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Author Topic: What is bitcoin backed by?  (Read 738 times)
Ciremik
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February 13, 2018, 12:14:06 AM
 #1

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool
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February 13, 2018, 03:16:00 AM
 #2

What is any currency backed by? Currency is only backed by the people transacting with it. For example, the dollar only has value because its users see it as a fair exchange for goods. Like any currency, its value is subject to those who agree to use it.
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February 13, 2018, 11:55:03 AM
 #3

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool


Bitcoin supported
1) money idealists who believe that bitcoin will be able to defeat the banking system and become a new world currency.
2) money traders who have brought their money to the stock exchange in an effort to earn and buy bitcoins from miners and other traders. (This includes except for single traders and financial funds)
3) companies producing asiki, since if something happens with bitcoin, they will actually go bankrupt because ASIC can only consider Bitcoin hashes.
4) companies that act as merchants. That is, they allow shops to sell goods for bitcoins, while the store will receive payment in rubles / dollars / euros ...
5) illegal operations with money laundering / drug sales and other. Silkroad and analogues.

In general, some ecosystem has bitcoin Smiley If I did not name any spheres, then maybe someone else will add.
leea-1334
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February 13, 2018, 11:59:16 AM
 #4

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool

But the reality is that Bitcoin is backed by nothing other than the value that peers, users, the network itself provides to people. I know people are really building up hype into the so called tokenized economy, with digital assets backed by physical tangible assets like precious metals and fiat, but this is the beauty of Bitcoin to me.

After all, so many currencies in the world are backed by nothing but promises. And you can see what happens that governments cannot always fulfil those promises. See Argentina, see Cyprus, and many other examples in recent past.



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February 13, 2018, 12:35:05 PM
 #5


I believe that bitcoin can change history even though many people say bitcoin is not supported by anyone, for those who say "bitcoin is not supported by anyone" maybe they do not believe that bitcoin can change history
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February 13, 2018, 12:47:18 PM
 #6

In fact, demand is supported by people. I recently read an interesting article. It wrote about the importance of HODL in the growth of bitcoin and that it is investors that are an important element of the price movement up.

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February 13, 2018, 01:06:15 PM
Merited by Imfinnabeon (1)
 #7

Bitcoin is backed by people, energy and time.
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February 13, 2018, 05:28:33 PM
 #8

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool

The real question may be whether currencies being gold backed collateral can function as a preventive measure to mitigate the risk of dangers posed by overprinting or hyperinflation based crashes fueled by state issued deficit or debt. Gold backed currencies like the (geman) deutsche mark have hyperinflated and crashed in past history. Gold standards were largely being utilized before the advent of the internet, digital currencies or the recently proposed "cashless societies"(which are the furthest thing from being gold backed or NOT creating money out of thin air  Cheesy).

The concept of "gold backing" being a valid protection scheme against negative consequences could be archaic or obsolete. Gold standards were devised long before the internet existed. Long before credit cards or modern day conveniences. I think civilization might benefit from greater acknowledgement of "gold backed" securities no longer fulfilling their intended role.

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February 13, 2018, 05:44:25 PM
 #9

OP just nailed it,there is nothing backing Bitcoin in terms of tangible things, but in terms of intangible stuff, it has lots.  The belief of the people, the idea it wanted to convey, I believe it is the demand of people and wants to get out of the traditional banking system that backs it.  Being decentralized and no one governing it, it is backed by peoples trust on the bitcoin system that it will end the tyranny of centralized financial institution.  That I think backed bitcoin.




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February 13, 2018, 05:49:36 PM
 #10

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool


Bitcoin supported
1) money idealists who believe that bitcoin will be able to defeat the banking system and become a new world currency.
2) money traders who have brought their money to the stock exchange in an effort to earn and buy bitcoins from miners and other traders. (This includes except for single traders and financial funds)
3) companies producing asiki, since if something happens with bitcoin, they will actually go bankrupt because ASIC can only consider Bitcoin hashes.
4) companies that act as merchants. That is, they allow shops to sell goods for bitcoins, while the store will receive payment in rubles / dollars / euros ...
5) illegal operations with money laundering / drug sales and other. Silkroad and analogues.

