I am new to the bitcoin world and I am just wondering why don't we simply use the US currency (or any fiat currency) to transfer money using the bitcoin network? Why do we need crypto currencies as a must to deal with that network?

Edit: why do we need (in the bitcoin network) to change our US dollers to bitcoins so as to be able to transfer our dollers to someone else? Or can we use the technology of the bitcoin network to transfer dollers without the need to convert the dollers to bitcoins, like what banks do?

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    I've got a $100 bill. If I send you some bits that say you have it now, who is going to believe you? I still have the $100 bill. Aug 1, 2017 at 1:09
  • Thanks for the answer but sorry I can not get you, I am not sure if you mean that the bitcoin currency is a kind of proof to transactions or not could you explain your idea further if you please? Aug 1, 2017 at 3:12
  • Who would you trust to hold the dollars? Why would I trust them too? You need an asset that can be custodied without requiring a counterparty. That's what the tech behind bitcoin does. Aug 2, 2017 at 8:37

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You cannot transact physical goods digitally. If I have a physical dollar bill, I cannot magically turn that into something digital that I can send to you. I have to go to someone who will accept my physical dollar bill and give me digital dollar bills in return. Likewise, with my bank account, I need to convert my bank dollar bills into digital dollar bills that work on this other network.

Well now we really have three things that represent the same value: physical dollar bills, bank dollar bills, and digital dollar bills. At this point, the only thing holding them together is the fact that they all have the same value. But they can only have the same value if some central authority is dictating that all of these have the same value.

Suppose the digital dollar bills were created by some independent entity which is not influenced by the same entity that enforces that a physical dollar bill and a bank dollar bill are equal in value. Well now we have digital dollar bills which have a different value; it is now its own currency. It has its own digital tokens which have their own value. And thus we have Bitcoin, a digital token which has its own value independent of any other currency.

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