[humbledrone]

That's a silly definition of "backing" in my opinion. By the definition that backing means "you can convert it into something," what is gold backed by? It's backed by... gold? That doesn't mean anything.

Bitcoins, by the way, can easily be converted into computation and energy. The simplest and most obvious way to do that would be Bitcions->USD->AmazonEC2. Of course there's a billion other ways to convert Bitcoins into useful things, just like gold, because they're simply a store of value with little use for other purposes.

[EDIT] Feel free to refute my argument rather than downvoting me.

[MaulingMonkey]

In the context of currency, "backing" is typically understood to be referring to guarantees, typically by a government or bank, such as the gold standard: "ensuring" value by "guaranteeing" some conversion rate to something else, especially something else considered to have some "intrinsic" value, to stabilize the value of the currency.

This is of course a fuzzy line. And you're right, there are other definitions of "backing" which render it a meaningless term. But the distinction is a useful one for discussing these matters, so what terminology would you prefer instead?

[atlantic]

When he says "you can convert it into something", what is meant is something of intrinsic value. So gold does not need to be converted into anything, it already has intrinsic value for its use in jewellery, electronics, etc.