Fiat Money - Circa 2012
This map of currencies around the world, shared through a Reddit post, features the fiat currency used by each nation. In the title for this post is Circa 2012, as the map has a time component. The currency used by a nation can be changed even without a change to the nation’s borders — as the possibility of Greece exiting the Euro taught us.
Many nations do not have a political fiat currency of their own even. For example, the map’s rendering of Equador, on the west coast of South America, shows the face of George Washington from the U.S. dollar bill — Equador’s legal tender since their peso collapsed more than a decade ago.
What will the fiat map look like a few years from now? Will many countries in Europe revert to using their own currencies? Will all national borders still be the same? Will independent nations form following secessionist movements.
This map is already out of date — as the Republic of South Sudan, recently independent from Sudan, uses the South Sudanese pound currency.
Yet commodity money does not change.
A silver coin with an ounce of silver holds the value of an ounce of silver irrespective of which nationality has its stamp on it.
A bitcoin too is oblivious to the concept of national borders. Bitcoin’s value comes from whichever person is offering to accept it in exchange for something else of value.
Bitcoin issuance occurs at a known, fixed rate so it can be accepted without the uncertainty of unexpected expansion of the money supply which all political fiat currencies are subject to, and to which many succumb.
Bitcoin has an advantage in that it can be used in transactions to and from every spot on that map. A Bitcoin transaction is non-reversible, and nearly free of transaction costs. It can be sent, stored and received anywhere in the world using technology that is no more sophisticated than the nearly ubiquitous mobile phone with data service or other networked device.
Because Bitcoin is an open protocol supported with open software, there is a global mass of collaboration occurring that is bettering it, expanding it, and using it in new ways.
Bitcoin’s breadth can be widened by parties found in all reaches of the globe without the endorsement, backing, permission or even participation by governments or by the giants of today’s banking and finance centers.
Because fiat money is used less as a medium of exchange and more as a medium of control, Bitcoin exclusively becomes the only form of money that is transacted under the norms of commerce we have today (i.e., can be used electronically) yet is free of restriction.
When free of restriction, markets operate more efficiently.
Fiat currencies introduce friction when the producer’s currency preference differs from the customer’s.
Absent this friction direct trade blossoms, reducing the need for intermediaries.
Bitcoin simply transcends fiat currencies and that realization is starting to spread. The seeds planted in the Bitcoin economy are starting to germinate and relationships among participants are starting to form.
While Bitcoin is open and thus inclusive to all — meaning there’s no special incentives or other preferences granted to those who act first, those that do begin participating now will gain a foothold by being first in their space and will be the first to benefit as commerce using bitcoins continues to gain steam.
Consumers who prefer to make their purchases using bitcoins versus them having to cash out their coins into fiat money first do exist today and they are growing in number. Merchants and service providers who serve these consumers gain a competitive advantage as a result.
Bitcoin is changing the landscape and those who are present on the surveys marked Circa 2012 will likely become the leaders going forward.