Great post ..Governments will be forced to create their own cryptocurrency, thus keeping both sovereign monetary policy and the ability to tax all transactions. This is already starting in Russia and Singapore.

The alternative is to watch industry slowly defect to the faster alternative of public crypto and not be able to do anything to stop it. Companies can simply pay employees in crypto. Governments have to capture industry early before that happens.

There is still a long way to go though, as evidenced by the vlog earlier in the week. There is no chance of people switching to an alternative monetary value right now while it has the potential to halve its value in a matter of days.

On the whole people want more gradual stability from earnings, they are seeing crypto more as high risk investments rather than a currency.

Amazing dear.Thanks for sharing it

ecellant writing @exyle thank you for shareing life times
🙂🙂 keep it up friend

                             RESTEEM DONE !!!

Great and informative post for all steemians. Thanx for sharing precious blog.

Good work @exyle.

 Resteemed!

I agree with you

nive explanation in "neintjestaal" I think i gonne use that in the future... if I want to explain someone.. but now i don't and let them think the bank way is the normal way.. a lot of wasted energy to explain to some people.. they only see the negative side of crypto

> they only see the negative side of crypto

This has gotten to me too in the past. Now I just let it slide and that works for me. I know when someone is genuinely interested.

http://media.tenor.com/images/bdef202083a3ce84789c714f4910733e/tenor.gif

just a perfect...

Nice information, thanks for it. This cyrptocurrency is little bit complicated for me. It is more clear now!

Another nice write-up. Keep it up.

Hello @exyle, Do you know what the interesting part from this blog is; we (actually) all know; but when you write it like this, it let us think about it. And then; indeed its actually funny and strange,.... But so far there is not that much different to choose,... Or we have to make much fiat through the crypto's. And that is what we are working on, and especially on this blockchain.

The problem is that the banks have control of the fiat currency and with that they control EVERYTHING, they won't release control very easily

XRP is their first attempt at keeping control, XRP is not decentralized and is made by banks for banks, they even keep a % of XRP so they can sell in the future when the price rises

Good work @exyle. Nice information, thanks for it. This cyrptocurrency is little bit complicated for me. It is more clear now!Amazing dear.Thanks for sharing it

Hello @exyle
Its nice working on #fiat and agreed with your wonderful stuff.

[IMAGE: https://steemitimages.com/DQmXDCaumpPtVSuQ3Co5MciZdeaTLy7vsvpmYAQpTw5fJ1R/Dollarphotoclub_50236259.jpg]

Now cryptocurrency misc coins very up & down.
All the best and keep it steeming

Haha I like the way you explain this! Awesome. The world it utterly mad when you take a second to stop and think about it.

Wonderful Lifestyle

@exyle yeh, this is right.

Nicely explained i think everyone should look into this video to get the idea something really new they will learn resteemed

very informative post for steemains thanks for share.😊😊

whao. such a great explanation. i can't believe i never knew this. so it's all speculation. nice. but what about in proof of stake? I mean is there any 'work' done?

A lot of people don't even question the existing monetary system which totally blows me away. A debt based system means that somebody will be worse off since wealth transfer goes directly to those who already have capital without doing any work. Besides, debt based system means we will always need more and more money to finance capital, leading to inflation. The current system has so much limitation, in my opinion.

People have been fed the dogs so long they know nothing else. I much prefer crypto too

You and me both, man!

Good work thank you for share

nice explanation indeed, Fiat money can be printed by authorities and there is no limitation, so the value will go down in time (inflation). But in cryptocurrencies there is an limit that we can create so the value will always go high depending on the demand.
thanks @exyle
Cheers!

the world is here :) thanks for the nice post sir

According to my experience, people tend to avoid big changes and stick with what they already know even if they are not satisfied (it begins with jobs, relations and goes to social system government,...).
All depends on the next generation which system do they choose.
It seems like globalization and digitization is unstoppable and maybe blockchian technology will become a big part of the future.

Exactly , You said it correctly. Future is all about crypto. Even some Banks have started their own altcoins. People are getting more into crypto day by day.

You are lucky that you have relatives who understand this thing. It is hard to explain it to someone who is not seeing how cryptocurrencies will be better than fiat with their banks and loans. I like to think that I invested early although I just started investing 2 months ago. Great future ahead.

I didnt have any idea about where this money is coming from. Thanks a lot for explaining that. An please if you can tell that, what are the best tags for new steemian to start with?

