Understanding Cryptocurrency: What Backs Digital Assets?

Conceptual representation of cryptocurrency backing types

Intro

In the ever-evolving landscape of finance, cryptocurrency has emerged as a formidable player, capturing the attention of investors, educators, and tech professionals alike. While many are eager to dive into this digital currency revolution, a fundamental question steers the conversation: What is cryptocurrency backed by? Understanding this foundational aspect is vital for anyone venturing into the realm of digital assets.

Cryptocurrencies can take multiple forms, each with distinct backing mechanisms that influence their value, stability, and trustworthiness. From fiat currencies to commodities and algorithmic structures, the underpinnings of crypto shine a light on the complexities involved in its trading and investment. This exploration seeks not only to clarify these various types of backing but also to elucidate how they impact investor confidence and market dynamics.

As we sift through the intricacies of this topic, we aim to provide readers with a comprehensive guide that demystifies the fundamentals of cryptocurrency. So, whether you're a seasoned investor or a curious learner, hang tight as we set the stage for understanding the backbone of digital currencies.

Prologue to Cryptocurrency

Cryptocurrency has emerged as a groundbreaking development in the financial world, presenting a unique blend of technology and finance. Its significance lies not just in being a digital form of currency but in revolutionizing how we think about money, transactions, and value exchange. Understanding cryptocurrency is essential for anyone looking to navigate today's rapidly evolving economic landscape. With traditional financial systems facing challenges, cryptocurrencies offer alternative solutions that are decentralized and transparent.

The rise of cryptocurrencies questions conventional definitions of money and ownership. As digital assets, they introduce a new paradigm where currency is not backed by centralized entities like governments or banks. Instead, cryptocurrencies often rely on complex algorithms, cryptographic techniques, or commodities for their security and legitimacy. This shift paves the way for innovative financial products and investment opportunities.

Moreover, for investors, educators, and tech professionals, grasping the foundational aspects of cryptocurrencies is crucial for making informed decisions. Knowledge about how cryptocurrencies function and what underpins their value can lead to more insightful strategies in investing and utilizing these digital currencies.

Key Points Worth Considering:

Dynamic Landscape: The cryptocurrency ecosystem continuously evolves, with new coins, technologies, and regulations shaping its future.
Investment Insights: Understanding different cryptocurrencies can inform better investment choices and risk assessments.
Technological Implications: As blockchain and cryptocurrency intersect, professionals must stay abreast of advancements to maximize opportunities.

It’s clear that to fully engage with the world of cryptocurrencies, one must start by understanding their definition, origins, and progression over time.

Defining Cryptocurrency

Cryptocurrency can be defined as a digital currency that uses cryptography for security. Unlike traditional currencies, which are issued by governments, cryptocurrencies operate on decentralized networks based on blockchain technology. This foundational structure allows for secure and peer-to-peer transactions without the need for intermediaries, like banks.

Several features distinguish cryptocurrencies from fiat currencies:

Decentralization: Cryptocurrencies are not controlled by any single entity, making them resistant to government interference or manipulation.
Transparency: Every transaction is recorded on a public ledger, ensuring accountability and traceability.
Anonymity: Users can maintain a level of privacy, with identities concealed behind cryptographic addresses.

Understanding these characteristics sheds light on how cryptocurrencies redefine financial interactions and empower individuals worldwide.

The Evolution of Digital Currencies

The journey of digital currencies began well before the emergence of Bitcoin in 2009. Early forms, such as e-gold, offered a glimpse into the potential of online monetary systems. However, these initial attempts were often centralized and faced regulatory scrutiny.

The advent of Bitcoin marked a pivotal moment, as it introduced the concept of a decentralized digital currency backed by blockchain technology. Over the years, numerous altcoins have followed, each aiming to address limitations of Bitcoin or introduce novel features. Some notable milestones in the evolution of digital currencies include:

Bitcoin's Introduction (2009): The first cryptocurrency paved the way for others and ignited interest in blockchain technology.
Smart Contracts with Ethereum (2015): Ethereum expanded the horizon of digital currencies by enabling programmable contracts.
Stablecoins Emergence (2014 onwards): These cryptocurrencies aim to provide price stability by being pegged to traditional assets or currencies.

Knowing this history not only illustrates how far we have come but also prompts discussions about future potential and challenges. With each innovation, new questions about security, scalability, and regulation emerge, shaping the landscape of digital currencies.

