this post was submitted on 13 Aug 2023
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Money has value insofar as governments use it to collect tax - so long as there's a tax obligation, there's a mandated demand for that currency and it has some value. Between different currencies, the value is determined based upon the demand for that currency, which is essentially tied to how much business is done in that currency (eg if a country sells goods in its own currency, demand for that currency goes up and so does it's value).
This is not the same for crypto, there are no governments collecting tax with it so it does not have induced demand. The value of crypto is 100% speculative, which is fine for something that is used as currency, but imo a terrible vehicle for investment.
You are right in that it increases people's belief in money because it is the primary source of revenue for states. But if the majority of people did not believe in the piece of paper, it would be worth nothing. That is the fundamental value of money as we know it.
There have been states where stones were the currency simply because the inhabitants believed in them.
Money is a physical representation of the concept of value. Saying "what gives money value" is like asking "why does rain make clouds."
This is why printing money decreases the value of the currency - the value it represents has not changed so the value is diluted across the currency as the amount of currency expands.
I don't know if it's good investment or not, but cryptocurrency has uses that are valuable to a lot of people. You can send money to other people without using a bank or PayPal and you can pay for things online anonymously. Some cryptocurrencies might have additional properties like Monero, which also gives you privacy. NFT might also have practical uses some day - for example it could be used for concert tickets.
Did ChatGPT write your comment?
Do you not have anything constructive to say?
About Bitcoin? Hell no I don't.