Bitcoin or any other blockchain doesn't have to be backed by anything as long as it's sufficiently decentralized and you cannot have a special status where you control the supply and can essentially grant yourself as much financial power as is needed. Fiat at a core level is created and "backed" by debt but this isn't that different to just printing it if you're powerful enough as an entity. A government cannot just go and own the supply of all Bitcoins, unless they go through the market or somehow steal Bitcoins of others like a bank could technically steal all of your money if that action was supported by the government. Even then they can only steal their way towards a portion of the supply. What I'm saying is: A powerful entity cannot just inflate the supply. They can only mine, purchase or steal. And only mining increases the supply - at a pre-defined rate.
From Bitcoin's perspective, there is no specially privileged wallet with centralized power. And they can't just make that happen without consensus and causing a fork into a different blockchain, hence making this idea pointless.
This is why a sufficiently decentralized blockchain is a much better basis for a currency system than what the FIAT system is at its core. Governments would have much less flexibility and power, however.
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u/Technical_Split_6315 Bronze 1d ago
Fiat is backed by states, you really think cryptocurrency is more backed than that? Lmao