All currency is backed by “nothing” except the imputed value of people who decide it is reliable as a means of exchange. The utilitarian value of gold is less than 1/10 of its market value were it not an acceptable means of exchange. There is no such thing as “instrinsic value” in currency.
The worse part of this is of course that the people never decided to accept pictures of paper with dead politicians on them. That was a “fiat” decision by the state. In the long run, anything that challenges this fiat will do well.
Yep. The cycle of acceptance is what gives anything its value as a medium of exchange.
The only reason I will accept pieces of paper with pictures of dead presidents on them in exchange for my labor is because I know others will accept those pieces of paper as having value.
The same goes for a lump of shiny metal like gold or shiny rocks like diamonds, emeralds, rubies, etc.
These things are not very useful. They’re just not. They don’t have much intrinsic value. If other people would not accept them as having value, how much shiny metal would you want to hold? The whole mystical tangible argument “but I can hold it in my hand! It has weight, therefore its valuable!” argument is laughable.