It’s a fallacy to think that just because people want to do something it is valuable. People have wanted to do some insanely wasteful or horrible things in the past.
I have a feeling that whatever definition you're using for crypto to say it isn't valuable could also be applied to an awful lot of startups and more generally to current stock market prices...
Very comfortable saying that my definition of value is opposed to many companies and startups
This is only true if you define "value" to mean "people are willing to pay money for it."
But that's a useless and circular definition. It's only tolerated because assuming that money is a proxy for value was useful for making crude models in economics.
> If I'm willing to pay for something then it must have more value to me than the money I am paying, otherwise I wouldn't pay for it.
I disagree. People pay for stuff of no value to them all the time, for various reasons. That someone is willing to pay doesn't automatically mean it has value to them, although it does heavily imply it.
The real problem in the world of crypto is that it's gone through many boom and bust cycles without real innovation to match. The future of what crypto could deliver is as speculative now as it was five years ago.
You're looking at a more absolute definition of value that has little to do with the price of things. That's a worthwhile discussion as well but has little to do with OP's question.
My problem with that definition is that it's a tautology, and therefore holds little actual meaning and provides no insight.
"Why is that valuable?" is not a question meaningfully answered by "because people want it". That answer only begs the question. Everything that has value to people only has value because people want it.
That's not a tautology because it's two different things. If they were only paying for the currency, that could be just a speculative bubble. If the price is based on people paying to issue transactions, that's a price built on actual use.
Economics defines value as that which a rational agent is willing to make a sacrifice for, and the degree to which something is valued by that actor is exactly measured by what they're willing to sacrifice.
Why is this not valuable? Or, rather, what might a better definition entail? A precise formulation isn't required, I'd be happy to see a rough sketch of necessary and/or sufficient conditions.
Particularly, I think it's important to delineate whether 'rationality' allows for arbitrary actions, decisions, and desires. I do include these qualities in my notion of rationality, so long as the actor can rationalize the phenomena to themselves (even if this rationalization is based on nothing more than their ability to do so).
Given this notion of value and rationality, yes: I can very easily allow for NFTs ('useless' though they are) having value.
Do you mean 'rational' in terms of 'every action or desire is reducible to some unknown deductive logic'? In which case, I agree that everyone is somewhat irrational and furthermore that nobody could ever be rational. 'Rational' in the game theory sense? In which case, I see no reason to say that everyone is irrational instead of allowing for the mathematical notion imperfectly capturing reality.
It is possible NFTs do have value in the sense of being good, but them being priced highly does not give us useful signal there.
I suppose my biggest gripe is this: how do you construct a notion of rationality which allows for some people to be perfectly rational sometimes, imperfectly rational at other times, and others to be rational never, while allowing for real flaws in reasoning and the absence of perfect information? (this is, to me, a rough sketch of some necessary/sufficient conditions)
And, again, the notion that something is 'clearly false' at some point presupposes perfect information about the context within which the belief is held.
I think there's a conflation of value and value in a particular moral dimension here.
You raise some good points, though. I personally am probably coming with an unspoken understanding that 'given that something fits into a legal and moral structure, and we accept a certain definition of using something by choice as value' then paying more for that thing implies more value. Facebook is probably a good example of something in the grey area, connecting people has value, but generating demand is questionable, spreading misinformation is likely a large net negative.
The construction “NFTs are highly priced, thus they are desired, thus they are good” is full of holes. If I have a phobia of spiders, and a corresponding desire to eradicate them, does it follow that eradicating spiders is good? If I got my wish, I and the rest of the world would be worse off for it, but my desire exists none the less.
The post was asking if value is created and I think that my argument that the market price of doing things in the ecosystem having a real world cost translates to it having value is correct. There are plenty of insanely wasteful and horrible companies that create real value in the world.
Crypto still looks and smells like a huge sham, tho, so I’m inclined to agree with your other points.