The answer to why those who have traded fiat currencies for Bitcoin desperately need them back is very simple: the fiat system ensures a return of value, while the Bitcoin system does not.
The fiat system consists of banks, both commercial and central, which issue their units as loans to individuals, companies, and governments. Since debtors, under the threat of foreclosure, account freezes, bankruptcy, or sovereign default, are forced to return those units to the banks, they must offer goods, services, and labor to those who hold them, while governments allow the holders to settle tax obligations with those units. Moreover, since banks must close unpaid loans to prevent capital impairment, they offer the seized movable and immovable property of defaulting borrowers at auctions to the holders. In short, the fiat system ensures a return of value to those who invest in it.
The Bitcoin system, on the other hand, does not function in this way. Instead of returning value, it only extracts it. Unlike the fiat system, it does not issue its units as records of debt, but as records of expended electricity used to maintain and secure those units. In short, it is not a system of returning value, but a system of irreversible extraction of value in the form of energy.
This is, of course, a problem for those who invest in that system, because for life, freedom, and basic needs, they require goods, services, property, and the ability to settle tax obligations.
This is why there are books, newspaper articles, social media posts, and conferences in which the Bitcoin and crypto community criticizes the fiat system.
It is a classic trick of reverse psychology. Since they desperately need access to a system that guarantees a return of value necessary for everyday life, they promote the narrative that banks and their money are a scam, worthless, or morally questionable. They want fiat currency so strongly that they are willing to attack the system that produces it day and night, just to persuade others to hand it over.
It is one thing when economists criticize the fiat system due to inflation, since inflation essentially means a reduction in returned value. However, when participants in a system that not only doesn't return any value but actively extracts significant amounts of it criticize the fiat system, that is clearly reverse psychology.
Therefore, acquiring as much stake as possible in the system that returns value, and escaping the one that only extracts it, is the ultimate goal of every Bitcoin investor.
Why Fiat Money Is the Wet Dream of Every Bitcoin Investor
byu/BinaryLyric ininvesting
Posted by BinaryLyric
5 Comments
Regardless of bitcoin, it’s pretty stupid to claim that fiat is a good investment. It’s one of the only “investments” that is guaranteed, by design, to lose value the longer you hold it. The only point of fiat is to pay for things whenever you need to transact.
Again . Fuck your BTC
Fiat money can be used to buy goods and services
bitcoin doesnt return value but scarcity and demand can still drive perceived value over time.
I feel that this formulation conflates the separate functions of both systems.
For example, fiat does not “return value” on its own, but rather facilitates transactions through enforcement, taxation, and credit. The actual value is derived by the economy using the currency.
Conversely, the design of Bitcoin is not set up to generate value for its own sake, but rather exists as more of a settlement and reserve asset layer, lacking any built-in credit functionality.
In essence, it’s not really about one “returning value” and the other “extracting value,” but rather about having very distinct purposes within the flow of value creation/transfer.