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Old 4th January 2018, 01:55 AM   #1390
psionl0
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Originally Posted by Tippit View Post
It's not true that debts have to be "backed" by an asset. see unsecured versus secured loans.
I would have thought that "just the word of the borrower" covered that.

Originally Posted by Tippit View Post
Fiat currency is not debt, nor is it always conjured ex nihilo in exchange for debt. It could theoretically be created for any reason what-so-ever, or in exchange for anything (not just government bonds).
I was trying to avoid the complication of central banks and bonds and keep to the bottom line. When you issue a note you are normally promising to redeem it for something of value. In the case of government, the "thing of value" is your tax liability.

Originally Posted by Tippit View Post
The energy isn't irrelevant to the value, because it represents that which was expended in the proof of work according to the difficulty in order to create scarcity and thus, an important aspect of bitcoin's value. While bitcoin is speculative, the proof-of-work offers the bitcoin speculator a limited guarantee that the supply of the underlying won't be counterfeited or duplicated, unlike fiat currencies.
The energy required to mine bitcoins depends on the value of bitcoin - not the other way around. Yes, "proof of work" is your guarantee that the block (in the blockchain) that has your transaction is not bogus.

Originally Posted by Tippit View Post
It could happen if some kind of tail risk manifests itself, such as quantum computers rendering elliptic curve crypto useless, etc... but it seems unlikely for the intermediate term, and there are even fail safe measures in the bitcoin protocol to completely swap out the underlying crypto, as i understand.
Like I said, bitcoin holders are not going to spontaneously lose confidence in bitcoin absent some extraordinary event such as you describe.
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"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975
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