It's a ridiculous example, of course. But it's something. Not to mention the actual real applications that were mentioned above.

The point is - crypto-currencies are fairy dust. There is nothing real or tangible about them.

I don't have a horse in this race, but what about pyrite? It has most of the aesthetic properties of gold (which I think everyone agrees is where most of the value comes from), but almost none of the value. Pyrite is a real, physical thing that will not disappear tomorrow. However, it has almost no value.

I guess what I am trying to say is that there is a lot more that goes into value than utility. That's why I do not think that people always act rationally. Clearly there is something irrational about people's relationship with gold that makes it valuable. I don't see why crypto cannot have a similar irrational evaluation. Sure, it could go "poof" tomorrow, but I don't know if that will stop people from seeing it as valuable.

IIRC pyrite does not possess the important qualities of gold aside from sort of looking like it. For example, you can't make it into a chain like you can with gold. For jewelry you're limited mostly to using it as a rock.

> but what about pyrite? It has most of the aesthetic properties of gold

Not really. Pyrite has a vaguely similar color to gold and flakes of it can be easily be visually mistaken for gold in certain contexts, it doesn't generally closely resemble gold, even cosmetically.

> The point is - crypto-currencies are fairy dust. There is nothing real or tangible about them.

Most money in circulation is 0/1's on hard drives.

I'm bearish on cryptocurrencies because frankly the entire thing is hilarious but modern currencies aren't entirely dissimilar.

> I'm bearish on cryptocurrencies because frankly the entire thing is hilarious but modern currencies aren't entirely dissimilar.

I think this thread started out with someone saying that crypto-currencies aren't very useful as currency, but as assets (like a gold bar) instead. And then it was argued that they're not very good as assets either.

Those 0/1s on hard drives are backed by trillions of dollars of debt and tax obligations people are obliged to trade labour and physical goods for though.

Being backed by demand from the entire economy of a stable polity is certainly better than being backed by sunk (energy) cost fallacy and speculator enthusiasm.