Yes. A diamond is just a rock somebody found. Same for gold. They have value because they are scarce and people think they are pretty (up until the last couple of centuries when we developed industrial uses for both). Nobody has ever needed a diamond or a hunk of gold to survive, yet they have value because we say that they are valuable.

So basically, the more people who believe in the value of some thing, the more that thing holds actual value?

Yes. That's how value works.

https://en.wikipedia.org/wiki/Paradox_of_value

The paradox of value (also known as the diamond–water paradox) is the contradiction that, although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.

Yes the physical form it takes doesn’t matter but the back end does

Pretty much.

Yup. One of the original tokens people used as money was kaori shells. They held value because they were considered pretty decorations, were limited in the number that entered society and were easy to serve as a intermediary trade good. All you need for a currency is for people to treat it as a currency. The other bit that usually ends up being a factor is scarcity. You can either create scarcity artificially for things like coins or bills where you make replicating them a crime or you choose a natural resource where new stuff coming in does slowly enough it doesn't destabilize the system. If ever there is a sudden glut of new currency stuff entering the system the currency gets devalued because you are tying it to stuff you need to survive like food, shelter and tools which are finite and have actual concrete value.

Gold for instance historically was not particularly super useful but it doesn't corrode, can be infinitely reused, enters the system at a trickle and is nice and shiny so people like it. It is functionally just like trading seashells.

Well, one thing is taxes, which are payable in the local government's fiat currency, which ensures that there's always demand for the fiat currency, assuming a responsible monetary policy.

There is a difference. For instance let's say UK rejoins EU and has to adopt the Euro. The pound gets depreciated as people switch currencies. It's the responsibility of the government to make sure people can exchanges their pounds for euros at a fair rate.

You can't do that with crypto currencies because there's no authoritative body who will be willing to take the worthless currency and exchange it for another currency without any initial value being lost.

There are plenty more example where the lack of an authoritative body (which is what people consider the benefit of crypto) is actually not good for the user.

I understand that’s a bond

The dollar is representative of the work you contributed to the economy