"BTC Is backed by nothing while the USD is backed by 'full faith' of US gov't"

[Kazimir]

BTC is backed by the laws of mathematics and the power of cryptography.

USD is backed by the 'full faith' of the US govt.

I sure as hell know which of these two I trust more.

only the supply side is backed by mathematics and cryptography, demand side is backed by market demand only, by all of us believing it is useful as a currency, without demand BTC is worthless no matter how rock solid it's supply is

That's not the kind of backing we're talking about here. Is the demand side of the USD backed by the US govt? No, if there is no demand, there's no button the US govt can press to magically create or enforce it. Sure they can attempt marketing, political P.R. and propaganda but in the end, nothing is guaranteed. So much for "backing".

[Bigeyeone]

BTC is backed by the laws of mathematics and the power of cryptography.

USD is backed by the 'full faith' of the US govt.

I sure as hell know which of these two I trust more.

only the supply side is backed by mathematics and cryptography, demand side is backed by market demand only, by all of us believing it is useful as a currency, without demand BTC is worthless no matter how rock solid it's supply is

That's not the kind of backing we're talking about here. Is the demand side of the USD backed by the US govt? No, if there is no demand, there's no button the US govt can press to magically create or enforce it. Sure they can attempt marketing, political P.R. and propaganda but in the end, nothing is guaranteed. So much for "backing".

Yes it is, demand side of the USD is backed by the US government through taxation, as long as everyone living in the US can only pay taxes in USD everyone will need to hold USD or go to jail

[bovcan]

BTC is backed by the laws of mathematics and the power of cryptography.

USD is backed by the 'full faith' of the US govt.

I sure as hell know which of these two I trust more.

only the supply side is backed by mathematics and cryptography, demand side is backed by market demand only, by all of us believing it is useful as a currency, without demand BTC is worthless no matter how rock solid it's supply is

That's not the kind of backing we're talking about here. Is the demand side of the USD backed by the US govt? No, if there is no demand, there's no button the US govt can press to magically create or enforce it. Sure they can attempt marketing, political P.R. and propaganda but in the end, nothing is guaranteed. So much for "backing".

Yes exactly...and a good example of this is that during the 1930s, people didn't value their USD enough, so FDR made it illegal for anyone to hold gold and all US citizens were ordered to turn in their gold to the federal gov't or face possible prosecution.   This was done to prop up the dollar because the "demand" wasn't enough.

[TippingPoint]

This is what the full faith and credit of the government looks like, in real life.

https://en.wikipedia.org/wiki/Executive_Order_6102

[FalconFly]

US Dollar, the representative of the financial/economic aspect of this nation, is backed by the political, industrial, military, and national will of the United States. As is any other national currency on earth.

It belongs to Americans, controlled by Americans and American government, and those whose identity and loyalty is American.

I hate to spoil the party but the "US Dollar" in terms of the Constitution of the United States and its Treasury Coinage act ceased to exist in 1913.
This is when the Federal Reserve Note was introduced that replaced the US Dollar (although alot of effort was put into keeping the name despite the drastic changes that this transition caused).
The US Dollar in accordance with its original Coinage Act was real, actual money that still retains its value today.

The Federal Reserve Note is an IOU, a debt certificate (it's even printed on the paper in plain), legal tender and legally not redeemable in anything but debt of its own denomination.
It belongs to a private banking corporation called "Federal Reserve" or FED, controlled solely by its private owners and associates (the government, let alone americans have absolutely NO legal authority over it whatsoever - they borrow from the FED at interest) and is supported by those whose identity and loyality is for global central banking.
The Federal Reserve Note with the Federal Reserve Act of 1913 has lost >98% of its original debt value within the last 100 years, with alot more to come. Go figure.
By definition before 1913, a Federal Reserve Note would be counterfeit money and its creators would have been sentenced to death for conducting the capital offense of debasing money by the terms of the original Coinage Act of 1792.

That FRN, however, is backed by global central banking and the puppet governments they own - and they will rage war on anything or anyone that threatens its global reserve status and/or their control over it.