Great explaination @exyle ..I strongly believe that the age for trading value through fiat currencies is almost over, next generation must and will be based on blockchains and crytocurrencies. Tokens issued from the blockchains deemed as currency of value will certainly replace fiat currency.

@exyle yeh, this is right. in this sense, we can rid off from interest rate which is ruining the life of people and creating different classes.and creating a big gap between rich and poor.

nice video as usual mate,

Informative post.Thanks for sharing with us

Everyone I tell Steemit about asks me this question! Thanks for giving this simple explanation. I will be sharing this link.

Cryptocurrencies and their technology are definitely a good and probably the best solution to a lot of our problems.
This just translate one the many problems of fiat money

It's definitely great to keep your funds in crypto.
But it's also not bad to have part of the funds in fiat or real estate to feel safe. No one knows what is going to happen :d

Thank you for informing us about this =)

I think Crypto currencies is best.
Thanks for sharing @exyle

Great post, I was thinking of the same thing as to how cryptocurrencies are created. But the truth is we still need fiat money around because some persons are still oblivious of the crypto world.

Both can be used in this world. That's what I do at the moment.

This is my 2nd week on steemit.I did not have any idea about most of the terms here.After reading this I learnt some things about fiat and cryptos.Thank you
-cheers-

you are welcome.

Wow. Great explanation. Cryptocurrency is the future.

This is a great explanation! Thank You @exyle for taking it down to the simple, now maybe all the folks on fb will be able to understand ;-)

great info.

Cryptocurrency is our future..thanks for post.

Great post and explanation. Debt that is created can never be paid back, for example the debt that US government have. The fiat currencies are based only on trust. Since former US President Richard Nixon removed the "gold standard", US Dollar does not have any value, specially after all this printed money.

Yes @bloomberg215, You do get "IT"........Constant Debt to pay back the Debt that can NEVER be Paid Back......

Wake Up Sheeple!!! haha

you have greatly explain how the money come and how it make the earning and this is improvement in my knowledge @exyle

I'd like to disagree about how money is created and what it represents. You're right that when a loan is made more money is artificially entered into circulation. You say that it isn't normal. However, if you read any history you'll see in sources like Roman history that loans were made regularly and it wasn't a new concept for the concepts so loans existed for quite a long time. A loan is basically a replication of existing money with the idea of the creation of new value. The problem with a deflationary currency like Bitcoin is that as new value is created (i.e. work, products, people, technologies, etc.) more money is necessary to exist in circulation in order to avoid deflation. If new money didn't enter USD people would just "HODL" their dollars and wait for their money to go up. However, when the economy is not doing well, in order to encourage investment and spending, it's better to spend your money now and obtain things and make investments to avoid being hit by inflation and lose money. One of the ways governments do this is by increasing interest rates so that it becomes expensive to take out loans and makes people want to keep their money in the bank.

As for alternatives to fiat money. There have always been alternatives such as owning property, or gold. Your argument is basically leading to the idea that Bitcoin is the new gold. However, the problem with that logic takes away from the technology aspect of Blockchain, of which money is only one application. I agree that Bitcoin money is a positive development and gives people a quick escape from the nasty manipulations of government. But I recommend people to be realistic about their investments. Avoid the hype and emotion whenever you can. Don't believe everything you read, inform yourself.

AHHHHHHH! Relief. Finally somebody who understands how economics work and is brave enough to risk the flames by challenging incorrect statements. I'm new to the community and I too am excited about the exchange rates on crypto, but I've been growing steadily disheartened at how many people are upvoting, praising, and evangelizing false postulates.

Banks do not print money, nor do they generally borrow from the Fed. Remember the good ol' Savings and Loan from "It's a Wonderful Life"? Just because big capital easily crushes the individual, leading people to form a resistance against the machine mentality, doesn't mean there is some conspiracy.

Thanks for the positive post! I'm also relatively new to crypto and especially so to Steemit. But I'm fascinated by cripto and try to educate myself as much as possible. Yes. Banks do not print money. The money is printed by different agencies in different countries. In the US it's the Bureau of Engraving and Printing which prints on behalf of the Federal Reserve. I visited their museum in Washington DC some years back. In Canada, it's the Royal Canadian Mint which prints on behalf of the Bank of Canada.