Understanding Backing in Cryptocurrencies

Understanding the backing of cryptocurrencies is essential in comprehending their value and reliability in the digital finance sphere. Backing can significantly influence public perception, market performance, and the overall trust users have in these digital assets. In essence, the backing serves as a form of security or value anchor that reassures investors about the stability and credibility of a cryptocurrency. This section aims to unpack the nuances of backing in cryptocurrencies, highlighting its relevance and implications.

What Does Backing Mean?

When we speak of backing in the context of cryptocurrencies, we refer to the mechanisms or assets that support or bolster their value. Unlike traditional currencies that are usually backed by physical commodities such as gold or silver, many cryptocurrencies exist in a digital vacuum. Their value could be derived from various sources, such as:

Fiat currencies: These are government-issued currencies like the US Dollar or Euro. When a cryptocurrency is fiat-backed, it means each unit of the crypto has an equivalent in fiat—like Tether (USDT) pegged to the US dollar.
Commodities: Some cryptocurrencies are linked to tangible assets such as gold, oil, or even real estate. This type is seen in projects like Digix Gold Tokens (DGX), where each token represents a specific amount of gold.
Algorithmic backing: This varies and is not tied to any asset directly. Instead, its stability is maintained through algorithms that adjust supply based on demand. An example is Terra (LUNA), which uses smart contracts to balance supply and demand in the market.

Understanding what a cryptocurrency is backed by can clarify its potential stability. For instance, if a digital token claims to be backed but lacks transparency in its reserves, it might raise eyebrows and distrust among holders.

The Importance of Backing Mechanisms

Visual comparison of fiat-backed and commodity-backed currencies

Backing mechanisms play a pivotal role in determining a cryptocurrency's resilience and usability in the wider market. The stability afforded by these mechanisms enables investors to gauge risk and make informed decisions. Here are several key reasons illustrating the importance of backing mechanisms:

Trust: A clear backing mechanism fosters confidence among users. For example, if people know that a cryptocurrency is backed by a certain amount of gold, they tend to perceive it as a safer investment, especially in volatile markets.
Market Value: The backing influences how the market values a currency. Take Bitcoin, for instance. While it is not backed by any physical asset, its value is driven by scarcity and acceptance. In contrast, fiat-backed currencies often maintain a more stable market price due to the tangible reserves they represent.
Regulatory Compliance: Many crypto projects adhere to regulations that ensure their backing is transparent and legitimate. This compliance is crucial for gaining acceptance from both users and regulators, which in turn affects the price and market stability.
Volatility Management: When cryptocurrencies are backed, there is an inherent mechanism for maintaining stability during turbulent market conditions. This can be especially important during abrupt price drops when backed assets can prevent value from plummeting uncontrollably.
Investment Strategy: Investors often consider the backing mechanism when crafting their portfolios. Understanding whether a cryptocurrency is backed by fiat, commodities, or algorithms helps investors assess risk and potential returns accurately.

Additionally, backing can shape the narrative around a cryptocurrency, defining its utility, market acceptance, and even its intended use case. As the cryptocurrency landscape continues to evolve, grasping the intricacies of backing becomes crucial for anyone engaged in this space.

"Backing mechanisms are not just about assuring value; they are integral to the identity and trustworthiness that cryptocurrencies carry in the modern financial system."

In summary, the backing of cryptocurrencies significantly impacts how they are perceived, traded, and utilized. Grasping these elements sets an essential foundation for understanding their role in the digital economy.

Fiat-Backed Cryptocurrencies

Fiat-backed cryptocurrencies represent a significant segment of the digital currency landscape. These digital assets are tied to traditional currencies, providing a sense of stability and trust for investors and users. Unlike some cryptocurrencies that may exhibit unpredictable behavior, fiat-backed versions typically mirror the value of their underlying fiat currency, creating an essential bridge between the traditional financial world and the emerging blockchain ecosystem.

Understanding Fiat Currency

Fiat currency—paper money and coins issued by a government—has no intrinsic value but is accepted as a medium of exchange due to government decree. This trust in fiat arises from governmental backing and the regulated banking system. For example, the US dollar or the euro are prominent fiat currencies used worldwide. Their value is maintained through monetary policy, which can be influenced by various factors, including inflation rates, interest rates, and overall economic stability.

