> It is backed by the only thing that backs any form of money: the credibility of its monetary properties.
The “credibility” of the US Dollar, or any government-backed currency, has a lot to do with the amount of power that government has.
If, in America, an American citizen has a bunch of USD stolen from them, they can go to the government. In an ideal world, the government will find the thieves, get the money back, and dole out justice.
If that same person gets Bitcoin stolen from them, there’s nothing they can do.
Similarly, if the USD starts to lose its value, you can bet the government will do everything in its power to stop it from losing value. The US government has a lot of power to make changes that will actually effect this change, too, such as raising interest rates to fend off high inflation.
If the value of Bitcoin starts deflating, however, no one can really do anything.
So yes, sure, in a philosophical, pedantic way, Bitcoin is backed by something. But it’s worse than any major currency. In fact, it’s worse than the worst stock, because if market sentiment changes, there’s quite literally nothing _else_ propping up its value.
The “credibility” of the US Dollar, or any government-backed currency, has a lot to do with the amount of power that government has.
If, in America, an American citizen has a bunch of USD stolen from them, they can go to the government. In an ideal world, the government will find the thieves, get the money back, and dole out justice.
If that same person gets Bitcoin stolen from them, there’s nothing they can do.
Similarly, if the USD starts to lose its value, you can bet the government will do everything in its power to stop it from losing value. The US government has a lot of power to make changes that will actually effect this change, too, such as raising interest rates to fend off high inflation.
If the value of Bitcoin starts deflating, however, no one can really do anything.
So yes, sure, in a philosophical, pedantic way, Bitcoin is backed by something. But it’s worse than any major currency. In fact, it’s worse than the worst stock, because if market sentiment changes, there’s quite literally nothing _else_ propping up its value.