Really great info thanks

Cryptocurrencies- Funded by hard working people!
Stock market- Funded by printing money!

People should realize that banks are laughing at them when they file loans resulting in debts over time when all they did was to print colors in a piece of paper called "money", spread the idea "it's the only way to live" and later on get that something you bought out of your own effort and blood called "work".

Very informative thanks for this

Cool

Upvote the post
https://steemit.com/news/@aligotze37/a-woman-gives-birth-ten-days-after-her-death

@steemflagrewards

Geweldig @exyle heel mooi uitgelegd ik zal jou uitleg zeker gaan gebruiken... keep it up UPVOTED RESTEEMED[IMAGE: https://steemitimages.com/DQmeSs5L9hP6XKDNnabCFGQpmaRbCYPnfwVXvfuUjXxX2uD/IMG_5312.PNG]

great post mate!

Wow excellent video my friend and honestly i don't about the facts which you describe in your videos and i always have this question in my mind that where does the money comes from and friend you clear my mind and now i understand the whole system throughly and i also prefer cryptos because crypto currencies give us freedom and crypto help us to get out of those shit banks and now we can use our money with freedom and also their is no third party involved in it, i am sure cryptos and especially steem has bright future ahead, thanks for clearing my mind friend, Stay blessed

Creation of steem is kind of good work (content creation) done .
But I'm totally against the work done to create bitcoin. Its creation is total wastage of nature and natural resources. The work done in bitcoin creation leads to no productive creation for the benefit of humanity or the planet earth. Rest part I'm with you. Love.

Wow very nice

Good point

You are absolutely right in your judgment about the Fiat and the Crypto-currency, all that was previously done in the turnover of fiat money was a game in one gate and the winner in this game was in any case the banks and financial structures that were engaged in the turnover of Fiat. I agree with you about crypto-currencies, everything is different, here everyone can lead a turn and be a member of the blockchain! Thank you Mark and keep us informed of what's happening!

I agree with most of your points, but there is one thing I have to question. When the bank gives a loan, they basically say that you now have more money than you had before, while they at the same time have not lost money, so as long as the loan is not repaid, more money is basically around in the system. I think we both agree to this point. However, the moment the house buyer is not able to pay back the loan and the bank takes the house, the bank realizes that the money it has pretended to have, is now gone and instead it now owns a house. In that sense, they have actually paid for the house and not only gotten it by creating a loan with no work (unless the person who sold the customer the house uses the same bank...).

Thanks for the explanation, now i understand the difference between FIAT and Crypto

The fact that everybody thinks that a society based on debt is normal is the main reason why the average Joe thinks it’s a scam when speaking about cryptocurrencies. Nobody yet understand the crypto revolution because they don’t understand how fiat money work in the first place.

It's not that debt is normal or abnormal. Debt is a way of creating more liquidity on the market. Debt is ancient. The curious thing is the huge amount of debt that exists nowadays. Of course it's unsustainable and is back by promise of governments. It's money that doesn't really exist. It's sort of like margin trading. Banks lend money they don't really have and are allowed to do so to an unbelievable extent. And this reduces the value of the money we have.

That's a good break down but I think the big test is going to be how the cryptos hold value in a down economy. We haven't had one here in America in a very long time so I think we're going to go through a learning process as to the defining of what establishes value.

You nailed it on the head man ! The more I learn and understand every day about fiat vs crypto , the more I justify the unjustified-banking dislike by many people before .. thanx for your simple and clear explanation. Yes, repeat this post now and then so new comers get enlighted .
Cheers 🥂
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Russian point of view:
the state central banks create a fiat money. The cryptos is created automatically without the decision of officials about the issue. And Fiat and crypt are not provided with anything, and their price is the ratio of supply and demand

Thank you for this video @exyle
This is has been a major issue in my mind the whole time. We had a long chat about it in our DTube discord yesterday and my thoughts were along what you said here.

Thanks.

That example helped me to learn more thanks man for sharing this useful topics and content daily you post

Good vid thankx for posting.

@exyle
Mark what a SIMPLE but fabulous way you described our current FIAT System so that many may OPEN Their EYES and see the Cruel Deception in Life that the BANKSTERS Thwart onto the People...........I am so Grateful for being here early with the Crypto's.

You made great info thanks a lot man good job 👍

One thing I could not understand is that how can you say that the money given by bank has no value, someone has earned it and deposited in the bank. Bank is not free to print whatever it wants.