When it comes to cryptocurrencies, a fiat-backed token is designed to maintain a one-to-one value relationship with its corresponding fiat currency. Such tokens often reside on public blockchains, providing transparency and security, assuring stakeholders that their investment hasn't just disappeared into thin air.

Examples of Fiat-Backed Cryptocurrencies

Several cryptocurrencies have emerged that exemplify the fiat-backed model:

Tether (USDT): Perhaps the most well-known, Tether claims to be backed by US dollars at a 1:1 ratio. It provides an avenue for traders wanting stability amid the volatility of other cryptocurrencies.
USD Coin (USDC): Operated by Circle and Coinbase, USDC is another major player. Issued on multiple blockchains like Ethereum, it is regularly audited to maintain the confidence of its users.
TrueUSD (TUSD): This token is pegged to the US dollar and strives for increased transparency by providing regular attestations from third-party accounting firms.
Paxos Standard (PAX): On the more regulatory-compliant side, it brings a level of transparency and adherence to strict rules, revealing weekly reports of assets held in reserves.

These examples illustrate how fiat-backed cryptocurrencies not only provide stability but also provoke discussions on transparency and regulatory compliance in the crypto space.

Implications of Fiat Backing

The implications of fiat backing in cryptocurrencies are multifaceted. One of the primary benefits is stability against market volatility. For investors, fiat-backed cryptocurrencies can reduce the angst of witnessing dramatic price swings seen in other crypto assets.

However, it’s essential to recognize the limitations and potential challenges:

Regulatory Scrutiny: Tether and others have faced questions about their reserves and backing. If the transparency doesn’t match up to public expectations, trust can erode.
Centralization Risks: Unlike some decentralized systems, fiat-backed cryptocurrencies might sail close to centralized control, which can lead to manipulation or mismanagement.
Dependence on Traditional Economics: If the underlying fiat experiences significant changes due to inflation or economic downturns, the backed token does as well, reflecting those real-world dynamics.

Furthermore, the trust in these cryptocurrencies largely hinges on the perceived integrity of the institutions behind them. As regulations continue to evolve, the future of fiat-backed cryptocurrencies could present both opportunities and challenges.

In summary, fiat-backed cryptocurrencies play an essential role in bridging the gap between traditional finance and the burgeoning world of digital assets, offering unique benefits yet facing scrutiny and challenges that need careful consideration.

For those interested in cryptocurrency, understanding this segment is crucial for comprehending the broader implications of digital currencies in our ever-changing economic landscape.

Commodity-Backed Cryptocurrencies

Commodity-backed cryptocurrencies are increasingly important in the evolving landscape of digital currencies. They offer a bridge between tangible assets and the world of cryptographic transactions. By anchoring the value of a cryptocurrency to physical commodities such as gold, silver, or oil, these digital assets present a unique proposition for investors who seek the security that comes from real-world assets. This section will explore the various types of commodities used, provide concrete examples through case studies, and address the challenges that may arise with commodity backing.

Types of Commodities Used

When it comes to commodity-backed cryptocurrencies, several types of physical assets come into play. The most common commodities include:

Precious Metals: Gold and silver are the frontrunners as they have historically been seen as stores of value. Their inherent qualities, such as scarcity and universal acceptance, make them attractive for backing cryptocurrencies.
Energy Resources: Commodities like oil and natural gas offer a different kind of backing, appealing to markets that are heavily influenced by energy prices.
Agricultural Products: Some cryptocurrencies are backed by agricultural commodities like wheat or corn, aiming to link digital assets to the traditional agricultural economy.
Real Estate: Though less common, some platforms have begun creating cryptocurrencies backed by real estate assets, allowing for fractional ownership in properties.

The choice of commodity not only affects the backing but also influences the market perception of stability and risk.

Case Studies of Successful Commodity-Backed Cryptos

Several commodity-backed cryptocurrencies showcase the diverse applications and potential of this model:

Illustration of algorithmic currency mechanics

Tether Gold (XAUT): This cryptocurrency offers investors a digital representation of physical gold, with each token backed by one fine troy ounce of gold held in a secure vault. Tether Gold appeals to investors who want the advantages of cryptocurrency, like easy transferability, combined with the stability of gold.
DigixDAO (DGD): DigixDAO is backed by physical gold stored in secure vaults. The platform provides transparency through a system of proof of asset tokens, enabling users to verify their gold backing on the blockchain, fostering trust among investors.
Petro (PTR): Issued by the Venezuelan government, this cryptocurrency is backed by the country’s oil reserves. Although controversial, it represents an attempt to mitigate national debt and provide a new funding method through its oil-rich resources.

