Why are people running around saying Bitcoin is intangible / not backed?

[misterbigg]

I just saw the Félix Moreno de la Cova interview with James Turk, and both of them keep repeating this meme that there is nothing backing Bitcoin.

To me, this is completely wrong. Bitcoin could be seen as a public ledger that tracks ownership of a digital good. In this light, what backs Bitcoin is the collective consensus, plus the physical copies of the blockchain.

I reject the notion that Bitcoin is intangible.

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[Dansker]

BITCOIN GOT BACK!

[RodeoX]

I'm sure they mean that like gold there is no asset backing, insurance, etc. But I agree with you that they have some backing by bitcoin users. We back bitcoin!

[misterbigg]

I'm sure they mean that like gold there is no asset backing, insurance, etc. But I agree with you that they have some backing by bitcoin users. We back bitcoin!

Well this nonsensical "GoldMoney" product isn't backed either, except by the legal system.

[allthingsluxury]

I run into this too when I try to explain modern fiat dollars to people. They don't understand that there is a incredibly limited amount of paper dollars printed in physical form. The rest is simply digital 0's entered into a computer. At least bitcoins are limited in their creation. Central banks simply need to add a few zero's and create unlimited amounts of money if they feel like it.

[Vladimir]

Cognitive dissonance is too strong and often causes unhealthy fixations on some specific aspects of Bitcoin.

Most of critique of Bitcoin that  I've heard to date is based on ignorance.

[barbarousrelic]

It is not exchanged at a set rate for anything else. Thus it is not backed.

The US dollar is not backed either.

I don't know about "Goldmoney."

[Vladimir]

The US dollar is not backed either.

This is not exactly correct. I would say that USD is backed by US armed forces. One could say that USD and most other fiat currencies are backed by future tax revenues to be confiscated from enslaved population of corresponding country or political block.

I would also say that Bitcoin is backed by The People, i.e. you and me and everyone else who accepts and pays in Bitcoin.

[BTConomist]

I would also say that Bitcoin is backed by The People, i.e. you and me and everyone else who accepts and pays in Bitcoin.

And by the mighty hand of vigilante hackers -- the big guns of online world.

[misterbigg]

Most of critique of Bitcoin that  I've heard to date is based on ignorance.

It's one thing when the average joe doesn't get it but we're talking about both Moreno de la Cova interview and James Turk spouting complete nonsense.

[barbarousrelic]

The US dollar is not backed either.

This is not exactly correct. I would say that USD is backed by US armed forces. One could say that USD and most other fiat currencies are backed by future tax revenues to be confiscated from enslaved population of corresponding country or political block.

I would also say that Bitcoin is backed by The People, i.e. you and me and everyone else who accepts and pays in Bitcoin.

How many US armed forces or future tax revenues can I get in exchange for a dollar?

And how many people can I get in exchange for a Bitcoin?

The answer is none, because they are not backed by anything unless you are going way into the metaphorical sense.

[knight22]

Bitcoin is backed by all the advantages that other currencies don't have.

[nobbynobbynoob]

Bitcoins aren't backed by a commodity but they are a commodity money in their own right, the commodity essentially consisting of the network, blockchain, hashing power and so on. CASASCIUS "bitcoins" and their ilk are physical coins backed by the digital commodity, which is an interesting twist!

[sunnankar]

Well this nonsensical "GoldMoney" product isn't backed either, except by the legal system.

I would not assert the GoldMoney product is 'nonsensical'. It does have meaning and does make sense. Goldgrams are tangible just not corporeal because, as you point out, they are based on the legal system which is less tangible than maths.

Most of critique of Bitcoin that  I've heard to date is based on ignorance.

It's one thing when the average joe doesn't get it but we're talking about both Moreno de la Cova interview and James Turk spouting complete nonsense.

Usually, Mr. Turk does a decent job at crafting logical arguments. But in this interview, it is plain that Mr. Turk's logic is twisted. From his analysis, the issue is whether a good has to be corporeal to be tangible.

In Turk's own argument he asserts that a good, goldgrams, can be non-corporeal and still be tangible. By using the same logic he applies to goldgrams one has to conclude that bitcoins are tangible even though non-corporeal. We will assume he has made the logical error inadvertently and not deliberately despite bias.

Perhaps the two of them should take a course in logic? But then again you can't fix stupid thinking.

Although counterintuitive, bitcoins are more tangible than gold just like math is more tangible than chemistry because humanity's knowledge of math is more complete than their knowledge of chemistry. For a being that can perceive maths Mr. Turk's fetish for something he can pet is quaint and his lack of ability to pet bitcoins makes them no less tangible to a being that can perceive maths than a being that could not perceive maths. For example, are prime numbers intangible to elephants because they cannot perceive numbers? Just because an elephant cannot perceive numbers does not mean numbers are not tangible. Can an elephant proclaim numbers are fictitious because the elephant cannot perceive numbers? No, the problem is with the elephant's inability to perceive not with the numbers. So likewise the problem is with Mr. Turk not with bitcoins' tangbility.

[Melbustus]

Yeah, when folks typically talk about "backing", they're referring to a metal, commodity, or government. This is clearly a legacy of the gold standard, when the word "backed" meant something specific (gold, silver). It's expanded a little to potentially include things like oil or the "faith and credit of the united states of america" (whatever that means).

The hard thing is getting people to realize that bitcoin is just as fundamental as gold, and both are fit (bitcoin more so, in my opinion) to *be* the backing underlying higher-level systems.

The issue of physical tangibility is just stupid. But it is, unfortunately, a huge mental block for lots of people.

[benjamindees]

They believe that gold and dollars are backed by something.

In the case of gold, well, it sort of is.  But when push comes to shove, it won't be worth as much as they think it will be.

[misterbigg]

bitcoin is just as fundamental as gold, and both are fit (bitcoin more so, in my opinion)

Well gold and silver coins have the advantage that they can be spent without requiring electricity or an Internet connection. I think an appropriate "doomsday portfolio" would of course include a sizable portion of Bitcoin but also some precious metal bullion.

[Malophor]

What ever happened to the argument that BTC was backed by the hashing power of the miners?

[bitcoinbear]

What ever happened to the argument that BTC was backed by the hashing power of the miners?

It was bunk, so people stopped repeating it.

[benjamindees]

Well, it's sort of accurate, in the metaphorical sense.  No modern currency is "backed" in the literal sense.  And the ones that try to be, like the oil-producing states, are just backed by other currencies.

But holding those currencies gets you access to certain services.  Holding US dollars gets you access to the US military, and to the oil market.  Holding "commodity" currencies like the Canadian and Australian dollars gets you access to the commodities produced by those countries.

Holding Bitcoins gets you access to the transaction services provided by miners.