Backing refers to the idea that a currency is redeemable for some good at a fixed rate as used to be the case for US silver certificates.
I was thinking of it in the sense that there is some underlying thing giving the money value. It could be that it is redeemable for a physical metal, but in the case of Bitcoin it would be the mathematics securing the blockchain.
This is in contrast to fiat which has no backing, or you could say relies on force to back it. When you say that the cryptocurrencies have no backing, it sounds like you are implying they are conjured from thin air like fiat, which is false.
He hasn't responded to me so I don't know what he meant exactly. Another problem with currencies which are backed by physical commodities is you are relying on people being willing to honor that. As governments around the world have shown, being backed by something physical is only true until they change their minds.
I was thinking of it in the sense that there is some underlying thing giving the money value. It could be that it is redeemable for a physical metal, but in the case of Bitcoin it would be the mathematics securing the blockchain.
This is in contrast to fiat which has no backing, or you could say relies on force to back it. When you say that the cryptocurrencies have no backing, it sounds like you are implying they are conjured from thin air like fiat, which is false.
He hasn't responded to me so I don't know what he meant exactly. Another problem with currencies which are backed by physical commodities is you are relying on people being willing to honor that. As governments around the world have shown, being backed by something physical is only true until they change their minds.