>>1. is that you can pay your US federal and state taxes in USD >>2. and many companies and individuals will accept USD in trade for goods and services. First

>>1. is that you can pay your US federal and state taxes in USD >>2. and many companies and individuals will accept USD in trade for goods and services. First of all to have USD someone needed to borrow it first and they need to return it. The USD you hold is useful for someone else to pay their debt back. This is much more important than taxes. >>Thus if USD has value by the measure above than BTC must share some of that value. No, the reasoning is based on missing the point of fiat currency: someone else owns USD to the central authority with a lot of power. >>For example you can burn paper money to generate heat or melt down coinage into useful metals. Does having that property make paper money or physical coins better as a currency? Goldbugs would say yes, I'm less sure. The point is that USD represents someone's debt. They will need to come up with goods/services to pay that debt back if they don't currently own enough USD. BTC represents wasted power and its only value is a hope someone wants to accept it as payment even though no one really needs to (unlike USD).