Topic: What's the best answer to this question ? "What is its backing? " - page 4. (Read 5340 times)

I mean, that's really all there is to it.  It's backed by a sufficient number of people believing that it has value.

That is the 'labor theory' of value, and is flawed in many ways, athough it does have an intuitive attractiveness to it.  Bitcoin isn't backed by labor, or electic power, or cryptography, or it's userbase, or it's long distance value transfer services.  Historicly, national currencies were 'backed' by gold in the sense that anyone who possesed a unit of currency had the legal and moral right to demand a defined amount of gold from the government agency that produced the currency.  But what backs gold?  The answer is nothing.  Gold is not backed, because it has an independent value.  That value is a matter of perception, developed over a 6K year history of gold as having value.  Bitcoin has value in the same way, meaning it does not require any explicit backing because it's literally valuable in it's own right, just like gold.  It's no one else's liablity, unlike a US$ or any of the payment methods that are based upon it (bank checks, credit cards, PayPal, Google Wallet, Facebook Credits, etc.)  One could make that rational argument that bitcoin derives value because of all of the things that I mentioned in my second sentence, but value is always subjective while a backing is always explict (and therefore, objective) in nature.

After all, as valuable as gold is as a store of value, without that monetary demand gold wouldn't likely be more valuable than lead.  Bitcoin is valuable only due to it's monetary demand, and it has monetary demand because there is a small (but growing) online community of people that believe that bitcoin (as a monetary & exchange system) has and will continue to do as it has promised, and thus see value in participating in that monetary & exchange system.

If they ask you a straight question, give them a straight answer. Bitcoin has no guaranteed exchange for anything else and is thus not technically backed by anything.

Nice sounding wordplay like "backed by freedom/internet/you" just sounds like you're trying to weasel out of it. If you demand backing, then don't use bitcoin or any major world currency.

In Bitcoin, posession is control. Transparency in the number of bitcoins in circulation is total. It can be easily verified.

In the case of electronic gold, it is not known how much gold, or how pure, they store in their vaults because it is not audited. And in electronic gold, posession of the credentials is not control.

your answer is good, but i would answer: its the internet backing, because the only way to destroy bitcoin is to shut down the internet
(backing theyr existence, not theyr value, and as long they exist, they'll have a value (even if it is aproximately zero))

It's backed by freedom.

You misread this, 
"you" means people who are USING it, HOARDING it, DEVELOPING it, SECURING it, SPREADING it.
Actually, It's ture to every single currency on earth that "Users" are backing the currency.

Delicious question, and your answer is good.

A related thought: precious metals are backed by the labor it takes to acquire them, unlike paper currencies. Similarly, bitcoin is backed by the labor it takes to acquire, which is perhaps another way of saying "the people", as opposed to some small manipulative group of politicians/counterfeiters. I think it is safe to ignore differences between machine labor and human labor because precious metals are rarely mined by hand.

There is something very wrong when central bankers make money out of thin air, yet it seems reasonable to me when bitcoin mining does something similar. It's interesting to explore the differences between the two models.

How about this ?
"It's you, you people. "