Is Bitcoin Backed By Anything?

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In this video, I discuss whether Bitcoin is backed by anything, in the context of the history of money. Like fiat money and gold, Bitcoin is not backed by anything.

New forms of money emerge when users converge on them for their superior monetary properties (scarcity, durability, portability, divisibility, fungibility, etc). This was how gold demonetized seashells and copper, and also how Bitcoin is in the process of demonetizing gold.

In the future, due to Bitcoin's superior monetary properties, I expect Bitcoin to be used as the primary global reserve asset that is used to settle trade imbalances. Bitcoin is highly suited for this function because it is a neutral asset that is not issued by any nation-state and that cannot be controlled, confiscated, or debased by any actor.

Gold has a 10,000 year history as money, but so did horses for transportation-- until the automobile came along. Bitcoin is at least a 10x improvement on gold, and has been stealing market share as a result. Expect Bitcoin to continue to eat the world.

Not investment advice! Consult a financial advisor.

$10 gold certificate:

Qaddafi, gold, and crude oil:

Wampum as legal tender:

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#bitcoin
#crypto
#gold

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[Bitcoin_University]

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[selfreliantfarmer]

Just want to say that I really appreciate the written slides layered over the talking. It makes your videos watchable during all occasions, unlike most channels.

[genemaurillo]

Made things crystal clear. I also like the analogy of the horse replaced by the car in 10 years after 10, 000 years.

[SuperheroArmorychannel]

Matthew, This is by far the best video you’ve ever made on the comparison of gold to bitcoin! Very factual, logical, honest and unbiased. I hold both bitcoin and gold and i cannot refute anything in this video. Bitcoin is a better long term store of value (5-10 years minimum) whereas gold holds it’s value relatively well compared to dollars so that in the event of a huge life emergency where i need a sizable amount of fiat, i can dump the gold without losing massive purchasing power, whereas bitcoin could potentially be down 20-80% if/when i have a life emergency where i need quick cash, for example: medical problem, disability, loss of job, loss of income, business opportunity, large purchase, etc. I agree that gold will eventually be completely de-monetized and bitcoin is absolutely the best candidate for a FAIR world reserve currency but i think we are at least a generation away from this happening. I say this because i still encounter lots of people who have no idea what bitcoin is. They know the name but have zero understanding of what it is or how it works. Mass adoption is a LONG LONG ways off. Thanks for the honest and educational video!

[gusgalvanini]

My grandchildren will tell me one day; "Thank you for the Bitcoin"...

[petervincenzo]

Matt, I am so thankful you were my first intro to bitcoin I've dodged a lot of bullets because of it

[dgunn]

A little bit of gold and silver is a good thing for a SHTF situation. But definitely not a great store value anymore. Great video.

[thinkblue]

I have a 1957 dollar bill. It says silver certificate at the top instead of federal reserve note. Cool piece of history.

[AlexMirkhani]

Would be interesting to also include a price point at the end for if Bitcoin becomes the global money base (in addition to Gold Market cap/UST price points)

[omdthe]

To quote saylor it's backed by energy, cryptography and the network.

[Shizomis]

When I hear that classic intro my anxiety lowers. Always on the money Matt, thx for being so consistent

[ndrw]

I am now 5mins deep and this is masterpiece.

[toms]

One of your greatest videos, IMHO this covers most important aspects. I wish this was animated and brought to Netflix as documentary

[realjackwhalen]

I like the comparison of horses and cars--- Relied upon for so may generations then completely abandoned inside of 1 generation--once a better alternative came along. Great work thanks.

[pka]

MK you constantly step on every comment about Bitcoin know to mankind. Keep stepping.

[hansyounga]

So much packed into this. Great review of what money is and very important tie in to gold/btc argument!

[justinjacobson]

Robert Breedlove's "Masters and Slaves of Money" is a great series on a lot of these points as well.

[dimitarzlatanov]

Matt, I've been waiting for you to cover this topic since forever, and you didn't disappoint. Literally one of your best videos to date, if not the best. I can't tell you how many times I've heard the argument "it's not backed by anything". Now I can just refer to this video to any sophisticated self proclaimed expert on monetary science, although most of them seem lost beyond hope. Keep up the good work and continue to educate people.

[bowedpsaltery]

Hi Matthew, love your channel! It would be wonderful if the recording gain could be turned up so the volume for your audience is really clear. I like to work around the house and listen and I'm tethered to the computer to hear you :)

[kevinl]

Thanks Mathew.Good one I hope this one gets a lot of views.