medium of exchange, money”, and this definition arises from its root, “condition of flowing,” as a river or stream. So if you think of some asset that can and does flow through economies (or catallaxies, if you prefer, and want to confuse a Keynesian), that would be a currency.
And what is fiat? Not that shitty car made for people who don’t know how to parallel park the adult-sized ones, contrary to popular perception. I digress, however, and OED comes through again, calling it “‘authoritative sanction,’ from Latin fiat “let it be done” (used in the opening of Medieval Latin proclamations and commands)”. Examples of original fiat currencies include the jiaozi of 10th Century China’s Song Dynasty, then the 13th Century Yuan Dynasty Chao, then French Playing Cards in the 17th century (yeah, that was a thing), and then American “Notes of Credit”, and USD. Many other examples exist – just look at FOREX to get an idea of how many people copied the disastrous model.
But why am I starting with etymology, instead of just Googling it? Not only would that be boring, and too short for an article, but I’ve tried that tactic many times, only to have people return with, essentially “nuh uh”. I mean shit – google “fiat currency”, and the first thing that appears in the Year Of Our Esoteric God Emperor, Twenty-Nineteen, is a thing from Fool.com that even sides with fiat currency over a gold standard. It says, simply:
Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies. This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money.
That’s not even to scrape that Google uses Oxford Dictionaries in order to serve definitions, and the argument for BTC being fiat currency is lost when someone looks up “fiat” and finds that it is “a formal authorization or proposition; a decree”, and that a decree must be “an official order issued by a legal authority”. So put simply, fiat currency is currency generated by the order of authority. Case goddamned closed, right? The etymology, modern experts, and the literal fucking definition all disagree with this assertion, yet somehow it persists. But why?
Repeat the mantra… “Read the guy we want you to…”
“… and then come exclusively to our conclusions.” That’s what you get from people on this subject. I’m referencing an Economist article which repeats cultishly “read your Kindleberger”, who died in 2003, in order to make an assertion about a thing which didn’t come out until Sonic Unleashed was on the shelves (it’s my site, I get to use what landmarks I want). And as Immortal Technique said, “you don’t know shit about a dead man’s perspective, and talking shit’ll get ya neckbone disconnected”. So while The Economist puppeteers a corpse, to discuss something which had not existed at any point during his lifetime, let’s hear what they have to say, since adherents to this mindset throw the link at people like a free Bible next to a hotel bed with a quarter slot.
“Read your Kindleberger” is just a coded way of saying “don’t forget this has all happened before”. So to anyone invested in, mining or building applications for distributed ledger money such as bitcoin or ethereum: read your Kindleberger.
Charles P. Kindleberger wrote more than 30 books on a variety of subjects, and The Economist ejaculated to his memory in an article which called him “the master of the genre”. He worked with the Treasury, and for the Fed, among other things, and he was a key figure in the authorship of the Marshall Plan. Those things should give you pause considering his position. A man who worked for the Fed likely has a strong bias toward centrally managed currencies, and The Marshall plan was a postwar jobs program that Krugman still winks and drips over. None of this is to take away from Kindleberger’s experience, per se, but it’s worth noting that the idea of fiat currency didn’t bother him enough not to have the career path he chose, and he’d likely know a thing or two about it.
And on what did this article hinge to come to its plainly false conclusions?
Bankers talk about “governance”, ways to ensure private banks and central bankers make sound decisions—so they create just enough money make commerce easier, but not so much that the system collapses through inflation or panics. The developers behind distributed ledgers, however, often talk as if governance is something they are beyond. They are not. Computer code is just a set of rules. Code is governance. And it can change.
Herein lies the crux… a disingenuous word game. When BTC adherents claim, rightly, that their currency is separate to fiat currency, they do not also say it lacks rules. They simply say its rules were not handed down from a central, legal authority – and they both weren’t and aren’t. The devs don’t “talk as if” there are no rules, and in fact, upon launch, the enigmatic Satoshi Nakamoto was all too happy to tell people about those rules. But not all rules come by decree. The absurd equivocation and functional fixation that says anything with rules is equal to fiat is worth no more time than is the age old practice of attempting to extract blood from a stone.
Yet trust a rag owned jointly by the Agnellis and Rothschilds to attempt to quell an alternative to the prevailing global fiat paradigm by deceiving its most vocal supporters as to its nature. Trust them to posit that a dead man agrees with them, and disagrees with the prevailing wisdom he likely helped craft. Trust them to pontificate on this kind of line for an entire article, when “we fancy ourselves economist-necromancers, disingenuously puppeteering corpses to support our globalist puppetmasters”.
