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The power of any currency is solely in its marketing.



Wrong. Pretty much all currencies are imposed by law. See http://en.wikipedia.org/wiki/Legal_tender


The 'value' of the currency ultimately comes from people's opinion in it, and whether or not it is legal tender is just one influence on that opinion. You might be forced to accept payment in a currency but that doesn't mean you value the currency much. Eg the Zimbabwe dollar.


it's not so much "accept payment in" as "pay taxes in"

I can accept bitcoin, e-gold, marks, cattle, whatever I want as payment... no problem, until tax day rolls around.

At that point, I need to figure the value, in dollars, of the two sheep that bob gave me for helping him scale his wool broker website, and then I need to figure the value of the rusted out nissan I gave joe for the 128GiB ram that I used in the project, and from that figure the profit I made. I then need to pay taxes, in US dollars, on that profit.

So, it's not so much that I'm forced to accept payment in dollars as that accepting payment in anything else is a huge pain in the ass for my accountant.

(I am forced to pay my taxes in dollars, of course, but to me that seems pretty reasonable. All businesses choose what currencies they accept payment in. The fact that it's harder to avoid doing business with the government than with other businesses doesn't really change that.)


That only works inside a country. If everyone else refused to accept some country's currency they'd be screwed anyway, "legal tender" or not.


You are required to pay US taxes in USD which creates a huge and steady demand.




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