I thought this video was interesting because it discusses and issue that many BitCoin skeptics bring-up.
How is it money or anything of value? Who is backing it?
When asked, my answer is essentially what this documentary brings up. Namely that after Nixon suspended the convertibility of the U.S. dollar into gold, fiat currency was given the worth that we’re told it is and that markets determine it to be (via Forex/Currency trading or price-fixing as some governments partake in).
[scroll down if you want to skip right to the video].
The documentary also essentially starts off the historic Bretton Woods Conference (yeah, the guy in the Wall Street movie sequel is named Bretton..no coincidence there). One of the key elements of that conference was the U.S. Dollar became the world’s reserve currency….due to that convertibility to gold issue I mentioned above.
From the documentary: “It’s unique because it can’t be created out of thin air.”
Once the gold tie-in was killed, governments across the world were allowed to essentially start ‘printing’ (creating out of thin air) money at alarming rates; something they have continued to do to this day. What that does is make our ‘fiat’ currencies (government created/backed currencies) backed by…well…good faith.
I said good-faith there to be kind to Central Bankers. Nothing, would be the proper term. So what is BitCoin backed by? Same thing. Nothing beyond the markets and their interpretation of what it is worth relative to fiat currency.
This is one of the better BitCoin documentaries I’ve come across because it speaks directly to the question I mentioned earlier on. Why does BitCoin have value? Well, what is money? Something we’ve agreed upon collectively as societies and now the world, that has value. Values we also determine.
The history of money is a fascinating subject, something far too long form for this particular post. I’ll write something on that later. Now, without further adieu, here’s the documentary. I hope you enjoy it.