What I really mean is don’t trust them. Have a healthy level of skepticism for claims presented by anyone quoting someone who is no longer alive to clarify statements, and hold their statements to just the same level of scrutiny you would everyone else. Look at multiple sources, instead of being puppeteered, yourself, and realize that, just like any sort of common blogger, The Economist likely has its own set of biases to check, before coming to a conclusion that so readily happens to conform to it, and that it might take more than a thousand word and a mantra to explain it.
So why does this matter?
Fiat currency is the bloodstream of tyranny. The current of a new world order. It seeks an iron grip of sanguine-seeping control over a market, the elites leeching off that market until there’s nothing left. The Fool.com article I cited earlier puts it well… “A fiat currency’s value is underpinned by the strength of the government that issues it, not its worth in gold or silver.” Slam-dunk. So what does a country that wants to have the best-competing fiat currency do? Well, it has a ton of jobs programs disguised as patently unwinnable wars on terror, poverty, and drugs. It has bailouts for industries that rape the little guy, and yet are still “too big to fail”. It runs military, prison, and intelligence industrial complexes, and uses those to spread a global influence train, gaining footholds for its friendly-fascist imperialism everywhere it can. It turns the entire world into a tax farm for the elites, who are insulated from becoming cattle by lineage, circumstance, and the psychological maladies which lead to the inhumane, rote force necessary to maintain such an evil.
The US government’s tax farm even debases its fiat currency into a debt-based currency, promising your children as collateral on every political and economic decision they make. Have 30 minutes? Watch this. Mike’s not an anarchist, but the whole thing serves my point to some degree. And Kindleberger wouldn’t want you to, since his homies at the Fed get put on blast.
Cryptocurrency, on the other hand, is something anyone can make, and it is that nature which distances it from fiat. It doesn’t require the backing of a government, nor does a statist structure need to exist, much less be strong, for it to compete. “But its value is tied to fiat currency!” … someone screeches from a distance. Bullshit. As the Fool.com article states, again accurately, “the value of any currency, whether a commodity or a fiat currency, is only relative to what people think it’s worth.” In a paradigm free of the state, these currencies could still be used, and often, but in this one, due to repeated issuances of Quantitative Easing, it’s at this point actually counterproductive to even pick up one of the base units of the world’s reserve fucking currency.
Subjective value theory is therefore key to understanding how currencies work. Fiat currencies gain their value because people subjectively prefer one force monopoly to another, and their force monopoly applies enough of it through action, allies, or agreements, that it can destroy competing economies and stand on the rubble. Cryptocurrencies require nothing of the sort – only willing peers and interested users. They’re not only not fiat, but it’s GODDAMNED INSULTING to insinuate otherwise. Doubly so when the people insisting otherwise maintain the sheer arrogance to dig up the twelve year grave of a dead man in order to write a tagline like “What Charles Kindleberger has to say about cryptocurrencies”.
I may not agree with Marx on much, but this much can be certain… he accurately sliced this rag, calling them the “European organ” of “the aristocracy of finance”. The Economist makes multiple hundreds of millions of dollars a year to push the status quo, in order to support the old guard of economic order, and preserve their inheritance of the keys to the kingdom, so why would this rag not also try to discredit cryptocurrencies by attempting to align them with many of the evils from which their strongest adherents attempt to distance themselves? If you get enough people believing it, and all it took was an article half the length of the one you, dear reader, are reading now, replete with appeals to the same authorities responsible for the very crafting of their preferred economic model, so as to get loyalists to their system from people who blindly convert, why would they not do just that? It’s evil, and manipulative, but so are they, so fuck it, right? Might as well get a ton of people to blindly call other people what they see as evil – the Agnelli and Rothschild families might lose their no-too-meek control of the economy, otherwise. We can’t have that.
Bitcoin is not fiat currency. If it is, the conspiracy is deeper than The Economist normally dares to swim, as were it literally issued by a legal authority, and not released onto an open market by a bunch of Magic the Gathering nerds, then entire movements are being controlled from the shadows. However, since that is heretofore unproven, I’ll leave it to a Tom Clancy clone to write that fiction, and ignore it when some hack writer attempts to posit this notion, no matter how many times they say…
“Read your Kindleberger”…
“Read your Kindleberger”…
“Read your Kindleberger”…
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