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Euros and dollars are backed by guns and ammunition, not the wealth of nations. A short peek at history will show you that.

• ItendToDisagree 13y ago
  Agreed! But at one point there was a 'gold standard' which was backed by an actual thing. Although that thing was to a great extent backed by guns and ammo as well. Serious question: Could a 'crypto-currency' run on a gold standard? IE MtGox (or whoever) having enough of an actual thing to cover all of the coins? I hadn't thought about that but it is an interesting thought to me.
  • trothamel 13y ago
    It wouldn't work in the major current cryptocurrencies, as you'd have to have some way of mtgox issuing new coins for gold deposits. That would seem to be against the current sets of rules, which only allow miners to create coins. I'd assume it would be possible to have a cryptocurrency where a central authority stores gold/dollars/etc, and allows people to exchange it for coins and vice versa - basically, have special transactions that can create coins. Miners would have to mine for transaction fees, or maybe they could be paid out of the interest produced by the giant money pile. It would require a lot of trust in the central authority - and once you have that trust, it's not clear you need a cryptocurrency at all.