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In a recent Reuters story http://www.reuters.com/article/us-usa-banks-conference-jpmorgan/jpmorgans-dimon-says-bitcoin-is-a-fraud-idUSKCN1BN2KP, JPMorgan's Jamie Dimon threw a bomb at the emerging cryptocurrency.
In the story he states, "The currency isn't going to work. You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart."
He goes on to compare Bitcoin to the 17th-century Dutch tulip bulb situation.
Is he right, or is he just shilling for the present system of imaginary-value fiat currencies?
[Separately, according to Bloomberg, Bitcoin has been on a five-day decline: Bitcoin Crashes After Chinese Exchange Says It Will Halt Trading. --Ed.].
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JPMorgan's Jamie Dimon Says Cryptocurrency a Fraud, Bound to Fail
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Avoid gunfire in the bathroom tonight.
(Score: 2, Informative) by Anonymous Coward on Friday September 15 2017, @09:04AM (2 children)
There is where you go wrong. Cryptos aren't backed by "a number". It's their security, just like the security marks on cash (it prevents that someone can buy a gallon of gasoline with a blank piece of paper written "One Dollar" on it).
Fiat is backed by the promise of governments to pay you "something" (used to be gold... but now?) back for the note if you don't want it any more. Cryptos are backed by what someone is willing to pay for it (value determined by the market instead of a promise by a central authority). This is why the cryptos are also so volatile, most people are easily influenced in changed perception of its value.
Despite the volatility people are willing to accept it as payment, as they trust it that someone will pay back the exchanged value for it (eventually).
(Score: 4, Informative) by shrewdsheep on Friday September 15 2017, @09:27AM (1 child)
No, fiat money comes without any promise whatsoever (that is the difference between fiat and gold standard). There is only the trust that the bank of banks (federal reserve, central bank, however it's called at your place) manages the amount of money responsibly.
(Score: 2, Insightful) by Anonymous Coward on Friday September 15 2017, @04:22PM
Fiat money (at least in the US) is backed by one thing:
It is against the law not to accept money to pay off a debt.