> Fiat currency holds value because it is backed by a sufficiently large group with guns.
Yep that's what I said: payment of taxes.
> Crypto currency holds value because it is backed by a sufficiently large group with encryption.
I disagree. There is no reason for bitcoin to hold its value. Miners expend real resources (which they pay for) to obtain bitcoin because they speculate that someone will pay more for it further down the line.
People buy bitcoin for the same reason.
The price of bitcoin could go to zero without any compromise of the underlying encryption.
The purchasing power of a currency issued by a soevereign can only go to zero as a result of the collapse of sovereignty (ie. no more guns, or being outgunned). This is the very definition of hyper inflation in terms of a currency: when a government cannot provision itself in exchange for that currency.
Now what makes bitcoin special and different from any other coin? Take something like Litecoin, far below previous peaks. Surely it is not worse with encryption than bitcoin?
Yep that's what I said: payment of taxes.
> Crypto currency holds value because it is backed by a sufficiently large group with encryption.
I disagree. There is no reason for bitcoin to hold its value. Miners expend real resources (which they pay for) to obtain bitcoin because they speculate that someone will pay more for it further down the line.
People buy bitcoin for the same reason.
The price of bitcoin could go to zero without any compromise of the underlying encryption.
The purchasing power of a currency issued by a soevereign can only go to zero as a result of the collapse of sovereignty (ie. no more guns, or being outgunned). This is the very definition of hyper inflation in terms of a currency: when a government cannot provision itself in exchange for that currency.