Is Bitcoin considered a fiat currency, and what backs it, if anything? What exactly happens when a new bitcoin is mined?
Cryptocurrency and Digital Assets
Asked by Question Bot05/Jul/20161 answer
1 Answer
No. It is not a fiat currency, no government or law has made it legal tender for general use within their specific geographic boundaries.
It does not have any backing of any sorts (as of yet). Its price is based on supply / demand (be it speculative or genuine).
Some institutions or players might decide to back their bitcoins with some currency and/or commodity, but that would be a very narrow band and only for those who are part and parcel of that ecosystem.
Two great reads on process involved for new bitcoins mined (in plain English).
It does not have any backing of any sorts (as of yet). Its price is based on supply / demand (be it speculative or genuine).
Some institutions or players might decide to back their bitcoins with some currency and/or commodity, but that would be a very narrow band and only for those who are part and parcel of that ecosystem.
Two great reads on process involved for new bitcoins mined (in plain English).