To be fair, most fiat currencies today are effectively pyramid schemes with how the 'assets' in question (paper bills or numbers on a screen) only have value because people think they have value and they think they'll be able to purchase goods with it. The only difference between fiat and crypto is that fiat is often backed by people that can print more money/manage the supply, and integrating crypto into daily lives is a tall ask when the transaction fees can cost more than the amount of currency traded via that transaction.
I’m not OP, but they could simply ask you to prove the USD is backed by anything beyond confidence since the removal of the gold standard.
Not saying everyone should jump into crypto, just be aware that most things without physical value are based on confidence. Which I’m sure you understand.
The USD is backed by 11 nuclear aircraft carriers, 68+ nuclear submarines, 8725+ tanks, 1,359,685+ military service members, a police force and one IRS that makes damn sure taxes are paid in USD or "damn would be a shame if the governemnt took your home/car/freedom away"
That’s actually a really solid and novel argument and you might have changed my opinion here (give me some time to think about it). The USD is backed by the military not by gold.
The late David Graeber helped shape grounded ideas on money. His book entitled "Debt: The First 5000 Years" cover the topic, but he also discusses the core ideas in interviews freely available on YouTube.
Why does everyone get so hung up on the gold standard? What intrinsic value does gold have? 8% mined each year goes to technology and industrial use cases, that has value, and most importantly creates more value. The rest is people saying "Oh shiny", which has a less real connection than a paper note where obligations are traded and met.
Sure, but they could simply prove that the USD is backed by trillions of dollars of USD-denominated debt and tax bills which other people need to meet obligations. The confidence that implies is significantly different from the confidence implied in "number went up after going down last year"
> The only difference between fiat and crypto is that fiat is often backed by people that can print more money/manage the supply
This is really not the only difference. As Elon Musk recently said, the government has a "monopoly on violence" and acts as an authority that arbitrates disputes (up to and including between countries), works to ensure proper controls and regulations through laws, etc., all of which helps to underpin the value of the currency. Cryptocurrencies are backed by no central authority with these powers.
In substance, it goes back to the original philosophers of the modern state: Jean Bodin and Thomas Hobbes. That was in the 16th and 17th century.
Also important is that the state has a monopoly on legitimate violence. It has social license by virtue of exercising violence to uphold social order. In the case of the economy that means its macroeconomic management to ensure stability and the public good. Clearly crypto woefully fails by that standard.
It's true, although the fact that musk personally said it is still relevant in the sense that he is for whatever reason a major mouthpiece in the crypto space that some people seem to respect.
