Whether it’s the euro or Bitcoin, both forms of money rely on belief and acceptance. Fiat money depends on trust in central banks and governments. Cryptocurrencies rely on trust in technological infrastructure, math-based protocols, and global communities.
The claim that cryptocurrencies are “worthless because they’re not backed by anything” is misleading. It overlooks the reality that our everyday money is also not backed by tangible assets. Both are abstractions built on confidence in systems – just different systems.
Fiat Money vs. Cryptocurrency – A Quick Comparison
Feature | Fiat Currency (e.g., Euro, Dollar) | Cryptocurrency (e.g., Bitcoin) |
Issuer | Government / Central Bank | Decentralized network |
Backing | Trust in state institutions | Trust in technology and code |
Physical asset backing | None (no gold standard) | None |
Supply control | Centralized monetary policy | Programmed supply (e.g., capped) |
Use cases | Everyday payments, taxes, savings | Online transactions, DeFi, investments |
Stability | Generally stable, but inflation-prone | More volatile, influenced by market cycles |
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