No, most of the money disbursed by the bank is actually borrowed from the federal reserve. The Federal reserve in turn charges what is now a 1.5% interest. Since 2008 this interest rate has been historically low between 0-0.5%. Hence the banks and corporations have been borrowing money almost for no cost and pumping it into the wall street leading to the current high stock valuations. Bitcoin and crypto valuations are also a part of the same cash excess which has been created by almost free lending for the last decade

I don't disagree with all of the pro/con arguments made regarding crypto-currency. I am, however extremely apprehensive of a bipolar society so I upvoted you for retaining sensibility about the way money systems work.

We mustn't forget that the government isn't a nameless machine....they are people from our society who were voted into power and used their station to create protective safety nets around themselves (padded with lots of money). This is true of the banks. It's true of the corporations. It's true of pharma. It's true of agriculture. Hell...it's even true on this site where there is so much heat around the early adopters (and bot writers and whale-makers and algorithm-gamers) who have hit huge reputation and can maintain their separation with promotion/6 day upvoting campaigns/other-bury-the-little-guy techniques.

We can't keep blaming the currency and decide to just make our own every time there becomes an imbalance of power. There must be a stable global reserve currency so that currency exchanges continue to feel they have a safe escape route, and we can all smartly hedge bets and earn through rate differences.

To add to the insanity of it all is when banks write down losses and about to go belly up the government will voluntarily come up and save them because, without the largest banks in the country being solvent the whole system will malfunction. Is that not the point of capitalism. Where only the best survive? Why then when banks made terrible mistakes they get saved when the average citizen gets punishment.

I feel I have no power to change any of that therefore I follow suit like most other people and use one of the major banks to store my liquidity. I hope before I leave my assets to my children that by then crypto will be the norm and no more major banks. Thanks.

Thank you very much, my friend, I always wondered.
I knew the crypto money would go out from underground :))

Nice work, Exyle! I have tried to explain this to SO many friends and family (the worst and most misunderstanding!!!). You nailed it. You’re the fresh Andreas Antonopolous. Hope you don’t mind the analogy.

Interesting blog Bro, but I believe your argument cuts some corners. A few questions to take into consideration:

1. If banks can create money, how is it possible that they can also go bankrupt?
2. Why do banks have treasury departments?
3. What is the difference between commercial banks and central banks?
4. Central banks can create money. Why are these central banks independent of governments? What is the goal of these central banks with creating money and why?

Looking forward to our discussion!

Last remark. Two things are certain in life: death and taxes. The government should use taxes to add value to society (infrastructure, education, security, etc...). Taxes are still paid in fiat currencies. Everyone should pay its fair share. Currently the government has more or less control over this system. I think that is a good thing. Like to hear your view.

Would be nice to talk about with you bro. Let's go for a bite to eat next week.

Today's vlog was amazing wonderful things you shared and a great topic to learn something how it generates and come in from thanks for sharing buddy

I like the way you explain this. It is simplified and easy to understand.
> with blockchain and cryptocurrencies, there is a good alternative for the first time in history

I couldn't agree more. We live in exciting times.

Yes exciting times!

Looks like crypto is our lady golden duck that poop with golden eggs.
Maybe my wish to buy a Lambo will come true soon :(

Hmm never thought of it like that but its absolutly true. That's why all the bankers are so afraid that crypto is cathing on because then we wont need them.

The debt in fiat is designed to make banks a lot of money of people's hard work. If you take a loan for, let's say 30 years, you will spend months of your life working for the bank basically.

@exyle,
You explained it very well. Now I got a clear picture how Fiat makes it money. Yeah crypto is the best.

Cheers~

Thank you for this post, I had the same question in my mind, where does the value come from? The points I took away that I will use when I explain to friends and family from this are:
- STEEM value is created based on mind power, intellectual work and time spent on curating content, this is much like a loan created out of thin air by a bank who values your future earning potential
- fiat currency is not back by gold anymore (for the most part) so the value assigned to it is based on general acceptance by all that it has value
- unlike a loan - there is no added interest on top of your commitment to slave away for the rest of your life to pay
- the value is endorsed, legitimized, by peer to peer acknowledgment
- STEEM = mind gold :)

I am new to this, but I will place some of my time and energy towards this notion, its worth a try as it may be truly transformational to humanity over time.

