![Forethought is for Sheep [640x933 - 117KB]](https://pic8.co/sh/SuNXFy.jpg){kind=link}
Who said this exactly?
That's not how boostrapping a currency works. Gold backed currencies are worth X gold because a central reserve is contractually obliged to trade them for that amount of gold. If I spend €20 worth of electricity mining crypto, it's not like I can trade my crypto back for electricity.
The only reason to impose proof of work on miners is to force them to devote scarce resources to recognise a single version of the currency's history. If there were no such proof of work they could gamble and recognise multiple fraudulant histories.
You would still be forced to value the crypto at at least what you spent mining the crypto just like a gold mine has some specific difficulty(proof of work) to extract gold out of the ground.
That's a different concept to backing though. Gold backing means that the currency can always be traded for gold, which places a lower limit on it's value (at least in terms of gold).
Most crypto has no such backing so the lower limit for it's value is zero.
(post is archived)