Determining the meaning and value of the cryptocurrency
By Kurt Leyendecker
I am confused. Very confused. You see, I had a silly idea to write an article about the trademark rights associated with BITCOIN. I think I have less of an understanding of all things Bitcoin now than I did before I began my research. The problem at its core is that money and currency in any form is very complicated that almost all of us take for granted. We go about our lives blissfully, never thinking about the deeper constructs of money. Currency is an abstract, intangible idea. It can be represented in the form of paper or coinage, but much of it is transferred back and forth daily among people, companies, banks and governments, simply by changes of notation in ledgers. We trust currency is worth what it says it is worth, understanding that the currency is backed by the full faith and credit of the issuing government. With some extreme exceptions, as long as the United States exists, the U.S. dollar isn’t going to fail – though, its value may fluctuate.
Virtual, or cryptocurrencies, such as Bitcoin, are different than so-called fiat currencies; virtual currencies are not backed by any government. In fact, they are not backed by any one entity at all.
So, how are they backed?