These case studies illustrate how combining tangible assets with blockchain technology can create new opportunities and forms of investment.

Challenges with Commodity Backing

Despite the benefits, commodity-backed cryptocurrencies face significant challenges:

Valuation Issues: Determining the accurate value of the underlying commodity can be tricky. Prices can fluctuate, and maintaining a consistent value requires robust mechanisms.
Regulatory Scrutiny: Governments often scrutinize commodity-backed cryptocurrencies to ensure compliance with regulations, given their nature of linking to physical assets.
Liquidity Concerns: In some cases, converting digital assets back to physical commodities can be complex, impacting liquidity.
Security Risks: The storage and security of the underlying commodities present risks. Investors need assurance that the assets are secure and that the issuing company manages them responsibly.

"In the world of commodity-backed cryptocurrencies, the foundation of trust lies in tangible assets, even as the mechanisms of trade rely on digital innovations."

For further information and insights, you might want to check resources like Investopedia, CoinDesk, and Wikipedia.

Algorithmic and Non-Backed Cryptocurrencies

In the ever-changing landscape of digital currency, understanding algorithmic and non-backed cryptocurrencies is gaining momentum. Unlike their fiat or commodity-backed peers, algorithmic cryptocurrencies operate on mechanisms primarily dictated by code, with the aim of stabilizing their value.

What Are Algorithmic Stablecoins?

Algorithmic stablecoins are designed to maintain a stable value without direct backing by fiat or commodities. They utilize algorithms and smart contracts to control supply and demand with precision. For instance, when demand for a specific stablecoin increases, the system can automatically issue more tokens. Conversely, if the demand falls, it can reduce the supply.

One noteworthy example is Ampleforth. This protocol adjusts its supply daily to keep the price stable against the US dollar. The brilliance in such systems lies in their ability to adapt to market conditions without needing a physical reserve.

Understanding Non-Backed Cryptocurrencies

On the flip side, non-backed cryptocurrencies like Bitcoin operate on a completely different principle. These digital currencies do not have any intrinsic value backing them. Their worth is determined purely by market sentiment. Bitcoin, for example, is often equated to digital gold; its value revolves around scarcity, technology, and the community’s trust.

The lack of a safety net makes non-backed cryptos a double-edged sword. They can be highly volatile, swinging dramatically within short periods. However, this also creates opportunities for traders to make significant profits, provided they are willing to take on the risk.

Impacts of Market Fluctuations

Market fluctuations affect both algorithmic and non-backed cryptocurrencies, but in distinct ways. Algorithmic stablecoins strive for equilibrium; their stability systems can sometimes falter in highly tumultuous conditions. For instance, during extreme market downturns, an algorithmic coin's mechanisms might not react effectively, leading to unintended value swings.

On the other hand, non-backed cryptocurrencies like Ethereum or Dogecoin can experience intense volatility driven by market trends, news, and social media buzz. To put it plainly, their values can rocket upwards or plummet based on public perception alone.

According to a report from Wikipedia, this volatility is what can make trading in non-backed cryptocurrencies both thrilling and perilous.

"Volatility can lead to substantial gains or losses – it’s a gamble that can pay off, or leave you high and dry."

In summary, while algorithmic and non-backed cryptocurrencies add a layer of complexity to the digital asset space, understanding their mechanisms, market behavior, and underlying principles is essential for investors navigating this landscape. They each present unique challenges and opportunities, making it crucial to keep a keen eye on market dynamics.

Evaluating the Stability of Backed Cryptocurrencies

In the world of digital currencies, evaluating the stability of backed cryptocurrencies is paramount. It not just helps investors to navigate their choices, but also serves as a gauge for the overall health of the cryptocurrency market. Stability is critical, as it directly ties into perceived value, investment risks, and usability. A stable backed cryptocurrency can foster confidence and encourage broader acceptance among users.

