I am struggling to understand what currency you would define fundamental value - Loafs of bread?
1. strong entity circulates and
2. wants back
is fundamentally valuable.
> American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back.
https://hackernoon.com/the-guns-of-bitcoin-1f779309a718
Ways to destroy the US dollar value: Destroy the US tax collecting power, or have the US ask for taxes in a different currency. If the US started collecting taxes in Euros, the value of the US dollar would disappear instantly.
The US is a strong entity and has no incentive to ruin the value of the dollar. It will not start collecting taxes in Euros. Or Bitcoin. Why would it give all that power away? More likely is that Bitcoin gets made illegal or very difficult to use. At the end of the day, if you have US-protected assets, you will have to pay US dollars to the US gov and this will continue to give USD value.
Bitcoin has no such strong-entity backing, so it has no fundamental value. Bitcoin people are obsessed with the idea that mere possession is important. It's not. Ask people with loads of marks or Zimbabwe dollars.
hard to forge tokens can be used to denote things that are otherwise used to denote (such as ownership, and chain of custody).
being electronic, this makes Bitcoin quite useful.
There are a ton of electronic currencies that are difficult to forge, for example Flooz, Beenz, and the gems in clash of clans.
Cryptocurrencies can have all that, but they need to have a high transaction volume (tens of thousands / second), regulation, protected / monitored exchange value, etc. Which defeats the original purpose of an "open source", unregulated currency.
But you get what you ask for.
I'm no crypto-anarchist, but plenty of currencies do not meet this definition, and have failed as a result. Indeed, it's a time honored method of spurring growth to simply create money, and it's a time tested cause of instability. Certainly a well managed central bank is an asset, but it's hardly a reliable method of keeping currencies useful. There are plenty of reasons to be concerned with bitcoin's deflationary nature, but arguing that it's not as inflationary as government backed currencies is an argument that can damage both side of this debate.
^ Worth noting, that this is relatively modern history. It's usage stopped as a currency in the mid 20th century. At the beginning of the 20th century, some african countries still accepted it as taxes
You cannot invest into a currency. If bitcoin rises by 30% is there a corresponding increase in fundamental value real value? No. It's a zero sum game. If somebody wins that also means someone else loses. It's pure speculation yet people treat it like a get rich quick scheme and think bitcoin cannot ever fall in price.
On the other hand you can invest into a stock. A stock will increase in price by 30% because the company has made 30% more profit or owns 30% more assets. Everyone who holds stock wins.