[kwoody]

The value of the USD is actually backed by the US military. It is the force that prevents other nationstates from invading and wiping USA out of its miserable existence. No more USA = no more USD. Military defends government and allows government to exist, government says USD is money.

[bluemeanie1]

It's amazing how I read this all the time, but it makes no sense.  

Am I missing something here or are people who say that just as dumb/clueless as I think they are???

you're missing something.

How does the USA back the value of the dollar??

by forcing taxpayers to make good on the debts of the US government.  How this is possible in the long term seems to escape most of our 'experts', who will be long gone when the time comes to actually pay.

Don't listen to people like Krugman who want to scare you away from using things like Bitcoin.

[bluemeanie1]

also did I mention we recently gave trillions of dollars to billionaires so they don't become poor?

[bluemeanie1]

The value of the USD is actually backed by the US military. It is the force that prevents other nationstates from invading and wiping USA out of its miserable existence. No more USA = no more USD. Military defends government and allows government to exist, government says USD is money.

that's somewhat true.  The military keeps the US take on 'world peace' intact, the oil flowing into the right barrels and the money moving into the right pockets, and the various areas that dont cooperate from creating viable economies.

http://www.youtube.com/watch?v=yTbdnNgqfs8

you should be VERY angry at these things.

[bluemeanie1]

This is what the full faith and credit of the government looks like, in real life.

https://en.wikipedia.org/wiki/Executive_Order_6102

yep, could very well happen again.

you can create P2P Gold Currencies using Confidence Chains:  http://www.altchain.org/?q=whitepapers/paper2.html

[Honeypot]

Let's hope rest of the world in their 'miserable existance' can learn to cope with their self-inflicted idiocy that drove them to that point.

Until they manage to get another saddam hussein in power.

Wait, that's not your fault? I thought you were supposed to be a sovereign nation, with sovereign rights. Maybe you only uphold it when US intervenes to clean up your mess.

Also, to OP: How does ANY nation 'back' the power of their currency? Answer that first.

[7Priest7]

Military defends government and allows government to exist, government says USD is money.

The real question is, Could our military defend our land if china decided to foreclose for debts we owe them.
China has overwhelming numbers, any Chinese citizen could be given a gun and told kill or be killed.
China also has the ability to mass produce anything cheaply(weapons included.)
EDIT: China was the first to mass produce a weapon, and they are likely to be the last when they finally decide to take over the world.

bluemeanie1, You should really edit/append your posts.
Having four replies by a single person(with nobody in between) is nonsense.

[CaptainPicard]

Bottom line is USD is ultimately backed by force, by guns, if you live in the USA and you have wealth you need USD to stay out of prison, pretty powerful backing if you ask me, people tend to value their liberty a lot , now you can argue that initiation of force is unmoral all day long , but it is what it is.

Bitcoin is backed by market demand only, all of us promoting it because we believe in it's value as a currency, but this believe is not as rock solid as the power of the US government to force people to use the $

I suppose to you I am forced to steal from jewlery shops because they display wealth something I don't have.

Or maybe I am 'forced' to use USD because I would definitely use fucking rmb or euro instead if I don't want to go to jail in US.

Get over yourself. Always bitching about how you are 'forced' to do something because you are incapable, when that 'forced' party is practically offering gold for 1% of your time on yearly basis.  

Well if you know of a way to not pay taxes and not go to jail  , please let me know  

If you know anywhere a nation that doesn't prosecute you for not paying taxes, you let me know too

In the mean time, try not use gas, electricity, public road, public transportation, and public park, not to mention water and sewage either. You hate things provided by the tax dollars, I think. So funny of you to not take such things seriously when you are sitting pretty bitching about inconveniences in your developed world mentality.

How about no taxes?  BVI.  They have roads too!

[Sweetrevenge]

Well if you know of a way to not pay taxes and not go to jail  , please let me know 

Live with your parents. Or own a home and rent it out to two or three tenants.

[Mike Christ]

It always bugs me when someone tries to say that money is backed by something besides confidence.  It's a simple test:

Money in which everyone has confidence: the most powerful money in the world.
Money in which nobody has confidence: worthless.

