Yuval Noah Harari, in Sapiens, introduced that Gods, Mythology, Limited Liability Companies (like Boeing, Adidas, Tesla), and money (the dollar, euro, etc.) were fictitious entities that we made them up, and collectively believing in its value. Where we lose trust, they lose their value.
If the gave and giving money value, those hard currency (gold, silver, and other metals), paper currency, and fiat; and crypto is also a virtual currency, why do we trust the former more than the latter? How does both fictitious currency differs?
We probably don't. We trust something when, with experience, we know we can trust them. Ultimately, if you see currency that're collapsing all around the world, losing their price for the past few years; and consider some currency that collapses due to hyperinflation in some places nowadays (and in history books, like Germany after World War I); we probably know we can't trust the currency, but we refuse to think about its volatility, fragility; and we have no other choice as people around us exchange in that currency.
On the other hand, the fluctuation of cryptocurrency are huge enough for the average to notice, and most human clung to certainty, they can't bear a volatile currency. Even if the world are made of probabilities, where something happen is highly probably (more than 95%, or more than 99%), and some very unlikely (less than 5%, less than 1%); people like to think in terms of black and white, the "always will happen 100%" and "always never happen 0%", as if they exist when they don't.
Similarly, trust comes in wide acceptance. Except for the few stingy, people want money as a medium to trade for something else they need/want, not to hold the money per se. If not many traders accept cryptocurrency payments, then it cannot buy what they want, hence lower trust. Similarly, people often operate on necessity: if there are no need, then don't bother me, leave me alone, for one have other things needed to do, like work, scrolling social media, watching TV, and all other things more interesting than hearing your pitch to accept your currency. Plus, people around me don't even use it, so you convince them first.
In conclusion, both type of money (actually, all type of money) exist only in our imaginations. If one day, we decide to eradicate trade from human society, then money will cease to exist. Similarly, their value lies in our trust toward that entity; for if we don't imagine, or at least forced to imagine, how could it come to life?
First published in read.cash