> The difficulty with cryptocurrency is that there is nothing of worth backing it
There is not much backing any other currency either, apart from the fact that:
- the government forces their currency on you
- the banks forces you to save that currency with them
- people "trust" the fact that the currency will be worth something in the future
But in fact what backs up every fiat currency is pure air. Let's say the dollar stops being the international currency, good luck explaining everyone what it's "worth" when nobody else wants it.
> But in fact what backs up every fiat currency is pure air. Let's say the dollar stops being the international currency, good luck explaining everyone what it's "worth" when nobody else wants it.
This is a pretty simplistic view of how things work. Even if the dollar stopped being the main reserve currency, it would still have value, just like smaller reserve currencies like the Euro and Pound, because people trust the governments to be able to pay their debts later. Until the US government can’t pay its debt and really defaults (and not the default that happens due to political stalemate) the dollar will have value.
Bitcoin and other cryptocurrencies will never have this, especially if over the span of a few days it can lose a significant chunk of its value because of a sale of a few tens of thousands of Bitcoin.
Sure, but it might be a 10th of what it is now. So in fact it's not backed by anything real.
> because people trust the governments to be able to pay their debts later.
Nobody in their right mind excepts the US to pay their debt (except through massive inflation) - the same goes for Japan and a few other countries where the debt is so massive it can never be repaid.
> especially if over the span of a few days it can lose a significant chunk of its value because of a sale of a few tens of thousands of Bitcoin.
We are still very early days in crypto. It's like saying the internet will never change anything in the mid-80s, well before the web actually started. There's very tangible reasons for crypto to exist, such as not needed any kind of official middle-man in the middle to use your cryptocurrency. The fact that it has value or not is tied to its utility on the market beyond speculation. Whether that will ever happen is a matter of how stable the fiat currencies are going to be, I'd wage.
Yes , but the fact that we built societies on those things means there is great incentive for keeping it going (as even critics of capitalism eepeatedly keep noting).
The problem with cryprocurrencies is, that the one thing they are really not good at is being a practical, efficient replacement for fiat currency, which is why building societies on them is hard. You could as well speculate on the unique shape of certain types of sheashells and develope whole subsystems of people analyzing their shape, building seashell storage sacks and fake seashell prevention agency and it would be still be more efficient than crypto.
There is not much backing any other currency either, apart from the fact that:
- the government forces their currency on you
- the banks forces you to save that currency with them
- people "trust" the fact that the currency will be worth something in the future
But in fact what backs up every fiat currency is pure air. Let's say the dollar stops being the international currency, good luck explaining everyone what it's "worth" when nobody else wants it.