Hacker News Reader

Comment by JonSkeptic | Hacker News Reader

The Zimbabwean dollar analogy is appropriate. Throughout its wild swings and hyperinflation, it was backed by a government. Bitcoin is backed by nothing at all.

One is a currency, the other is a commodity.

View on HN

How do you establish a new currency? Well it is easy, you take control over some area of land, by military force or by treaty with the present occupiers of it, then you declare that the people living there need to pay you taxes, then you decide what to accept those taxes in. And that's what it means for a government to "back" a currency.

Considering all of the uproar caused by the Newsweek article, if people knowing you have bitcoins puts you in danger, then I'd say it's not a currency I want anything to do with.

Yeah, if everyone knew I had £1,000,000,000.00 hidden under my mattress (and some mattress that would be), then I imagine my life might be under a little more threat than otherwise too.

Let's say you have 400 MUSD, or a ton of gold, and it becomes widely known.

Err, it is widely known, google "world's richest people". The difference is, as your sibling post pointed out, those people don't have it hidden under a mattress.

Fiat is only "backed by government" in the sense that you're forced to obtain it to pay debts and taxes. Other than that, the Fed can print more to prevent deflation and the Government can act politically to try and stem inflation. There are limits to that control.

Reply on news.ycombinator.com