Dollars are also tied to nothing. A towel with the logo of a sports team also has zero intrinsic value. Same with a shiny lump of useless metal.

That's because being tied to something, or having intrinsic value is not how things gain value.

Things, crypto, dollars, gold, and towels, have value because people WANT them. That's it.

You even touched on it: "some sort of service that people want, and therefore have value" - crypto provides a service people want, therefore by your own words it has value.