What do you mean by “backed” here? I think I’m misunderstanding but I thought (and a short google seems to confirm) that currency A being backed by currency B means the value of A is fixed at a certain amount of currency B, and there is some organisation “backing” this with reserves.
Not trying to shill/defend crypto, just confused on terminology :)
I mean that crypto currencies are essentially the same as stocks. They have no worth on their own, and their value is tied to converting them to other currencies.
And this conversion rate fluctuates constantly. What one bitcoin is worth today is not what it will be worth tomorrow. In order to buy something with a crypto currency, companies have to first check how much it’s worth in fiat currency.
What do you mean by “backed” here? I think I’m misunderstanding but I thought (and a short google seems to confirm) that currency A being backed by currency B means the value of A is fixed at a certain amount of currency B, and there is some organisation “backing” this with reserves.
Not trying to shill/defend crypto, just confused on terminology :)
I mean that crypto currencies are essentially the same as stocks. They have no worth on their own, and their value is tied to converting them to other currencies.
And this conversion rate fluctuates constantly. What one bitcoin is worth today is not what it will be worth tomorrow. In order to buy something with a crypto currency, companies have to first check how much it’s worth in fiat currency.