In general, some ecosystem has bitcoin Smiley If I did not name any spheres, then maybe someone else will add.

I want to add electricity to your list. First of all, the cost of cryptocurrency supports the cost of electricity needed for its production and maintenance. The bankers and the government spread many different rumors to create a negative image of cryptocurrency.
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February 13, 2018, 06:14:38 PM
 #11

Bitcoin is backed by people, energy and time.

Spot on. We do some of the backing yes, but the POW system and the miners are what create the coins and give us basis for a price point. Without that system in place we wouldn't have originating prices. All 5 aspects of Bitcoin are needed to derive a price and the security it needs so we in turn can have faith in backing it.

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February 13, 2018, 06:22:16 PM
 #12

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool


Fiat is backed by nothing but the State's threat of violence for it has reserved the right to print money for itself. And since it can print as much as it see fit, it may not even reflect the reality on the ground (insert image of American president accusing China of devaluing the yuan to keep exports cheap).

Bitcoin is backed by trust but many people still  consider that as nothing. They probably feel uncomfortable having the value of their money dependent on the whim of strangers.
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February 13, 2018, 06:32:37 PM
 #13

The simplicity of the way economics works is that nothing is backed by anything. Everything has a price that is determined by market forces, supply and demand. Bitcoin's price goes up and down because peoples perception of its value changes. This is true to everything in the world.

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February 13, 2018, 07:36:35 PM
 #14

... the POW system and the miners are what create the coins and give us basis for a price point. Without that system in place we wouldn't have originating prices. ...

How do you explain proof-of-stake coins having a price greater than 0?

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February 13, 2018, 07:39:37 PM
 #15

People believe bitcoin is backed by nothing. I think that is not the truth. I believe bitcoin is actually backed by people themselves. It is backed by none other than just you. We all witnessed the price has been fluctuating by all those FUDs and bad news. The price changes by emotion and non logical facts. I believe you hold bitcoin no matter what happened and would happen, and believe it is backed by all of us, it would make a history.  Cool
In the meaning of centralization and price control it isn't backed by a particular person or a group of people, that's what others believe in. That what you are talking about is the thing that makes Bitcoin popular and demanded, which makes up the price.

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February 13, 2018, 08:07:37 PM
 #16

One problem with writing that "X is backed by Y", is that there are many meanings for "backed by". Without stating what you mean by "backed by", this discussion will go nowhere.

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April 23, 2018, 01:36:34 PM
 #17

They once believed that bitcoin is backed by nothing, but I guess bitcoins are backed by those people whor are currently fund of doing them. Those who are really interested in doing so and are sure of practicing it.

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April 23, 2018, 01:47:19 PM
 #18

bitcoin is supported by people who like bitcoin, if bitcoin does not support it maybe bitcoin will die and not worth it, investor support, shareholder is so necessary that bitcoin will not die forever

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April 23, 2018, 01:51:30 PM
 #19

They once believed that bitcoin is backed by nothing, but I guess bitcoins are backed by those people whor are currently fund of doing them. Those who are really interested in doing so and are sure of practicing it.

You can say so, yes. I believe in the same thing also despite all the statements that says otherwise towards this belief of us Crypto currency lovers. And even though some of these negative comments on bitcoins that a lot of people says sometimes makes sense, if you truly are a believer and an investor of this coin, you will ignore them because you know to yourself what really is right(considering that you really did your own research about bitcoins or the crypto world). Some people just cannot accept their mistakes even when they know they were wrong just because of their prides. That's just how people are.

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April 23, 2018, 02:03:41 PM
 #20

Basically, it is backed by the code (which is mostly impregnable), people's trust in it and the fact of decentralization.
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