> What exactly does it mean when people say that a currency is backed by a government? I think the de facto meaning of backed, despite what people say about go

> What exactly does it mean when people say that a currency is backed by a government? I think the de facto meaning of backed, despite what people say about gold/silver/etc is actually this: American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back. From something I wrote a while ago about why being "backed" is important: https://medium.com/@simon.sarris/the-guns-of-bitcoin-1f779309a718 https://medium.com/@simon.sarris/the-guns-of-bitcoin-1f77930...