I wrote about a similar comparison way back in the middle of 2017:
https://benshieldsblog-blog.tumblr.com/post/165101127465/let...
https://drive.google.com/file/d/0B9li-Wu3-bPEWEswQVdIOHVKTmM...
https://benshieldsblog-blog.tumblr.com/post/165101127465/let...
https://drive.google.com/file/d/0B9li-Wu3-bPEWEswQVdIOHVKTmM...
every single one of them. Many times over.
I think everyone knows, because, c'mon. But everyone thinks they are the smarter one and will be the ones fooling others and making money. Which makes this article, and yours, pointless, because, everyone already knows that.
Some cryptos have value beyond that, like ETH, because the Ethereum network itself has intrinsic value, and ETH is the only thing you can use to pay the Gas fees if you want a program running on the network.
Side note: Aren’t there tokens that sort of have a kind of stored gas? Like, you can cash it in to get a refund of some of the gas cost of the transaction?
WRT the gas fee thing: yes, technically you can send a miner whatever you want in order to incentivize them to include your tx in a block, but the only thing baked in is ETH. Additionally, after the London hard fork (slated for release next month), EIP-1559 will be live which changes the fee system to become a "burn" fee system rather than a "tip to miner" fee system, which will force all fees to be paid in ETH (and algorithmically determined, rather than somewhat arbitrarily picking a fee that you hope is high enough for miners to include your tx).
The theory around "prices people are willing to pay for ease of transactions" seems probably not that tricky,
the theory around "the value people will assign to a good based on ease of transfer of that good" seems like it would be more complicated and confusing.
The value of a PayPal share is tied to the expected future profit of PayPal, to how much transaction fees will be total, and how much costs will be.
This is a distinct question from the value that a user assigns to the ability to make transactions using PayPal, which, I suppose corresponds to the demand curve of how many transactions/ how much is transacted, given different transaction fee sizes.
Of course, an analogous demand curve should also apply to bitcoin (or what have you).
But this demand curve doesn’t seem enough to give an explanation for what price to expect. (Not just “it doesn’t explain the actual price” but rather, I don’t see how it by itself would explain any price.)
If you’re buying gold you’re not purely depending on finding another sucker to buy your gold. You can sell it to any one of the countless manufacturers or jewelry makers using it every day. If the price crashed too much, these would probably just increase their inventory of gold in anticipation of a future price increase, which would itself drive up price. If the price stayed low they can lower prices on the goods they’re making, increasing demand for gold, stabilizing the price.
That’s why cryptocurrency is not digital gold. There are no such mechanism setting a fundamental floor for how low the price can go.
In traditional finance all water has been wrung out, but in crypto relatively unsophisticated versions of strategies like arbitrage can be quite successful. Traditional finance institutions are more sophisticated and have more resources than their crypto equivalents. I really think traditional finance orgs need to realize they can employ the same skills to the crypto space with a much lower investment for the same returns because the space is so immature.