That’s… not how that works. It runs on supply and demand, just like gold backed currency, but it’s supply and demand for the currency instead of the underlying asset. If you want to control inflation/deflation, fiat is the way.
Comment on Anon describes currency
Zenoctate@lemmy.world 1 month ago
I can’t believe that Dollar (or any other currency) isn’t backed by anything and runs on hopes and believes
sugar_in_your_tea@sh.itjust.works 1 month ago
Zenoctate@lemmy.world 1 month ago
Well I didn’t really gave much of a thought when writing. I was narrowminded. This makes sense
Alexstarfire@lemmy.world 1 month ago
Anything is only worth as much as someone else wants it. Everything comes down to supply and demand. Currency is just a medium so you don’t have to trade fish for lumber in order to trade the lumber for some bacon. Also, pretty convenient to be paid in currency instead of fish, lumber, or bacon. You can use it to directly buy/get what you want.
If no wants to buy or sell the currency then it’s a pretty worthless currency. That’s why you can’t just crate your own currency and buy things with Bob’s Bucks.
FireRetardant@lemmy.world 4 weeks ago
This is why Ricky had it right with his hashcoins. He could treat them as currency and exchange them for goods, the other party could then do the same using it as a currency, or just smoke the hashcoin as if it were a good.
Kolanaki@pawb.social 1 month ago
It used to be backed by gold until 1971.
DahGangalang@infosec.pub 1 month ago
And what was the gold backed by?
untakenusername@sh.itjust.works 1 month ago
being deflationary I think
Kolanaki@pawb.social 1 month ago
Greed.
RowRowRowYourBot@sh.itjust.works 1 month ago
And moving away from backed currencies has increased economic stability.
BakerBagel@midwest.social 1 month ago
Only officially. The US effectivly dropped the gold standard in 1933 because it was making the Great Depression worse. Money was completely stagnant, and the federal worl projects FDR championed to get the economy moving again couldn’t be funded when the government couldn’t get access to more gold.
anothercatgirl@lemmy.blahaj.zone 1 month ago
Currencies often run on tax law. If you earned and produced and imported valuable goods or services, you have to pay tax in your local country’s currency.
chicken@lemmy.dbzer0.com 1 month ago
I think the other answers people are giving are wrong. It’s backed by debt and the enforcement of that debt.
lurch@sh.itjust.works 1 month ago
they used to back it with gold, didn’t they? gues nixon ran out while the printing press went brrrrr
RowRowRowYourBot@sh.itjust.works 1 month ago
The USD is backed by the American economy.
Gladaed@feddit.org 1 month ago
That’s reductive.
It’s backed by the economic and militaristic might of the issuing country.