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This take on Bitcoin -- not backed by anything in the physical or virtual world -- is misinformed. You're correct that coin isn't specifically backed by anythin
by dizzant 6y ago
This take on Bitcoin -- not backed by anything in the physical or virtual world -- is misinformed. You're correct that coin isn't specifically backed by anything in the sense that you can't trade it in for a an equivalent asset like gold. But neither is the US dollar. BTC's value is backed at least by the billions that have been spent on mining architecture by companies like MARA and RIOT, large mining pools, producers of mining ASICs, etc. Huge amounts of physical and virtual infrastructure have been created to achieve the current global hash rate, and the stakeholders in that infrastructure have vested interest in the value of Bitcoin remaining high. China is transitioning to digital currency, which lends legitimacy to the technology. There is also a growing collection of institutional owners, such as MicroStrategy, Square, and Tesla's notorious $1.5B buy in.
The USD is backed by "the full faith and confidence of the US Government" since leaving the gold standard. Bitcoin is backed by collective faith and confidence in the security and utility of the underlying blockchain. As more opportunities arise to transact in Bitcoin, its value will tend to stabilize.
- imtringued 6y ago>Huge amounts of physical and virtual infrastructure have been created to achieve the current global hash rate, and the stakeholders in that infrastructure have vested interest in the value of Bitcoin remaining high. Miners are in it for the money. If the money dries up they just move onto something else. Your logic could be applied to the gold rush as well. A huge industry was created, it won't let gold fall in price as if there was a huge cartel capable of doing so. >But neither is the US dollar. I can exchange it for things I want to buy. That's plenty of backing for the average consumer. If one day it has become worthless because I cannot buy anything with it anymore then I will declare it worthless and so will everyone else. Meanwhile with Bitcoin this logic is the same and when it does finally become worthless, people will still insist that it isn't.
- Goronmon 6y agoThe USD is backed by "the full faith and confidence of the US Government" since leaving the gold standard. Bitcoin is backed by collective faith and confidence in the security and utility of the underlying blockchain. The utility of a country, it's people/resources/military/economy/etc, is pretty obvious. What is the utility of the blockchain outside of the value of Bitcoin itself?
- darioush 6y agoFor example, "the collective lack of full faith and confidence of the people that the US Government will always act in their best interest"
- imtringued 6y agoLet's say Bitcoin grows by another 1000x. Will people create a Bitcoin state that guarantees the value of Bitcoin? Is that the end goal?
- 2muchcoffeeman 6y agoYou can’t ban the USD though. And I don’t see China adopting Bitcoin. They will have their own currency. While I wish I jumped on the bandwagon. I don’t see why any nation would adopt a solution they don’t control. They are happen to consider it a commodity and tax it though.
- lottin 6y agoI wasn't talking about bitcoin not being backed by anything (which is true, incidentally), I was talking about NFTs.