Re:Hacker News is more interested in Bitcoin when there's a ...
by clock_tower on Monday July 31, 2017 @06:10PM
(#14896332)
> What does "backed by the full faith and credit of a stable entity" even mean? Why does it matter?
I understand it to meant that the country in question will be a currency-recipient of last resort: the country will always accept taxes paid in this currency, and will use this currency to charge for government services and pay its employees. This ensures that there's always a market for the currency -- something that you don't have a guarantee of otherwise, unless the mode of payment has non-financial uses (like rice, cloth, nails, or cows).
Money is just information, like music. There is no reason it needs to be slow, expensive, or restricted - which all other money currently is.
Bitcoin is better at organizing the information of money than all other existing methods. This (+ scarcity) is what enables it to be valuable.
Specific bits in the bitcoin blockchain are not valuable, as you're stating. There are no individual bits in memory or on disk that have value. They're simply clones of the same distributed information, which is that you have some slice of the pie. It's your ownership of the slice of the pie that is valuable, because it is scarce, and because it is value-information that is fast, cheap, and global.
What does "backed by the full faith and credit of a stable entity" even mean? Why does it matter? Does it have anything to do with the organization of information? It seems like it doesn't.