Nicely explained in so easy word's you explained so great to learn about how it works all thanks for explaining it

Kudos on the works to break it down, im sharing it over all with friends and family and my social media's.

Thank u!

if i got only one currency to choose that would be crypto forever for sure anyways that was a great video :D

Thanks for this. I'm ever becoming less confused about this whole thing. There seems to be so much to learn.

this is a sane and clear analysis.

Banks are really going to have tough time with the introduction of smart contracts and more ;)

.

interesting information thanks

am very glad with what the emergence of cryptocurrencies has achieved, by creating the gap between the rich and the poor giving everyone a relatively fair chance in life, and @exyle lovely analysis there thumbs up followed ya and resteemed.

It's funny that you can have fiat money, value coming from counterfit proof paper compared to crypto which is much harder to forge and has real cost to produce. Which one would you call a fraud?

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Now i know why everyone would love crypto in future too its going to get more mainstream

Gold and crypto are the way of the future, considering the high speculative value of crypto it may need a huge correction, much more than what we just saw. Gold however is good hedge in light of coming inflation.

what about the classic "crypto has a limit while fiat can be unlimited"?

Thank you for this excellent post. You tell the true!

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford

Think about and wake up. Ford told us this about 100 years before and it is time to wake up!

It feels so nice when people like you take your precious time and write such a beautiful explained information on such topics. I have appreciated you for what you are always doing. I have also downloaded the app hope to have a great experience. Thank you

Great post. Any currency is all about trust that it has value. Crypto currencies have all elements that make them good currencies - but they are easily treatable and thus they have to offer something special ( like Steem) or they have to be big and old like bitcoin.

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give me the moneyy

Very nice vlog sir, once the world start understanding this system, We will have a world of our dreams.

Good explanation with good examples.

Now get out of your chair, turn around, grab that tree that you're trying to hide and get it out of your house! :)

Thank you and yes you are right about the tree...:/..lol.

Can I earn crypto on Utopian?

the was an eye opener . very educative and i think we need more of these .Good job

Really nice explanation, finally could understand it fully.

Very nice vid, did not know that banks are just creating the loans, i thought they take it away from their own holdings

Take away all the fiat currency that backs crypto in terms of exchange and what is crypto worth?

If I have 10000000000 bitcoins and can not exchange it for fiat or goods sold under fiat what is its value?

Super many services are starting to adopt digital currencies. You can even fly inside an airplane like with airBaltic by paying with Bitcoin. There are many consumer stores that sell electronics that you can pay with Bitcoin in Sweden you have webbhallen. You can buy cars with Bitcoin. Eventually you will be able to buy food with Bitcoin. It will be everywhere!

And Bitcoin has a limited supply of currently 16 million coins. So that keeps the value up considering how many humans are on earth 16M coins is nothing. The future world will have an increase in currencies and will be impossible for 1 human or team to control it all since so much new things is happening on a daily basis!

Yes it is considered a commodity. But has no backing value but for fiat.

Example VISA refuses to take Bitcoin and credit your acct in fiat, it would have to be converted to fiat first, they do not take commodities.

Example: I can not sent a 5 dollar chicken to VISA and have then credit me in fiat, neither can you bitcoin. But the chicken has value as a hard asset were as bitcoin is a unregulated sub fiat transacted in fiat currency.

Yes there will be a future in blockchain with the countries governments when they create their own and get rid of paper backed fiat bills. When that happens they also will not let a competing blockchain to be used in that country.

Example : in the USA Article I, Section 10, the states are not permitted to "coin Money; emit Bills of Credit; [or] make any Thing but gold and silver Coin a Tender in Payment of Debts...." Whereas the prohibitions on the states are clear and detailed, Congress's grant of power under the Coinage Clause is open-ended.

They did this so someone could not create a competing exchange like in the USA someone printing their own currency and it competing with the established one.

Right now blockchain is not a threat to the fiat dollar because its exchange is a middle man to the fiat dollar but when they go to blockchain it will be..

Thanks for a good comment. But the government trying to control new things we have seen how that has worked out in the past. For every new way they try to control things people will invent new ways of bypass. And since we are moving towards a borderless society and no nations world there will not be any country anymore.

They can and will work side by side the fiat and the new digital currencies. Of course the banks will adjust eventually they are smart. But with no nations world that central authority is more being removed. How far you can take that it's a good question. The term money is interesting because what we are doing here on Steemit is exchanging value. And that value is then being converted into digital "currency".

