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Recent realization: Most Bitcoiners don't actually know how the fiat system works. On any level. They have superficial understanding that there's some monetary expansion going on (usually wrongly attributed just to the central bank). They have some understanding about how the payment networks work, mainly from the failures, but don't understand the details. They repeat mantras (which are usually true), but don't have any logical theory.

It's OK, even with this superficial understanding, you can see why Bitcoin is better. And their superficial understanding is still better than no understanding, which is 99% of nocoiners.

But still it's fun how wrong they are.

Good questions to figure out if they know what they are talking about:

- What is a dollar?

- What exactly is the balance in your bank account? What does it mean?

- What is eurodollar?

- How many dollars there are?

And my favorite:)

- How could you (even if you are not a bank) create new dollars today?

atori 8mo ago 💬 1

The balance in your bank account ("bank money") represents a claim on central bank money in the form of cash. It's a liability of the bank. In practice, it is not possible to actually get all of it in cash.

Bank money is created when banks give out loans, and it is destroyed when those loans are repayed.

Only certain financial institutions have access to digital central bank money, ie "central bank reserves", through the account they have at the central bank.

Only central bank money has no counterparty risk.

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Discussion

C.S.Burner 🪙➡️🔥 8mo ago

"Bank money" becomes "real = central bank money" when the central bank buys the loan e.g. MBS or Treasuries. So Euro Dollar is used to buy MBS or Treasuries. Then the MBS or Treasuries are bought by the FED and so finally becomes a real dollar.