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Right, but isn't a government just an arbitrary set of representatives of a bunch of people? They have some set of resources at their disposal and they say "this piece of paper has value because we say it has value, and we will prop up the systems that allow you to transfer it around and exchange it for things, and we have a consensus to maintain some kind of order in the system" and they are successful to varying degrees.
It doesn't seem fundamentally different from Bitcoin
frankenbike-
Try "mining" some sterling and find out what the difference is.
A government isn't just an arbitrary group of people. They have the power to enforce the relationship between their currency and actual physical stuff in the country (barring revolution) and to force you to use that currency to pay tax to them because it is their money.
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The government is an arbitrary set of people (not necessarily representatives, since not everywhere is a democracy) that can use the police, courts and army to enforce payment of taxes in its desired currency.
Bitcoin doesn't have an army attached, and with some particularly stupid exceptions you can't use it to pay taxes or settle court fines anywhere.
Although you may be more interested in a currency's ability to buy pizza and/or drugs, they're not generally more important than staying out of prison.
ffm
useless
The difference is that fiat currency (not backed by gold) is issued by a government, essentially as a means of "keeping score" of everything that's under its control. That's why you have to pay tax to that government in their currency. Bitcoin is not keeping track of anything tangible, just (as described) the value of the work done to discover/mine it.