Comment: Thanks For your question...

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Thanks For your question...

what it is redeemable for has no bearing on what it is backed by, or its usefulness in its own right.

For example if I have a VW, and you have a BMW and we want to trade, we could say that that BMW was redeemable in VW's

Likewise if we choose to measure something in terms of fiat, like gold, wheat, oil, labor and bitcoin, it is not to say any of these things are backed by fiat. We just measure it in a common thing for convenient comparison.

Now when something like bitcoins threaten to be a new widespread currency, then the number of things we can redeem it in, is a useful question. The more things we can buy with bitcoin the more useful it is as money.

For example, one of bitcoins best features is it is free, to transfer money anywhere in the world. If you compare that to Western Union, that is a great advantage.

However, if theperson looking to send money does not have bitcoin and must purchase bitcoin, and the person receiving money can not buy what they want in bitcoin and have to change back to fiat, then those commission fees eat make it not free anymore.

But as bitcoin becomes more wide spread, and either the sender already has bitcoin, or the receiver can spend bitcoin directly or both, the number of places bitcoin is redeemable becomes relevant.

I hope this helps.

Keep up the great question asking.
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