Day 3

Subject: [firstname] Do you know who backs Bitcoin?

Hey [firstname]!

Yesterday I told you the question I get asked most about Bitcoin.  The question people generally ask me right after that is: Who or what backs Bitcoin?

The answer is: Nobody – and everybody!

You see Bitcoin is simply backed by the faith of the people who use it rather than any national government. Technically that makes it a “fiat” currency – and no, that's got nothing to do with cars!

This is a concept some folks have a hard time relating to, but most of the world's currencies are fiat.  Think the US Dollar is backed by all that gold in Fort Knox?  Think again!  Not since President Richard Nixon effectively did away with the Bretton Woods system back in 1971.

The trouble with most fiat currencies is their value on the foreign exchange markets (FOREX) can be manipulated by governments to suit national interests – usually by manipulating the interest rates on government bonds.

If an economy is weak, and the government wants to lower the value of the country's currency to boost exports, they can cut interest rates.  This prompts traders to sell the currency on the FOREX lowering its value relative to other currencies. This makes domestically produced goods cheaper than imports, and makes them more attractive to overseas buyers as well.

The converse is also true… 

If a government wants to encourage inward investment, they can hike interest rates to boost the currency's value, making it more attractive to overseas investors. 

With Bitcoin that can't happen, because Bitcoin it independent of any government!

In fact, the Bank of Canada reckons Bitcoin is a bit like the gold standard: There's a limited and predictable supply of the anchor to the monetary system; no central bank or monetary authority controls the supply; and governments lose the ability to simply print money based on nothing other than goodwill.

Think of Bitcoin as digital gold for the 21st Century – even if you can't make a necklace or a watch out of it!

Talk soon!

[Your Name]

PS. Grab your copy of my Bitcoin guide now!  Here's the link: [ling to sales page]