We are empowering people with technology so this was bound to happen eventually. The authority now becomes ourselves since we have so much power with these magical machines we call phones. But there will be a generation war since older people find it annoying that new technology is here and how it's changing so fast how things work.

We are moving towards a world with less ownership and more sharing. This will annoy people too that are highly invested in their house, car or any older system. But the truth is they can both work side by side in this world. The world is a big enough place for many ways of doing things. Especially now when world population going to 10 billion!

I guess my point was if the backbone of crypto is based on exchanging it into fiat currency it is in the hands of the governments to allow it, all they have to say is our country will not allow our currency to be part of this system and block / make it unlawful to have those transactions within their countries.

The ball is in their hands.

Ideally yes they could do that, totally agree with you. But the countries that use force in history has that worked well? Usually what happens then is another nation can come in and out compete the other by offering more freedom.

What happens if they use too much force is that it will be bad business and PR for the nation as a whole. Best they can do is to offer a low tax incentive or they may cause a brain drain effect where the smart and wealthy leave the country for another place.

The only thing you can't buy with fiat for the moment is food but that will probably be possible very soon in the future. So you will not even have to trade crypto into fiat.

I suspect we will see massive drops in value of crypto because of fear but that it will after some time start to rise again. There is just too many people involved right now to stop it. People are invested and think something has value then it has value because people think so.

I think there is a general misuse of crypto versus "fiat". I appreciate when people realize there is fiat and commodity. I see crypto as a paperless fiat (I like the use of unregulated sub-fiat, and the chicken bartering example, in your comments).

I think the value of the crypto is in the decentralization that make taxation difficult, and the exchange opportunities. When there are lots of currencies, there is more chance to speculate correctly on value swings. But at the end of the day, the buyers need to hand over the money in the form that sellers expect.

If a government locks up the conversions, or decides to tax the exchanges such that their fees become unbearable, then the liquidity risk will scare people out of the market.

Yes i agree I think that the gov sorta ignored it all until vast sums of money ran through the system, that is money that is not in their own crypto system called the stock market 8 }

Now that they are taking a look at it and know in the end it has to be converted to fiat that is where the taxes will be. These taxes will be placed on all products purchased and bled into the price of the product with no way around it unless the merchant wants to pay your taxes on it. I see crypto as a mini stock market with no commodity backing sort of a poker game between friends.

Crypto is not a commodity and is backed by fiat
Fiat is not a commodity
Fiat however is backed by commodities.

The GOVs are taxing on end game now.
Example - you buy a 500k home with crypto converted to fiat well that transaction has to go through a bank the GOV has that info that is not a problem until on your taxes you report a 20k income... Then it becomes a big red light. IRS says errr where ya get the 500k last yr to buy a house and where is the tax statement on your income ???? Very hard to keep the eyeballs of the GOV, State, and locals tax laws off the purchase.

The problem I see will be on the inside of the blockchain where for the yr all that use it will have to claim capital gains and pay taxes on per yr. That is what will disrupt the setup. The sharp ups and downs of the blockchain could put you in a situation where you make millions by the end of December pay taxes on it and by January its crashed to nothing. This sharp movement is a result of no commodity backing. If it had a commodity backing it would level out the spikes a lot.

Once converted to fiat it becomes stable based on the dollar or euro ect backed by commodities to make it somewhat stable.

I said this on a different comment as well but how are Steem and SBD not fiat currencies? That is the only MANDATED and ACCEPTED form of payment within Steemit, which is a decentralized, self-governed environment. Also, as exchanging parties, we determine their value by paying what we think they're worth. Sounds a whole lot like the definition of fiat currency to me.

A fiat currency is like the US dollar or Euro, a backed governmental currency based on a commodity backing like oil , gas, natural reserves, industrial merchandise ect, take the US fiat currency..In the old days it was pegged to gold and silver you could actually take a 20 dollar fiat bill to a bank and get the equivalent in gold given to you. That regulated the money supply to the amount of gold the country had which was not as fast in creating wealth as they wanted so they unpegged it from gold and allowed banks to loan however much they wanted to. today i think they can loan out 9 dollars to ever 1 dollar they have. When they unpegged from gold they used commodities or any hard asset be it oil or corn.

Steem and SBD is not until converted to a above fiat currency.

