Currency is worth something because other people are willing to trade it for something useful at a stable exchange rate. Now, having a central bank that controls the currency, and a government that enforces that control, can help protect the stability that gives that currency value in times of economic instability, but that's only occasional interference.
We know this because, in the past when states were weaker and less able to do this, huge swaths of people ignored their state currency, more or less, and used other states' currencies, ones that were more trustworthy (counterfeiting used to be a serious concern) and stable.
Even today there are countries where people are in practice using the US dollar as their currency, ignoring local official currencies, simply because the dollar is recognizable and its price is extremely stable compared to their official legal tender. How does this square with your theory that the dollar would lose all value overnight if the US government stopped requiring it?
- Digital cash (volatility, transaction rate, gas fees, etc). Only potential counter argument here is Lightning which essentially compromises on many of the original design goals of Bitcoin and comes with its own set of issues[1] PLUS still has the pesky volatility problem
- Store of value (Volatility)
- Inflation hedge (Volatility, essentially tracks other markets)
- Outside government control (Law enforcement and tax authorities routinely seize, tax, and disrupt cryptocurrencies). There is the “fleeing a dictator” scenario but that’s a very limited use case that in no way supports the current market value.
- Banking the unbanked, remittances (See El Salvador [2]). Money quote from the article:
“There is no experiment where a currency was introduced with such strong incentives and still failed,” Fernando Álvarez, an economist at the University of Chicago
I feel like registering “whatarewecallingbitcointoday.com” or some such to track these.
1 - https://medium.com/bitcoin-blockchain/lightning-network-on-b...
2 - https://restofworld.org/2022/el-salvador-chivo-bitcoin-walle...
From the beginning there was only one true narrative: "Abolish central banks". Because they are at the core designed to enslave humanity. That is why Bitcoin is created. It was always an attempt to solve a political problem with technology. Not more not less. Will it succeed? I hope so.
I would like for blockchain technology to find its rightful place as a unique solution to a real problem with actual user adoption and meaningful real world impact but after 13 years, substantial investment, and several pivots/rebrands/etc it hasn't been successful at anything (relative to the total potential user base/"addressable market" of 5 billion internet users).
I like to look at it as if Bitcoin (and to a larger extent blockchain) were a single technology startup. Let's call it "Blockchain Inc". If it weren't for the religious fervor of true believers, speculators, "hodlers" doing anything and everything to pump it, etc no investor or group of investors in their right mind would keep pouring untold billions of dollars into Blockchain Inc after its pivoted over half a dozen times, still has essentially no real world use case, and no meaningful user adoption (when compared to other 13 years old startups, platforms, technologies, etc with or without equivalent investment).
It's a failed tech startup being propped up by speculation and its own engine of propaganda and constructed media narrative.
The banks flooded the economy with cash but they didn't tell everyone to start buying NFTs. All of these exchanges, stablecoins and crypto-derivative products were built solely on the self-propagating hype that needed the cheap cash flowing into the system. The banks didn't tell anyone to go buy crypto, the crypto companies did, which effectively tied the performance of the crypto market to the stock market because the average consumer saw crypto as a more enticing speculative investment, not a currency.
If the crypto community was as focused on the fundamentals as you argue, there would be a lot more conversations around not allowing these billion-dollar exchanges creating derivative products with unsustainable rates to capture the market. But they did and the crypto world is where it is today because of it.
The Fed may have cut the trees down, but the crypto community threw them in a pile, doused them in gas and set the whole thing on fire and it wound up burning out of control. How do you blame the Fed for the fire?
To each his own, I suppose.