ursaminortaur wrote:The other argument I have heard put forward is that a currency (legal tender) has value because it is what you need to pay your taxes and you are in trouble if you don't pay your taxes. Other currencies, gold, crypto-currency, commodities then gain contingent value to the extent that they can be converted into that legal tender. As far as I am aware bitcoin is only accepted as legal tender in El Salvador.
https://www.bbc.co.uk/news/technology-58473260Fear and excitement in El Salvador as Bitcoin becomes legal tender
You are right that at present El Salvador is the only place that it is legal tender. However very many countries (including El Salvador in the past) have had problems with their "legal tender". Indeed since we mention El Salvador, previously they made the US $ legal tender (2001) as they were having problems with their legal tender. They are not the only country to have decided to outsource their legal tender, just the first to pick bitcoin.
Many who travel will have visited places where there is an "official" exchange rate for the local currency and the rate that you can get. This obviously exists because the state fiat currency has less value to people who live there than other currencies, despite being the one used for taxation.
I would suspect that many in Turkey would desire to save in some other currency than the one used to pay taxes.
Palastine has problems with the "official" currency. There are limits to how much of it that bank's are allowed to hold. Those who can, save in other currencies.
Many countries have had financial repression in the past, including our own. Ownership of foriegn currency being restricted. We see a similar repression with crypto. Fortunately this is not currently the case in the UK, but as I said, it was and still is with some countries.
Legal tender may have a "value", because there is no alternative for many.