The form of currency Steemit uses or process is that crypto has to be purchased or given to someone bought with a fiat currency. Then the crypto can be used within the system. In order to have value it in turn has to be exchanged again for fiat currency

All crypto is a decentralized, self-governed environment but has no value unless converted to a gov commodity backed Gov currency like USD or Euro.

You can call any crypto a fiat currency the point is its not backed by a commodity so has no value until exchanged through a fiat backed by a Gov.

Example would you take 5000 usd in crypto for your car knowing you could not exchange that crypto for a a fiat currency backed by a Gov USD or Euro ect. If you do then its called a bartering system. And you would only be able to use the crypto you have to purchase something someone else has to sell that does not want hard currency as in usd or euro and will take only crypto.

In an earlier comment @nightwind used the term sub-fiat to describe crypto, and allowed paper currency to hold the fiat designation. Regardless, neither are commodity—we can agree to that. So I believe we are all of the same interpretation.

Yes crypto has blurred some of the terms for sure.

Fiat has no value but for whats backing it. The US dollar is backed by the economy of the US and all it produces in terms of GDP,

Crypto is backed right now by the fiat for it produces nothing but can be traded for something that does, a countries fiat currency that is backed by that countries GDP or whatever they peg the currency at.. Pull the Dollar and the Euro from it as a backing and boom it has no backing but for a batering coin. The GOVs know this.

The blurred part is that companies like VISA look at cypto or anything else that is not a recognized country fiat as a commodity. I think they do not have a better word for it nor care they just do not trade in commodities so they call it that.

This comment is full of so many absolutely true statements, I love it.

If you live in the US you are expected to declare income to the IRS regardless where you earned it. If you reside in WI and earned money at a job performed in FL, you have to declare it on the WI state form (even though FL is state-tax free). If you earn money through a job, capital gains, a deceased relative, excessive gambling earnings, and even working a side-job for cash you are supposed to declare it and pay taxes to enjoy the programs offered by your country.

Obviously there are many situations where there is a "you don't report, I don't report" agreement...nobody wants to pay taxes if it can be kept. But theoretically you can report paying a housekeeper cash, and they can get in trouble if they don't report it, too.

It's just called tax evasion. Being a successful daytrader or currency exchanger doesn't give a hall pass. Eventually the government will audit purchase patterns and question where your money came from. If it came from unreported capital gains from the crypto market you'll have to pay back-tax, go through repo, and possibly serve jail-time.

Another quick thought: you generally report capital gains or losses against what you cashed out, not against what you hold at the end of tax season.

So if you were a millionaire in December and a pauper in January, nobody would care because it could still go back up. HODL is not capital risk, it is liquidity risk. Now, if you were to sell despite the plummet because you needed to salvage some spendable money you could recoup some of the loss through a capital loss declaration and get some tax reprieve.

They will get their taxes one way or another. When they create their own gov blockchain to replace the fiat dollar I do not think they will allow other blockchains to run with it . It would be like someone today printing their own paper dollar and being able to exchange it for a us dollar today. I think they will exchange with other countries gov blockchains only.

This is very true

This is key reminder why Steem makes more sense than fiat.
We give the coin value
Keep on steemin’

Dude its very useful information ... It makes my belief more stronger on @exyle crypto... fear gone money in ... fiat currency also generated with some assumptions... crpto is king ... what u say ? but facebook also have some power as they have many group ..people promote theirr stuff etc ... can steemit beat the facebook ? or both are different

This was very informative and full of good information. It really helped me understand how money works even more. Thank you!

Where did you get this information? I would like to learn more.

Such an in-depth explanation, and it definitely helps to shed a lot of light on how cryptocurrencies work in comparison to those fiat currencies.
What sucks about fiat currencies is the fact you're forced into this system of debt in order to survive, and as you stated, the money being created is actually the result of the interest tied to the debt itself. That being said, interest and the money created from it never actually exists to begin with. This is why we see market collapses, such as the U.S housing market, where the debt clearly was far greater than the amount of money debtors could reasonably pay in return.

The other problem with fiat currencies is how banks have the upper hand. They can create more money out of thin air by issuing more debt, while the money we earn from working is merely money that was transferred, but not created.

