In Canada, the dollar bill is backed by mortgages (National Bank).
The value of the property is held fairly steady based on the governments assessment (MPAC is the organization for us). So ... since the government controls the valuation of the properties and the dollar is backed by valuation of those same properties, in a very basic sense, the government is controlling the value of their own currency. But then, they are also allowed to control how many bills they print and put into circulation.
Cryptocurrencies generally are backed by intellectual property. As you mentioned, this is tough to estimate a value. But unlike fiat currency, they specify in their white papers how many coins will be generated and at what frequency.
I tend to invest my money in the fiat markets (conservative) but chose to build some Ethereum miners to generate my own supply of free cash flow that I can play in the crypto markets with.
Thanks for the insight on how this works in Canada. A steady property market seems beneficial to me. In the Netherlands we have large swings in property prices and in the end this only results in uncertainty.
Intellectual property is a huge part of the value as most cryptocurrencies do not generate a flow of cash (cryptocurrencies) yet. The difference between a security and a utility is also very interesting. Marketcap, etc.. as well
To be continued...