Did we go back to the gold standard during the writing of this comment? Last time I checked there wasn't any backing of fabricating new dollars except for the sheer trust in the US government.
This is not a problem when the promises of a nation state only need to last as long as the nation state itself.
I’m not sure how that’s useful. The capability to produce goods and services seems a whole lot more real to me in terms of value than gold (the value of which would collapse anyway if modern economy did).
In theory can have currencies directly backed by oil, wheat or copper if you don’t want fiat for some reason. Would still be more ”real” than gold.
> only need to last as long as the nation state itself.
1$ from the 50s is not worth much in the 80s and even less today. Seems like that should be a much bigger concern than the longevity of the state itself.
That is to some degree what USD is ("Petrodollars"):
https://www.investopedia.com/articles/forex/072915/how-petro...
Wow that’s compelling.
> except for the sheer trust in the US government
Oh, you mean “except for” the single most powerful entity on planet earth
If you open that can of worms I think the question will very quickly be whether such an asset class should just be outright banned.
To me it’s still an open question if cryptocurrencies are inherently a (distributed) scam. At least the ones based on proof-of-work.
Both cash and securities are regulated in a way that ties them to the creation or storage of (real-world) value. Proof-of-work cryptocurrencies ties both the creation and trade of the asset with destruction of value (energy). Which inherently makes them toxic. Regulating cryptocurrencies to become non-toxic might make them de-facto illegal.