the US dollar isn't and has never been backed by oil. If it was, the price of the US dollar and the price of oil would move in lockstep. They don't. Closest I can figure is that the US dollar is backed by the GDP of the US.
Yeah that's my bad I shouldn't have said "backed by", I'm just looking at the mechanisms for what sustains its value over time. The dollar isn't pegged to oil like it was pegged to gold during the gold standard. The gold standard bootstrapped the dollar as the reserve currency, but now the dollar is fiat. Oil being traded only in dollars sets a demand floor and forces countries to keep a strategic reserve of dollars, which helps maintain it as the reserve currency. Without that deal the dollar would have collapsed once Nixon exit scammed.
The dollar isn't the reserve currency because it's the most stable, it's the most stable because it's the reserve currency, which is achieved by force and politics.
A decentralized currency backed by math & hashpower is a lot cleaner and more peaceful than empire notes backed by fossil fuel cartels and war.
Math isn't a backing. 'Hashpower' isn't even a real word.
I'm not sure you fully understand the other terms you're using either. A 'backed currency' is a currency that comes with a guarantee that it can always be exchanged for a predetermined amount of another asset. That's the dictionary definition.
Neither the US dollar, nor bitcoin are backed currencies.
"secured by" then?
Bitcoin isn't backed by an asset, it's the asset itself, like gold.
Gold doesn't need to be backed by anything, it's the layer 1 money because it's the commodity with the most scarcity and resistance to supply inflation.
Or at least it was before the discovery of Bitcoin.
Bitcoin will be a lot better for the people as well, both within the empire and outside. Abandoning the gold standard has been a disaster for the average US citizen, since 1971 real wages flatlined and the divide between rich and poor skyrocketed. The gold standard wasn't perfect as it still allowed the banks to commit legalized fraud in the form of fractional reserve banking, but it at least limited the damage they could do and kept real interest rates from going negative.
The gold standard was abandoned in the US 1933 by FDR. It was abandoned by Britian in 1931 and then the rest of the UK and most of it's allies as part of the Bretton Woods agreement in '44. Not sure I understand what you're talking about here. Since abandoning the gold standard in 1933, I'd argue that the lives of most Americans have significantly improved.
FDR banned citizens from owning gold, but nation states could redeem dollars for gold until 1971. Once the money printing got so extreme that other countries lost confidence & started draining our gold reserves Nixon pulled the rug out from under them.
Fractional reserve banking started in the 17th century. It was a significant economic contributor as it allowed greater access to capital to people trying to start and build businesses. Not exactly sure what your issue is with this, could you explain?
It's easier to understand in the context of a gold standard. Due to certain flaws with gold as a medium of exchange, people end up trusting 3rd party vaults to store the gold, which issue gold receipts that are "as good as gold", but more portable/divisible/etc.
This trust eventually gets betrayed and the banks issue more gold receipts than they have gold in their vaults, which is fraud. As long as not many people actually redeem the certificates for gold, they'll get away with it. But if people lose confidence, then they rush to redeem their certificates, and the scheme blows up. This is basically what happened at an international nation-state level in 1971 when the US scammed the rest of the world with their fraudulent gold receipts.
In a fiat economy things get a little more confusing, but the end result is the same. The banks push risk and leverage out into the system, privatize the gains, and socialize the losses when it all blows up. The same "dollars" are loaned out to a bunch of different people at the same time, at interest. It's a scam, a confidence game. If I did what the banks do every day they would call it check kiting and I would go to jail.
Issuing more on-demand cash receipts (eg checking/savings balances) than they have cash in the vault is legalized fraud.
If a bank wants to issue loans without being fraudulent, that's certainly possible:
1) they can loan out their own capital reserves, or
2) they can raise money by issuing bonds for at least the amount and maturity dates of the loans they want to issue.
Being a credit middle-man is okay, that's a useful service banks can provide. But creating fraudulent cash receipts is a confidence game that always blows up eventually and we all suffer the consequences.
FDIC insurance wouldn't be necessary if the owners & managers of banks were held personally liable for defaults (they used to be long ago), but limited liability creates a severe moral hazard. FDIC makes it worse.