RE: People don't understand money. We really should. We really should try to explain it super simply.
Nobody understands money because nobody understands the nature of this reality.
This reality is a hologram, a simulation, a "virtual reality". It is a programmed reality based on information. One such piece of information is the nature of "currency". It's like when programming a game, where you must create the in-game currency.
Gold and Silver were the hardcoded "constants" of what money is in this reality domain by the "reality programmers".
Then came along the Elite who wanted to hoard the real money, which was too valuable to be left to the common people as currency, and replaced Gold and Silver with fiat currency.
And then came Satoshi. Satoshi was the man who emulated the reality-programmers by programming a new form of money within this reality domain.
We could say that up until the fiat system (including the fiat system), the hardcoded constants were honored. The Elite were honoring them, indirectly, because their motivation for using fiat was to keep their purchasing power to acquire Gold & Silver. If money was Gold, then they would need Gold to buy Gold - and that doesn't lead to more accumulation. So they needed the fiat scam (using paper to buy more Gold).
The programmed money of Satoshi was a radical departure from both the hardcoded money constants and their fake supplicants (fiat). Predictably it will face all sort of opposition as it moves forward. One does not simply "revolt" against the programmed rules of the "game".
Long before people used silver and gold, they used sea shells or other found objects. In fact, when gold was first used by a king who needed an easy way to pay his army, he had to personally guarantee that a certain amount of gold would be worth a certain amount of livestock.
Money, in all it's forms, is nothing more than an agreed upon means of storing and transferring value.
It's actually somewhat amazing to me that Cryptocurrency backers and users still think money needs to be backed by gold. Steem isn't backed by gold, so why do you think the USD needs to be?
These objects were always used in the context of a small society and had no universal standing among humans due to geographical and other differences. A mountain tribe for example would use furs or something similar instead of seashells.
Money, in the context I'm describing it, exists as pre-programmed "information" in our "virtual reality program". If you see a cat that is 2 months old, it tries to dig the ground before it poos. This is preprogrammed information. Nobody taught the kitten to do that, not its mother, not the TV, not a book. Likewise humans were hardcoded for using gold by the "programmers" of this reality.
As for cryptocurrency getting backed by gold, I'm not supporting that idea. Crypto is typically supported by energy, just as precious metal extraction. POS is kind of different and hence has some flaws.
The USD needs or doesn't need to be backed, depending on your "caste". If you are the Elite, it doesn't need to be. That's how you make the poor people poorer by debasing the money and using paper to buy all tangible assets and actual money (gold and silver). If you are among the non-Elite, it is in your interest for money to be backed by gold because that's what preserves your wealth and disallows the Elite to print money out of thin air.
Plus, the debt-based system ensures that society will go bankrupt in the long run. You issue 1 trillion and you want it back with an interest, say 1trillion plus 10 billion (1%). The 10 billion extra obviously don't exist. So you'll need to borrow again, and again and again, because the monetary supply is always less than the debt accrued for its issuance and thus prevents its repayment with money. So what will you repay with? Your assets. Fiat money is thus an asset of wealth confiscation due to its issuance as debt. And that's aside from the problem of inflation and printing money out of thin air.
" Likewise humans were hardcoded for using gold by the "programmers" of this reality."
Except no, we weren't. That's why gold originally had to be backed by livestock.
"As for cryptocurrency getting backed by gold, I'm not supporting that idea. Crypto is typically supported by energy"
Exactly, no one needs it to be backed by gold. There's no programming saying we need gold.
I never said crypto to be backed by gold. It's a new class of money where humans have created a new program within the program and that this will predictably face opposition.
Now, regarding gold backing in fiat, as the topic says, people don't understand money. If they did, they wouldn't accept scam paper money or be ...critical of gold. If they understood the system they would also understand that the fiat system is unsustainable since it creates an ever expanding debt-bubble because fiat money equals debt and further debt creation, which is not sustainable in the long run.
An unsustainable monetary system obviously can't endure competition and that's why gold purchases were banned in the 70s and the gold markets have been suppressed since the 80s. Still people who had gold post-bretton woods went 30x in net worth compared to people with fiat. This wasn't by accident. One was bullshit money, the other was sound money. How could bullshit money ever compete with sound money?
"Because gold is honest money it is disliked by dishonest men." - Ron Paul.