How is Bitcoin backed?
In 1971 R. Nixon terminated converting the US Dollar into gold which is described in economics as Nixon Shock. The new economic policies eventually led to the collapse of the Bretton Woods system of fixed exchange rates that went into effect after World War II.
Today none of the countries accept gold as a precondition of strengthening of currency. The reason is that currency can be weakened further.
Over 2 years there are 6 trillion US Dollars printed out which makes a trend that globally all currencies will end with weakening. Ongoing war between Russia-Ukraine followed by Russian government rejection from US Dollar as well as Turkey’s strict economy policy led to decreasing of the US Dollar power.
So, what is behind the power of the US Dollar? Oil — Petrodollar. What causes USA’s intention to get involved in conflicts? The answer is to enlarge the monopoly of oil and avoid disruption of trend -buying and selling of oil in US Dollar.
If the US Dollar gets weak, what would be an alternative to buy oil? Crypto. The only currency capable of retaining its power would be Bitcoin which is supported by different aspects.
We all have a lamp in our room. If the lamp is shining, we have to pay the bill. Why do we pay the bill? In order to bring light into the dark room. It’s no longer a suprise that, electricity necessary for earning 1 Bitcoin equals to electricity usage of little European countries (Austria, Switzerland).
Miners that generate 1 Bitcoin utilize the following resources: electricity, personnel, technical equipment, funding for refrigeration (Recently people started moving to Iceland and Norway for this very primary reason).
Let’s come back to the lamp. All those efforts described above and light energy as well are now accumulated in one thing — Bitcoin. Bitcoin has been converted in light that is the outcome of energy and money spent in the past.
Now I have a question: Will you sell in that way generated Bitcoin cheap?? So how is Bitcoin backed? Answer — by processes. Bitcoin is math rather than just currency.
