A related cousin of this is the notion that bitcoin is “backed by” energy. Typically, this comes up when a nocoiner says, “But Bitcoin isn’t backed by anything.” So, in some cases, a well intentioned but wrong Bitcoiner may say, “No, Bitcoin is backed by energy!” But this is wrong.
Generally, when something is “backed by” something else, it implies that it somehow has the support of some other entity, like a government. Historically, people say the U.S. dollar was “backed by” gold, and people could historically redeem notes for gold, but no such thing exists with Bitcoin. So, perhaps a better question to ask is, “What’s gold backed by?” Only then are we getting to the truth of the matter: it was all subjective valuation all along. Beauty is in the eye of the beholder.
Bitcoin As Violence Or A ‘Weapon’
Some people want to frame Bitcoin as a kind of “digital violence” or, more recently, frame it as a weapon and part of a “soft war protocol.” But this is a gross misrepresentation of what Bitcoin is. Bitcoin is more like cryptographic messages being passed around and validated on a network. Surely that is closer to “speech” than a “weapon.” Or, more accurately, bitcoin can be thought of as a rivalrous digital commodity (the first of its kind), operating on an open-source monetary network.
If the pen is mightier than the sword, would it be appropriate to call a pen a weapon? Not really. Also, this whole line of argument is clearly blurring a line between what’s voluntary, and what is initiating aggression (which is the part that’s wrong). How is running a node, adopting bitcoin as a rivalrous digital commodity and participating in the network a form of “weaponry”? This is just gross mischaracterisation. Words mean things.
Some of the analogies and metaphors used in relation to “bitcoin as soft war protocol” relate to miners competing to secure the “chain of custody.” But do they? Or is it really more like Bitcoin nodes are what secure Bitcoin? Miners can’t make invalid transactions appear valid to those who are running and verifying transactions with their own Bitcoin node. So, isn’t it more relevant to think of it like nodes secure Bitcoin? The job of miners is important, but their job is more related to finality of transactions
So, What Is The Real Truth Then?
So, as mentioned earlier, economically speaking, bitcoin is more accurately characterized as a rivalrous digital commodity. Bitcoin is the commodity itself — it’s not a claim on something, it is the commodity itself. When people ask what it is backed by, this indicates they haven’t quite grasped what it is.
If an analogy helps a new person get into Bitcoin and start going down the rabbit hole, that’s great! But as that person advances their knowledge about Bitcoin, additional precision about what Bitcoin is will help us all.
Thanks to my friend Conza for inspiring this article and providing feedback.
This is a guest post by Stephan Livera. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
