Bitcoin Forum

When people say that Bitcoin is not backed by any government or central bank, you can now officially tell them that the Dollar and the Euro aren't either.

I've opened the wikipedia article on the Euro, and it doesn't mention the word "backing" not once.
http://en.wikipedia.org/wiki/Euro

• The Euro is not backed by any government or central bank (http://www.theatlantic.com/business/archive/2013/03/everything-you-need-to-know-about-the-cyprus-bank-disaster/274096/)
• The US Dollar is not backed by gold since 1971 (http://en.wikipedia.org/wiki/Nixon_Shock)

If anyone ever tells you that the Euro and Dollar are more guaranteed than bitcoin, yell at the top of your lungs "LIAR! THIS PERSON IS A LIAR!"

I would say that not being backed (i.e. controlled) by any government or central bank is one of the essential advantages of bitcoins. The idea is to get away from state and institutional control not towards it.

The more I think about bitcoin the more I think that governments (or the people that control them) are behind it (that's not to say that they control it, just that I'm starting to think that they want it to succeed). Best to be in it either way IMHO.

Regardless, my point is that neither is backed.

Depends on what you mean by backed. Is it redeemable for a fixed amount of gold or silver irrespective of exchange rate to fiat money....probably not. Do some governments want it to succeed....who knows?

Bitcoin is backed by its unique properties as a medium of exchange and as a monetary system.

"Backing" is a term reserved for a guarantee by another party that something is of value, such as being exchangeable for another asset by that third party, or being insured in some other way (hence being guaranteed).

Such claims as "bitcoin is backed by [insert property/feature unique to bitcoin]" are erroneous. You are providing a property of bitcoin, which may indicate value. Its unique properties don't back it. Its unique properties are it.

This claim is like saying "gold is backed by its unique color". No, it's not. Its unique color is a property of gold, which is why some people attribute value to it. Its color does not "back" it, no matter how you define "backing".

Please stop with these claims of bitcoin being "backed" by anything. Nobody is guaranteeing that bitcoin is worth anything. Nobody is promising your something in exchange for bitcoins. Bitcoin is NOT backed by anything apart from your own personal trust and belief.

No it's not. Bitcoin of the same blockchain cannot be counter-fitted, thanks to certain mathematical properties of bitcoin. But "math" does not "back" the value of bitcoin. Even counter-fitting is possible with bitcoin using a few types of attacks.

Can we please stop with this?

What is happening to money backed by the state Bank Of Cyprus ?

This is what has come to mind for me recently when people ask the question about how Bicoins are 'backed'.  How's was the money of the citizens of Cyprus supposedly 'backed?  How's that working out for them?

People trust what they know, THINK they understand, and are comfortable with.  When I read some of the comments replying to articles about Bitcoin, I think about the 'Flat Earth Society' of old.  Only time will tell who was right, and perhaps we're headed for the edge, but that, to me, is part of what has made this speculation so enjoyable an exciting.

Exactly that.

It's so nice that the state itself makes our counterpoints for us...

I agree with some of your points about counterfeiting and underwriting but the topic title is "What to say against the claim "backed by the state/bank"." Why do you think we should claim that bitcoin isn't backed by a state/bank?

I would say: "You're right, Bitcoin is backed by no government ( just a bunch of regular folk running validating nodes (like me), enterprising miners securing the network, intrepid business owners adapting the technology and increasing acceptance, and clever devs creating the technological basis for our future money)....dont forget, Bitcoin is not exposed to incredbly large sovereign debt burdens or central bank mismanagement risks either."

Because it's not?

I'm not even saying "claim that bitcoin isn't backed by a state/bank", I'm just saying claim that fiat isn't.

There are so many stupid things in this thread. Quoting wikipedia like some kind of abirter of truth, semantic interpretation of backing, bitcoin being backed by math. Conceptual misunderstandings all over the goddamn place. What a mess.

The only backing fiat money has is that you are force to accept it because of legal tender laws. But nothing forces you to accept a specific amount of fiat money for rendering a good or service. In this sense, the backing really means nothing. If someone were to say to me that their money is "backed" by the government I would just say ok what will they give you if you returned it to the Fed?

http://img825.imageshack.us/img825/5962/usm1basepage1.jpg (http://imageshack.us/photo/my-images/825/usm1basepage1.jpg/)

Sure, regulation is everywhere.

How about this. I already defined what I believe can be considered "backing", semantically speaking:
I may, however, be wrong and I want anyone who disagrees with me to please define "currency backing" so that we can get the semantics out of the way.



What?? Since when is regulation = backing? Wait, cigarettes are regulated by governments, does that mean that cigarettes are backed by governments?

The point people are making is that you are failing do recognise the different meanings of "backing" as in 1)underwriting and 2) being in favour of.

As for "currency backing"....well now you're just moving the goalposts.

I referred to the underwriting of the Euro, and given the recent events in Cyprus have proven it is false. And if "being in favour of" is a form of backing, then in that case it needs to be clear from the get go in every conversation because I don't think that's how most people understand currencies to be "backed". "Being in favour of" is very, very different than how I define "backing" a currency.

Fine. Call it "backing a currency". We're not just talking about any "backing", are we? If I put my back against the wall and call it "backing", should we discuss if bitcoin is being "backed" by anyone in such a way?

Bitcoin is backed by trust in a large functioning network system.

Backed by the state = the state can take it away whenever they want.
Backed by the banks = the banks can take it away whenever they want.

That's all you need to know.

+1

This is a great response.... It is best to emphasize this idea...Bitcoin is backed by the only person who can take yours away: you.

Simply point out that regardless of how the dollar is backed, it is has lost 95% of its value since the Fed was created. Whatever the backing may be, it has not been very effective.

I would say that Bitcoin is backed by all the users of Bitcoin wallets who all will claim and have proof that you have a certain amount of money.

In the end, all money is based upon trust. The decentralized nature of Bitcoin means that you can share your trust between multiple people who are all  keeping each other in line. This in contrast to centralized systems where you will have to put your trust in only one entity(person/company/government) that will be able to do what they wish with a certain valuta.

Also, notice how the meaning of the word "backed" has changed. The meaning of "backed" had to change because now that the gold standard is gone, the dollar is no longer "backed" by anything under the old definition of "backed". No government would be willing to say their money is "backed" by nothing, so they had to change the meaning.

When the U.S. was on the gold standard, the dollar was "backed" by gold. That meant that the dollar represents and can be exchanged for a fixed amount of gold.

Now, the dollar is "backed" by (depending on who you ask) the U.S. economy, the U.S. military power, the ability of the U.S. to tax its citizens, or the full faith and credit of the U.S. Government. Now, it means that the dollar is supported by or defended by something, as in "Don't worry, bro. I've got your back."

Of course, as I pointed out earlier, the new meaning of "backed" is just as fictitious as the backing itself.

I dont think it would be hard to argue, legitimately, that if bitcoin is backed by anything, it IS math.
What the hell do you think SHA256 is? Reading Comprehension (haha i guess it is sorta)? Woodshop? Nope, Its definitely math.   ???
Additionally, I think it is safe to say that the state is backing a currency if they are allowing debts to be paid using it.