Primer on Fiat Currencies
Fiat currencies such as the US Dollar, Australian Dollar and British Pound Sterling are the government issued infinitely reproducible representation of value backed by the threat of punishment.
They used to be based upton physical value such as gold and other precious metals but this has not been the case since the early 1970s.
So far fiat currencies have lost over 90% of their value on average and have been undergoing hyperinflation since 2008.
Cryptocurrencies and Cryptocurrency Networks
Cryptocurrencey Networks are value transfer networks, which is to say that they allow the transfer of actual value rather than the representation of value in stark contrast to the legacy banking system and it’s affiliate networks.
Cryptocurrencey tokens/assets which behave as stores of value on these networks offer great advantages over their corporeal counterparts (gold/silver) such as being non-inflationary, weightless, impossible to cease/steal and be beamed through air/space at the speed of light at zero or near zero cost.
Value
Much like gold requires investment, hardware such as heavy machinery, expertise, time, risk and effort to be mined out of the ground so too do cryptocurrencies.
To derive tokens on a network requires expensive single purpose hardware, heavy initial investment, expertise in what is currently a very niche industry, considerable risk and in some cases millions of dollars worth of electricity per day to perform the necessary computations needed to secure the network.
A common misconception is that non-physicality implies non-existence but that is not the case. Virtual tokens may not be corporeal objects but they certainly have a reality and value but in a way that may not be familiar initially or immediately obvious without further reflection.
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