Dollars are not backed by taxes.
Their value is determined by the imagination of counterparties. If they were backed by taxes, there would be no Fed FOMC meetings to decide what interest rates — or QE — or QT — is to be done. But those meetings do happen and thus, those decisions are largely whimsical.
If they were based on “backed by taxes” there would be no decisions to be made. The decisions would be mechanical and arithmetic and automatic.
But they aren’t. They are dependent on the mood of the FOMC. Its imagination.
So the “bitcoin has no backing” argument fails. Bitcoin’s value is determined by exactly the same mechanism as the dollar’s value — the imagination of counterparties.
the USD is perceived to have value because it’s the world’s reserve currency, said USD currency possessing the three main attributes of any functional currency: store of value, unit of account, and medium of exchange ... during its 14 year lifetime, crypto has aptly demonstrated that it possess NONE of those three attributes ...