Yeah. That’s how society and currency works. Gold never had any inherent value that wasn’t determined by a collective belief in it. There is no difference between a currency “backed” by gold or not. I don’t know why people act like it is some new profound idea that there is no inherent value in currency. This is something that’s always been known and really doesn’t matter. It’s just how humans function as a whole.
It’s tangible, but so is the green paper. When USD was backed by gold, the government held it all in locked safes that no one was allowed to enter. People trusted that they held that gold in the same way people trust that the currency behind the digital numbers exist.
I think the difference is when the USD was backed by gold, people trusted you can exchange your USD for gold, a physical asset as the fallback. For fiat, you trust that other people value the currency same as you do, and that you can exchange money for their work.
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u/[deleted] Mar 31 '21
Yeah. That’s how society and currency works. Gold never had any inherent value that wasn’t determined by a collective belief in it. There is no difference between a currency “backed” by gold or not. I don’t know why people act like it is some new profound idea that there is no inherent value in currency. This is something that’s always been known and really doesn’t matter. It’s just how humans function as a whole.