My phrasing: the USA military determines the value of the USA dollar.
I binged on David Graeber last year. I so appreciate criticisms of the Liberal tradition from outside of the Liberal (left vs right) sphere. It's like only being able to appreciate the forest once you get out of the forest.
Anyway. Graeber asks a lot of hard questions. Such as "What is money?" And provides historical precedents which may lead to answers. Like prior relationships between money, currency, debt, empire, military, markets, capitalism.
For a long time, governments minted gold (or whatever) into currency. Then we adopted some kind of virtual currency, so now there's more money than their is actual currency. (Which, humorously, is not first time in history.)
More recently, non government systems like bitcoin are minting electricity into currency. I don't really care that "there's no there there". Meaning the lack of a physical existence (eg gold or unobtainium or whatever) doesn't bother me.
However, I am concerned that there's no big ass military compelling everyone to treat bitcoin as a fiat currency. Until then, bitcoin is just an escrow or collectible.
A very, very fragile escrow.
It feels like the tulip bulb craze. aka Castles in the sky. Bitcoin's preceived value is held up by everyone's belief that they can sell their holdings to the next sucker.
Which is fine. Until it isn't.
What happens when the inevitable shock happens? When there's the equivalent of a run on the bank? When everyone tries to "withdraw" by converting bitcoin to US dollars at the same time?
Who's gonna step in and stabilize the system?
Right now, no one.
So then all that currency, minted bitcoin, just goes up in smoke. Poof.
We've seen this story play out so many times.