Is anything preventing bitcoin from infinitesimal units? I know Satoshi is the smallest on blockchain but can't it be fractionalized at some point? So instead of creating new bitcoin like fiat you create smaller units.
Not to my knowledge. But we'll all be dead by the time a smaller unit than a Satoshi is even seriously discussed.
The dollar is backed by the government. A stock is backed by the ownership unit in a company, ideally a profitable going concern if chosen wisely. A commodity is, well, a commodity. A futures contract is based on the physical which may vary in value, but not entirely at the whim of the speculator. What is bitcoin backed by? A hope and a prayer? Groupthink? The feedback loop (for lack of a better term) of Internet chatter? What's the substance behind it that actually amounts to anything? How do you arrive at a value that is anything other than sheer speculation? It seems to be strictly, "Hey, there's not a lot of it, so you'd better get yours soon." Period.
Please don't tell me that you can't understand the stupidity of this? Making smaller units of a satoshi does not dilute any of the bitcoin in existence. This is the classic pizza argument. Just because you take a 10 slice piece and cut each slice in half, to arrive at 20 slices, does not mean you have more pizza. If we get to the point where we need to sub-divide each satoshi into smaller pieces (ie. 1 satoshi is equal to $1 dollar and we need to have a more granular unit), this means that anyone buying bitcoin today is super wealthy will be super wealthy at this point in time.
Bitcoin is not recognized as a currency by any government so it can't possibly be issued and backed by a government. That's just common sense that anyone can understand, so I'm not going to elaborate on that further. What backs Bitcoin is the exact same thing that backs a company or a commodity. It's called "work". A company doesn't exist without employees doing whatever work is required to produce and sell the product or service. Gold and other precious metals don't dig themselves out of the ground. If you want to mine gold, you've got to invest in the mining of it. In other words, it requires people and machines to do hard work over time to extract it out of the ground. Mass quantities of crops don't raise themselves. It take farmers, workers, chemicals, machines and fuel to raise the crops, harvest them, store them, and sell them. When you put a few apples in your shopping cart at the grocery store, you have a fundamental understanding that they didn't just magically appear there. Even just a few apples are backed by real farmers doing real work in the orchard. Likewise, Bitcoins don't create themselves. A single coin requires real computers and networking hardware running software that that has been written one line at a time by many people, and plenty of electricity to power it all around the clock. Then there's all the people that are involved in overseeing those datacenters, just like the miners oversee their mining operations and the farmers monitor the health of their crops. Work is the ultimate backing, and the amount of work that is required to not just create a Bitcoin but to also keep the network running and staying secure, is staggering. Now you might say, "Yeah but solving a puzzle using a computer isn't real work". But it is. It's just not work you're personally involved in. Let's face it, moving forward in life is just solving one puzzle after the next, isn't it? The farmer trying to figure out how to keep his crops from dying, or the miner trying to figure out where to dig next are also puzzles to be solved. They're just a different puzzles than the one that requires a Bitcoin to be created. That's all.