A backing that is not itself confidence is just an extraneous layer of confidence, typically used to hide the shakiness of the underlying true money (i.e. fancy paper.)  Bitcoin doesn't need to be backed by math or trust in cryptography or computers, for it is these qualities of the money which give people confidence in Bitcoin; Bitcoin isn't backed by these qualities, it is backed by people who are confident in these qualities, among other qualities of Bitcoin.

With that said, it's semi-accurate to say that BTC is backed by nothing; because we only experience this world through one set of eyes, a person who does not exercise his intuition will be quick to say that BTC is, in fact, backed by nothing, because he has no confidence in BTC; clearly there are people who do have this confidence, but this does not affect the person who exists in a vacuum of himself or those who will confirm his bias.  Likewise, because said person cannot acknowledge what gives money backing, he misattributes his confidence in a currency as backing from Go--I mean, the state.  If the state says "it's good money", their worshiper will reflect this; whether or not it's true holds no relevance.

As another member said, it's not something taught in schools, so it's not surprise that people would say such a thing; but the argument that people are intentionally being kept in the dark is another matter.

[Erdogan]

Words.

Bitcoin is unbacked
USD is unbacked. Force does nothing here.

[luqash3]

You are absolutely correct today we have a faith in USA due to which it is traded in financial market but in case of recession ultimately civilians holding currency shall be burdened with loss not government. So no currency is backed up these days either its bitcoin or USD 

[tabnloz]

In it's entire history I'm not aware of the dollar ever collapsing in value. 

Unlike 3rd world countries, the US has a very good track record in keeping the value of it's currency.

Yes, the dollar has a reasonable rate of inflation (unlike 3rd world countries) but that is not the same as a collapse in the currency.


___________________________________
Get 420 with bitcoins at zeltasgarden.com

The US dollar has lost around 95% of its purchasing power in the last 100 years.

In the 70's its value also dropped significantly with the rampant increase in inflation, I believe the value dropped around 60-70% for a short period.

But to add my 2 satoshis to the thread, the US dollar is primarily backed by trust.

It is trusted that the US will remain stable and not veer to far off the monetary course, that it will operate with the best interests of the economy at heart. Since WW2, the US has taken on the role of the global policeman. Yes, this role, at the most basic level, is reinforced by the size and capability of its army. It also used to be due to its industry although that landscape has changed significantly. The same cannot be said about other countries.

No one doubts the ability of the US to deal with any 'threats' to US dominance (also a part of 'trust'). Invasion of land for ideology (Vietnam) or resources (Iraq)has been a favourite but increasingly the wars being fought are economic (Venezuela, Iran).

Similarly, looking at the Sino / Japanese conflict over a small rocky outcrop in between the two: not so much about the damned rocks, more about economics and power. The real war being fought now is a currency war. The Japanese have abandoned the rest of Asia in a way and killed the Yen. This affects the export markets of China, Korea etc, so there is a lot of military flexing and posturing going on.

[tabnloz]

Military defends government and allows government to exist, government says USD is money.

The real question is, Could our military defend our land if china decided to foreclose for debts we owe them.
China has overwhelming numbers, any Chinese citizen could be given a gun and told kill or be killed.
China also has the ability to mass produce anything cheaply(weapons included.)
EDIT: China was the first to mass produce a weapon, and they are likely to be the last when they finally decide to take over the world.

bluemeanie1, You should really edit/append your posts.
Having four replies by a single person(with nobody in between) is nonsense.

I don't believe China would ever go this way. The main problem for the Chinese govt is to keep its population fed and in employment for without that their power would be at risk. Imagine a couple of hundred million poor hungry people trying to make do. Dumping US Treasuries would cripple the US, probably also the world and definitely the Chinese themselves. What it looks like they are doing, is transitioning away. Deals with Europe, Australia and Russia that aren't denominated in US dollars. Buying gold. Buying farmlands overseas. China has traditionally been a country that wants to keep others out, but slowly it has relaxed its borders & ideologies, however it is a big jump to see it taking over the world anytime soon.

[7Priest7]

The main problem for the Chinese govt is to keep its population fed and in employment for without that their power would be at risk.

The Chinese Government would let them starve to death(possibly mass execute them?), then proceed as usual.
They would censor any criticism.