How Backing Affects Stability

The relationship between backing and stability can seem convoluted, but it's foundational to understanding how cryptocurrencies operate. In simple terms, backing is like a safety net. For instance, look at a fiat-backed crypto, like Tether. It's tied to the U.S. dollar, meaning one Tether should equal one dollar. This connection usually helps it maintain stability. When the real dollar fluctuates, Tether likely follows suit, but it usually doesn't wander far from that dollar mark, creating a predictable environment for traders and investors.

Similarly, commodities like gold or silver back other cryptocurrencies, such as Paxos Gold. In times of market tumult, a commodity-backed currency can sometimes hold its value better than those without backing. However, this isn't a golden ticket; investors still need to assess market conditions and how these commodities are trading.

"Backing acts like a stabilizer, reducing volatility that is commonly seen in non-backed cryptocurrencies that can swing wildly with market sentiment."

Market Trust and User Confidence

Graph showing trust and stability in digital currencies

Market trust is equally as important as stability in the cryptocurrency field. Users need to believe that a cryptocurrency will hold value over time. If a token's backing is solid, confidence rises. For fiat-backed coins, public faith in the underlying currency, whether the dollar or euro, plays a vital role. Users feel surer using a currency that is tethered to a stable fiat, thus fostering an ecosystem where transactions can flourish.

However, trust doesn’t come merely from backing. It also involves transparent governance and reliability. Regulatory frameworks and audits are crucial here. If backing systems are shrouded in secrecy, users may hesitate. Therefore, a clear and well-structured approach not only enhances trust but also fortifies stability.

To sum up, the interplay between backing, stability, trust, and user confidence creates a complex yet critical ecosystem within the cryptocurrency landscape. For investors and users alike, understanding these dynamics can offer insights into future trends and potential risks.

The Role of Regulatory Frameworks

The significance of regulatory frameworks in the world of cryptocurrency cannot be overstated. These guidelines shape the interaction between crypto assets and traditional financial systems, bridging the gap between innovation and compliance. Investors, educators, and tech professionals all have a vested interest in understanding how regulation influences the crypto landscape. Moreover, established regulations contribute to a more secure environment for all participants.

In essence, regulatory frameworks serve as the backbone of trust in cryptocurrency markets. They provide a structure that strives to protect consumers while also ensuring market integrity. The clear rules help to define the legal status of various cryptocurrencies, which can vary widely across jurisdictions. This legal clarity is crucial for both existing and potential investors considering entry into the space.

"Regulation may be the necessary evil to foster a safe and sound environment wherein cryptocurrencies can flourish, based on rules of play that all participants must adhere to."

Impact of Regulation on Backing

Regulatory frameworks can have a profound effect on the backing of cryptocurrencies. For instance, fiat-backed digital currencies must comply with monetary regulations established by central banks and financial authorities. This means they need the backing of actual fiat reserves in order to maintain their pegged value. The necessity to demonstrate adequate reserves helps foster trust, particularly among users who may be wary of volatility.

Furthermore, regulation also informs how exchanges operate and how they manage crypto assets. The presence of robust regulatory oversight can encourage institutional investors to participate more actively in the market, which in turn can enhance price stability and liquidity for backed cryptocurrencies.

Additionally, with significant regulatory bodies such as the U.S. Securities and Exchange Commission or the Financial Conduct Authority in the UK, there is a higher level of scrutiny. This scrutiny can lead to selective approval of cryptocurrencies and stricter monitoring of their backing mechanisms, ensuring they adhere to the stipulated laws and principles.

Governance in Backed vs. Non-Backed Cryptos

Governance structures differ significantly between backed and non-backed cryptocurrencies. Backed cryptos often have more explicit rules concerning governance due to the very nature of their backing. For example, a fiat-backed coin might have a governing body that oversees the maintenance of reserves and ensures that each issuance of the coin is appropriately backed by actual assets. This body’s transparency and accountability can enhance the confidence of users, further strengthening the cryptocurrency’s standing.

On the flip side, non-backed cryptocurrencies may operate under a decentralized governance model. While this can empower users by allowing them to have a say in how the network functions, it can also lead to uncertainties because the lack of defined backing leaves the currency vulnerable to market fluctuations. The increased autonomy in these systems might appeal to some users, yet it often raises questions regarding the long-term sustainability and governance integrity of these cryptocurrencies.

