Reply to post:

$67M in bitcoin stolen as hacking typhoon lashes Hong Kong's Bitfinex

Doctor Syntax Silver badge

"They don't hold significant gold or reserves to back them up. Not since the end of the gold standard decades ago anyway....The differences between virtual and traditional currency is less than many people think though!"

Gold as a means of backing up currency worked because it was a substance in limited supply which everyone agreed to treat as valuable. Fiat currencies came about because the essential agreement failed. Bitcoins were devised to be limited in supply. The essential difference between them and gold is that they're virtual, not substantial. As "traditional" currencies are now fiat currencies the virtual currencies are more similar to the now obsolete gold-standard currencies.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2019