Yes, speculators backed a lot of bad business ideas but that was because people were getting online in droves because there were so many uses. Those companies failing didn’t change that, especially since there were so many examples showing that concepts were solid: e.g. a dotcom losing money on each sale didn’t mean online stores were doomed since Sears had proven the model many decades earlier.
It all depends on where you start counting. In 2008 it was just Satoshi and a few cypherpunks. I would argue it looked a lot like Arpanet [0]. So Fast forward 10 years from 1973 ... and was the internet really useful in 1983?
On January 1st 1983, "every machine connected to ARPANET had to use TCP/IP. TCP/IP became the core Internet protocol and replaced NCP entirely." [1] ... hardly a huge commercial success at that point.
[0] https://en.wikipedia.org/wiki/ARPANET [1] https://www.davesite.com/webstation/net-history2.shtml
That said, there were still plenty of ARPANET users in the early days if you look at the subset of people for whom network access was an option. The benefits of email were obvious and group forums like Usenet (1980[1]) had similar quick adoption, at least in technical or academic fields where communicating with people outside of your location was important. Similarly, FTP (1980[2]) had clear value and the pricing made sense more often than it might have seemed since all of the other alternatives cost money, too.
The other thing to remember is that this wasn't happening in a vacuum — while the internet was emerging, there was popular mainstream usage for companies like The Source, CompuServ, etc. starting in the late 1970s[3] and so again there was clearly a business opportunity if you could bring the access costs down. The number of people willing to pay by the minute to chat, shop, etc. suggested that an even large number of people would be interested as that per-minute rate dropped.
It's that last part which makes me question the current valuations: even if you assume that all of the operational problems were solved with Bitcoin, it's hard to see what value it has to the ordinary person beyond possibly reclaiming the ~3% overhead of a credit card transaction — and that's assuming that VISA, et al. wouldn't just lower their rates to beat whatever the operational cost + fraud insurance costs ended up being for Bitcoin.
1. https://en.wikipedia.org/wiki/Usenet#History
2. https://tools.ietf.org/html/rfc765
3. There's a great series starting with https://www.filfre.net/2017/10/a-net-before-the-web-part-1-t...
They easily could, their current rates contribute a lot toward cashback and points rewards and other marketing programs. Australia regulated a cap on rates at 0.4% iirc, and Visa still covered its costs.
> the number of [Usenet] hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted
How does that compare to the number of Bitcoin miners today? or the number of nodes (11,000)? or the number of users (>30M)?
> people have never had a reason to use it other than speculation.
I did. I paid small amounts for small jobs in various countries of the world with nearly zero fees. (Back in 2013). Had I used Paypal, 50% of the amount sent would have been eaten up by the exchange rate and fees. Bank transfers between these countries cost 100% of the transaction. I also use it to buy hosting, domains, vpns, etc.
> there was clearly a business opportunity if you could bring the access costs down.
Well, guess what? If you can bring the fees down in Bitcoin and Ethereum, there are clear business opportunities. And yet, still in the 90s people said "People will never shop online. You need to go to the store to see and try the stuff."
The internet had explosive growth. New uses and technology were coming out constantly.
Bitcoin? It's not clear actual use of bitcoin as a currency is even growing. It's very possbile nobody uses bitcoin at all in 5 years. The internet on the other hand was an eventuality. We knew it wasn't a fad.
We also had the Japanese theme park bubble, which left behind a lot of scrap metal. Be wary of sampling bias.