Any currency that a:

1. strong entity circulates and

2. wants back

is fundamentally valuable.

> American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back.

https://hackernoon.com/the-guns-of-bitcoin-1f779309a718

Ways to destroy the US dollar value: Destroy the US tax collecting power, or have the US ask for taxes in a different currency. If the US started collecting taxes in Euros, the value of the US dollar would disappear instantly.

The US is a strong entity and has no incentive to ruin the value of the dollar. It will not start collecting taxes in Euros. Or Bitcoin. Why would it give all that power away? More likely is that Bitcoin gets made illegal or very difficult to use. At the end of the day, if you have US-protected assets, you will have to pay US dollars to the US gov and this will continue to give USD value.

Bitcoin has no such strong-entity backing, so it has no fundamental value. Bitcoin people are obsessed with the idea that mere possession is important. It's not. Ask people with loads of marks or Zimbabwe dollars.

Bitcoins' value is the inherent mathematical properties that makes it hard to forge. things that are hard to forge can be used as tokens for other, easier to forge (but valuable) objects.

hard to forge tokens can be used to denote things that are otherwise used to denote (such as ownership, and chain of custody).

being electronic, this makes Bitcoin quite useful.

Yeah, being hard to forge is necessary, but not sufficient.

There are a ton of electronic currencies that are difficult to forge, for example Flooz, Beenz, and the gems in clash of clans.

Things you can walk to a shop to and buy things with. Things employers will pay you for. Things that are backed by a government and guaranteed by a national bank. Things that are protected by laws and monitored to prevent large value shifts. Things that can be transferred in many transactions (like, more than four per second) Things that don't need the energy production / consumption of a small country just to function.

Cryptocurrencies can have all that, but they need to have a high transaction volume (tens of thousands / second), regulation, protected / monitored exchange value, etc. Which defeats the original purpose of an "open source", unregulated currency.

But you get what you ask for.

The cowry was used as an international currency for thousands of years and wasn't backed by any government. All it was was seashells that were a limited supply resource. In major usage, it was used all the way from Africa to Hawaii. I think most people look at currencies with an incredibly narrow view of history.

^ Worth noting, that this is relatively modern history. It's usage stopped as a currency in the mid 20th century. At the beginning of the 20th century, some african countries still accepted it as taxes

> Things that are backed by a government and guaranteed by a national bank. Things that are protected by laws and monitored to prevent large value shifts.

I'm no crypto-anarchist, but plenty of currencies do not meet this definition, and have failed as a result. Indeed, it's a time honored method of spurring growth to simply create money, and it's a time tested cause of instability. Certainly a well managed central bank is an asset, but it's hardly a reliable method of keeping currencies useful. There are plenty of reasons to be concerned with bitcoin's deflationary nature, but arguing that it's not as inflationary as government backed currencies is an argument that can damage both side of this debate.

Real estate (or land-backed currency if you want currencies in a narrow sense) is one classic example. Land has value beyond trading it for fiat.

Currencies don't need fundamental value they only need to remain stable something which bitcoin utterly fails at.

You cannot invest into a currency. If bitcoin rises by 30% is there a corresponding increase in fundamental value real value? No. It's a zero sum game. If somebody wins that also means someone else loses. It's pure speculation yet people treat it like a get rich quick scheme and think bitcoin cannot ever fall in price.

On the other hand you can invest into a stock. A stock will increase in price by 30% because the company has made 30% more profit or owns 30% more assets. Everyone who holds stock wins.

and a company's stock value could increase (or decrease) on a mere rumour. why isn't that equivalent?

Government backed currencies have value based on the network of people that use them. Theoretically, if Bitcoin was ever a currency, it could have the same fundamental value once millions of people used it for every transaction in their lives.