The entire U.S financial system is a giant fraud! The banks here just squander all the wealth for themselves, and they're able to do so because they control all the wealth. Right now, my family is in so much massive debt, we can hardly afford to eat dinner, and often go without food. That's despite the fact we live on $4,000a month. But inflation has clearly outpaced my mothers income, and I have no income any more no thanks to this worthless economy that rewards corporate executives by turning Americans into slaves in their own country.

My problem with steem (currently) is the audience is very narrow. They only respond to articles about bitcoin and blockchain. Until an audience arrives, it will never take a hold.

That's not true. I have seen great response in many other niche categories like cars, food and success. But of course the largest will be about this new technology. It will take hold because it works and it's a better system. We humans are wired to save time and energy. If we find a new better system then we will adopt that! And clearly by looking at the numbers we can see that people are flocking and these sites are growing fast!

Perhaps the website layout can become better in the future for the ability to be able to find more content. Maybe you could implement some AI and machine learning. The world is moving to many new niches in the world and small tribes. Which is very exciting to see. This is sort of like YouTube 2.0 coming around 10 years after YouTube started. So will take a long time for the site to mature and grow. And competitor websites will come as well!

I disagree but not in a mad ranting way. But in a gentle loving passion. My observation is that Steemit is a crypto blog first. Ppl into cryptos may also be into food or cars and some posts can do well. Both examples you mention are about the most broad of subject btw. success and food. But ppl are not coming online to search for food and car stories by going to steemit first. Its merely the hobbies or sub interest of Crypto bloggers. and so, im going with: Steemit = niche audience.

You are suppose to disagree with me we are talking after all ;)

If you dig deeper then you could find any audience here. Communities will be better in the future with Smart Media Tokens. This is like Facebook in 2004 a bit pointless to judge for the moment. Clearly we are moving towards a Blockchain world because it exchange value faster. People want Speed and Value. Steemit gives you that. Also you have all these projects being built on top of the Steem Blockchain so satisfy any niche. We also have another project from Dan called EOS that will take over the world with thousands of apps. So the future is amazing and will include all people eventually!

i love this post
please follow and upvote me thanks

and i am like cryptocurrency and want to learn anything

Explain your post very interesting!

  resteemed

It seems interresting i followed and up voted. Please keep doing your great work

As of now, all fiat currencies are debt-based. So I guess one could say money is debt. I agree banks create the debt through loans but they are only functioning in a system designed for that. I don't see any problem with money being created out of nothing, it's the value we ascribe to is that come from production. That value can not be created, just the little units used to measure it. What we need is a debt-free currency. IMO that would eliminate a majority of the financial problem we see today. Enter bitcoin and the free market of money. If we could pay taxes in bitcoin we would be all set.

Thanks for an awesome video! You are a great story teller. The main thing that will change all is the new speed of exchanging value. With micro transaction technology. The most fascinating thing is to consider how widespread the blockchain will be used since the world population is going up to 10 billion.

It becomes impossible to have slow banks to still have authority anymore in this global world. They will probably live in denial for many many years. The math is truly amazing and how humans again can start to create their own tribes again but in the online world. We will create hyper intelligent humans!

And the best part is how it works in win-win how people want to give value because that makes them feel good. But it was just too complicated before. Now it becomes so much easier and especially when everyone will be on these blockchain systems how you will be able to give someone digital value within seconds. It creates a positive feedback loop.

And the creators of value will feel appreciated and like someone cares about them. It will be a proper relationship. It can create more trust and sharing between people. Will be very interesting to see how this will develop in the future. Now the world has become a video game where we have no idea what will happen the next day.

Ya that is an interesting insite. In the world of cryptocurrencies what type of loan options would be reasonable? If deflation is normal then loans don't seem to work. The way I see it is if somebody got a loan in a coin that has huge inflation then they could pay it off very fast assuming the coin price falls the same way US dollars inflate.

In the crypto world people buy Bitcoin first with Fiat and then trade it with other #cryptocurrency then they traded with it until it grows.

How are Steem and SBD not fiat currencies? That is the only MANDATED and ACCEPTED form of payment within Steemit, which is a decentralized, self-governed environment. Also, as exchanging parties, we determine their value by paying what we think they're worth. Sounds a whole lot like the definition of fiat currency to me.

This comment might be a little late but I hope it will reach you soon.
Indeed this is a really good post, I even used it as one of the references in my first article ( I am a new comer in Steemit, just made a first post today).
If you would like visit my page and share some thoughts regarding my article, it is going to be a really great honored to me.
Keep up the good work