This is the future of cryptocurrency
Gold: The U.S. dollar was backed by gold before 1971.
If you had a wad of U.S. dollar bills and wanted gold, you could simply go to the Federal Reserve and exchange your dollars for a fixed amount of gold. This was called the “gold standard,” and it was widely used before the two world wars.
The idea is simple: without this backing, the currency becomes just a wad of paper. It’s nice to get something better than a wad of paper in return, but it has no intrinsic value. After 1971, no country implemented the gold standard; they were all replaced by something completely different: trust.
The reason a dollar, euro, yen, or any other currency has value is because someone makes it legal tender, as a means of settling taxes and debts within their borders, and because you trust those governments not to take illegal action, like printing large quantities of these bills to turn them into mere wads of paper.
Cryptocurrencies are also cryptocurrencies, not fiat currencies. They are like other fiat currencies - but without the backing of a state. The only reason it has value is that it can find other people to buy it, in the hope that more will buy it to drive up its price. This is the dynamic of a pyramid scheme.
You can get rich with one, but don't rely on it.
