On 2/12/2011 10:40 PM, Darren New wrote:
> Patrick Elliott wrote:
>> Ah.. I see.. So, this differs how from say.. a king ages back
>> declaring, "Use the money stamped with my image, or else."?
>
> No, that would be fiat money too. Except it was gold, so people would
> accept it even if it didn't have the king's face. The king's face was
> simply certification that the coin was the right weight.
>
>> Still not seeing how you have any kind of trade using money, without
>> it being fiat.
>
> When the value of the currency is not dictated from the top down.
>
>> Someone, someplace, has a press, or a mine, or *something*, which at
>> which they define the currency,
>
> No. When everyone agrees on the currency without someone using force to
> make it currency, it's not fiat currency. Gold with the roman king's
> face on it wasn't fiat because you could take it to greece and melt it
> down and turn it into greek money. The value wasn't "a coin with the
> king's face", but "one ounce of gold."
>
Right.. In other words, a commodity (even if it may be used on the basis 
of the content). Doesn't change the fact that bottom up definitions, 
versus top down, just means a smaller pool of people get to threaten you 
if you try to pay them, say, 10 silver for a horse, like you did two 
days ago in some other city, when they insist, locally, that it costs 
25. Someone is still threatening to take measures, if you don't pay up 
(even if the main measure is that you just showed up, to use Twain's 
history of Victoria city again as an example, from some place where 100 
silver coins would last you a year, to find that you can't even rent a 
room for less than 10 a day). Your non-fiat just means that there is no 
consistency **anyplace** as to what the value actually is. And, we get 
that BS enough from, for example, 100% of the hotels where I am, which 
mysteriously double their prices the moment spring break hits. Without 
some "general" agreement that X really is X, this just gets 
astronomically worse.

That a system with stable values is *just as* prone to disaster as those 
that do not have them is not really relevant. People where going broke 
right and left, at the drop of a hat, back in "boom times", when mining 
was all the rage, and all it took was for them to move a few hundred 
miles, and find that their pouch of gold dust was worth almost nothing 
there, due to how much was being pulled out of the ground, or that the 
mine hadn't panned out, and every bit of stock they had in them had just 
gone from a speculative $50 a sheet to toilet paper. And, the only thing 
"backing" any of it wasn't a government tax code, but the "assumption", 
that you could hand it to someone and they would treat it as money.

And that is my point. For the people using that sort of, "I trust this 
is worth X of Y commodity", whether it was feet in a mine, or physical 
coin, you can become a pauper 500 times faster under such situations 
that you would with a fiat system. The only danger of fiat systems is 
that, when some idiots are allowed to screw it up, it hits everyone in a 
country at once, not just everyone in the local mining town. Yet... I 
tend to suspect that a) the consequence is not quite as severe, and b) 
the recovery from such a disaster will be faster too, since there is 
someone responsible for making sure it gets fixed. Its not just a mad 
rush of Caveat Emptor, followed by 3/4 the population finding they have 
completely lost *everything* they own, over night, because they can't 
afford to keep any of it and not starve to death.

-- 
void main () {
   If Schrödingers_cat is alive or version > 98 {
     if version = "Vista" {
       call slow_by_half();
       call DRM_everything();
     }
     call functional_code();
   }
   else
     call crash_windows();
}

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