Prior to 1971, the US dollar was backed by gold.

If you had a wad of US dollar bills and wanted gold, you could just waltz in to a federal reserve bank and exchange your dollars for a set amount of gold. This was called the gold standard and widely used prior to the two world wars.

The point was rather simple, without this backing, the currency is just a wad of paper. It’s cool if you can get something better than a wad of paper in exchange for it, but it has no intrinsic value. After 1971 no country has the gold standard, all are replaced by something else entirely: trust.

The reason why dollar, euro, yen or any other currency is valuable is because certain entites make it the legal tender, a way to settle taxes and debts within their borders and because you trust those governments not to do something stupid about it, such as print too many of those notes, to make them just wads of paper.

Cryptocurrency is like that, it’s a hash file and not a paper, but otherwise identical to other fiat currencies - but without the backing of a state. The only reason why they’re valuable is because you can find other people who will buy them, in hopes there will be even more people who will buy them to drive the price up. This is the dynamics of a pyramid scheme.