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Bitcoin is some kind of online currency (some of these neckbeards call it a "crypto" currency lol) that is supposed to undermine fiat money. Some obvious problems that I see: Since nobody controls minting of new money, how can interest rates be set / controlled? Same for as, but unemployment instead of interest rates?
So the money supply shrink in recessions which raise interest rate for loans and make it harder to relaunch the economy. But with a fiat currency, you can print money and cause some inflation to both lower the value of debt and lower interest rate by increasing the money supply and helping to relaunch the economy.
Today's "fiat currencies" are examples of what Marx called token money, referring to money that is merely a symbolic representative of the use-value of the money commodity, i.e., a given weight of gold. While credit money represented a legal promise to pay in gold, token money just represents the value of a certain quantity of gold, which was ...
Fiat is the only currency government accepts for this -and it's very difficult to get by in the world without incurring some kind of tax obligation, or placing that on someone else and so them wanting fiat.
Fiat money is all the currency you are familiar with. It’s money backed by the trust “fiat” in the monetary system - so US dollar is fiat currency, GB pound is fiat currency, Rusian ruble is fiat currency. It serves as money because people believe that it can be exchanged for goods and services.
It seems as if money becomes more and more of an abstraction as opposed to commodity nowadays. While currency in early capitalism was tied more exclusively to precious metals from which they were minted, especially gold, I think Marx was probably aware of this abstraction, hence the money commodity being the universal equivalent commodity (Capital ch. 1).
Government fiat money is generally accepted today since, the central bank limits its quantity and it is difficult to counterfeit, and it is needed for paying taxes. (Having a government demand payment of taxes in a particular currency is a useful way to give it value.)
Fiat money works the same way. Everyone agrees that the money has value and is worth something. Way back in the day, pretty much all money was based on previous metals. Gold, Silver, even copper. The United States dollar worked the same way, you used to be able to take your dollars and go and exchange them with the government for real, physical ...
Fiat money isn't actually created as debt. That's fractional reserve money, which the article isn't criticizing (at least not very well). Fiat money is when an authority dictates that their tokens shall be used as money, no backing or debt implied. That actually accounts for very little of the money in the system (2-3%).
The problem with fiat currencies is that it enables governments to manipulate the money supply at will, whether that is electronically or physically printing paper. Although normally performed with good intentions, these monetary policies can have bad effects on an economy, especially inflation.