Future Trends in Cryptocurrency Backing

The landscape of cryptocurrency is akin to a fast-moving river—constantly shifting and evolving. As we look ahead, understanding upcoming trends in backing mechanisms becomes crucial. Each development holds the potential to reshape how investors perceive and interact with digital currencies. This section examines emerging models of backing and the challenges that lie on the horizon.

Emerging Backing Models

In recent years, we've begun to see innovative backing models that challenge traditional notions. For instance, the concept of decentralized finance (DeFi) has led to the creation of cryptocurrencies that derive their value from broad sets of assets rather than a singular form of backing.

Fractional Reserve Models: Some digital currencies might borrow a page from traditional banking. They maintain a fraction of reserves against their token supply, allowing them to have more liquidity while managing risk.
Dynamic Backing: Certain cryptocurrencies are now adopting algorithms that adjust their backing based on market demands, similar to a ship's sail catching winds from different directions. This flexibility can lead to smoother operations and reduced volatility.
Tokenized Real-World Assets: We are witnessing a shift toward tokenizing physical assets such as real estate or art. These backed cryptocurrencies offer users the chance to own fractions of high-value assets, thus blurring the lines between physical and digital ownership.

"Emerging models can catalyze innovation, attracting a new demographic of investors who crave more than just a simple digital currency; they seek a stake in real-world solutions."

Potential Challenges Ahead

Despite the promising avenues that these backing models offer, certain challenges loom that stakeholders must navigate.

Regulatory Scrutiny: As these new models gain traction, regulatory bodies are likely to keep a weather eye on developments. Questions about legality and compliance are poised to arise, potentially stifling innovation.
Market Acceptance: Implementing cutting-edge backing methods and getting users on board can be a daunting task. The community's willingness to adapt plays a pivotal role in determining success.
Technical Complexity: With elaborate models comes intricate technology; the complexity could create barriers to entry for average investors, ultimately limiting broader adoption.
Volatility Risks: New backing methods, particularly those tied to algorithmic pricing, may lead to unforeseen market behavior. This volatility can scare off investors looking for stable returns.

The path ahead for cryptocurrency backing is both thrilling and filled with hurdles. As investors, educators, and tech professionals dissect these trends, they must prepare themselves to tackle the challenges and seize the opportunities that lie ahead, helping to lay the groundwork for a more stable and robust crypto economy.

Ending

The conclusion serves as a critical junction for synthesizing the various threads woven throughout the fabric of this article regarding cryptocurrency backing. The importance lies not only in summing up the key points covered but also in guiding the audience towards an understanding of how these mechanisms affect their strategies as investors, educators, and tech professionals.

When we talk about cryptocurrencies, we touch on a landscape that is as dynamic as it is intricate. The embracing of different backing systems—whether fiat, commodity, or algorithmic—impacts not just individual currencies, but the market as a whole. Understanding this interplay can provide substantial benefits:

Clarity in Investment Decisions: Investors equipped with knowledge about backing mechanisms can navigate the cryptocurrency market with enhanced confidence. Knowing if a currency is tied to fiat can yield insights into its stability and regulatory environment, while understanding commodity-backed cryptos can shed light on the influences of physical asset fluctuations.
Educating Others: For educators, imparting this information allows for a more well-rounded discussion around the evolution of money, economic principles, and the future alignment between digital currencies and traditional finance. It can serve as a springboard for deeper examinations into fiscal policy and innovation in payment systems.
Tech Insights: Tech professionals can glean valuable insights into how underlying technologies dictate the functioning and scalability of various cryptocurrencies. Recognizing the limitations and advantages of differing backing systems can help inform better technical solutions and innovations.

At its core, the discussion on backing mechanisms reveals important considerations about trust, stability, and the future trajectory of the digital currency world.

In summary, while the distinctions may be complex, grasping the nuances between various types of backing enables stakeholders in the cryptocurrency ecosystem to make informed decisions. As market trends shift and new models emerge, staying updated and critically assessing these factors remains vital.

"To ignore the foundations of what underpins your investments is to gamble with uncertain odds."

Ultimately, the depth of understanding explored here is crucial for navigating a future where cryptocurrencies may play an increasingly pivotal role in our global economy. By unpacking these layers, one can approach the world of digital currencies with both caution and curiosity, ready to seize opportunities as they arise.

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Understanding Cryptocurrency: What Backs Digital Assets?

Intro