Top-level analyst and hedge fund manager Willy Woo, who is also known as a venture investor and advisor, explained his concept of 'real-world value' as backed by the Bitcoin (BTC) network. He also indicated why fiat money represented a sort of long-term experiment.
Still an Experiment
Mr. Woo announced that modern fiat money system is an experiment, although it has lasted four times longer than that of Bitcoin (BTC). However, the very essence of both assets looks similar in this regard.
It looks like Mr. Woo is referring to the 'Nixon shock' as the birth of a fiat money system in its modern age. In 1971, the President Richard Nixon of the United States decided to start the unilateral cancellation of direct international convertibility of the U.S. Dollar to gold.
So, Mr. Woo would rather refer to it as 'fiat with no golden equivalent' versus fiat money by default.
The 'experimental' nature of most popular assets around the world may be result in a lack of understanding its internal mechanisms. Thus, the traditional money system also keeps its secrets just like its blockchain-based competitors.
Energy and Amortization Bring 'Real World Value'
Additionally, Mr. Woo highlighted that the experiments with a modern fiat system are not unique at all since history remembers similar instruments.
What is unique is the level of dependence of global economics on the fiat system. Therefore, it becomes incredibly vulnerable at times of hyperinflation.
Opponents of Mr. Woo claimed that neither Bitcoin (BTC) nor fiat money have any 'real world value' as they are attributed only to precious metals, i.e. Gold and Silver.
The analyst indicated at least two cases when assumptions about Bitcoin's zero value were false:
Every BTC created is a digitisation of real world value without need for a central trusted entity (that is energy and amortisation of mining hardware).