If you wanted to know how much people are willing to pay for decentralisation, trustlessness and privacy (most certainly not an infinite amount of money) you could also do that, but that's answering a different question.
Why transact via cryptocurrencies instead of other systems? Because of these other desirable properties. They're the value cryptocurrencies add to the world and the reason why people choose to them despite the inefficiency. People transact in Ethereum because they want to run smart contracts. People transact in Monero because they want privacy.
> So it absolutely makes perfect sense to measure how efficient these systems are processing transactions, and the way to measure that is by looking at how much it costs to process a transaction with each of these systems.
I don't think so. People measure this in order to compare with traditional banking systems which are centralized, require trust in institutions and affords no privacy. This is not a fair comparison.
This is a big assumption, and almost certainly untrue.
That's an ok general rule, but it breaks down in a lot of circumstances. Look at scams, for example. People pay quite a lot for them, but at a societal level, they have strong negative value.
Interesting.
> For example, Monero enables private and untraceable transactions [...]
So so...
> Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy.
Let's add "a largely unregulated gambling area where people with too much money can bet their excess money on being among those who pull out before the music eventually stops" to that list, shall we?
That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.
What I mean is people can transact via traditional systems just fine and they choose cryptocurrency because of other qualities.
> largely unregulated gambling area
The speculation is a separate thing from the coins themselves. People also speculate with fiat currencies, stocks, real estate.
> That's also where your frustration comes from: Bitcoin is perfectly fine for this kind of "value proposition", hence it stays King of the Hill.
Yes. What I don't understand is how it drags the whole market along with it no matter where it goes.
No, speculation is the primary use case for all of these coins right now.
And crypto currency has some advantages over the other speculation options you mentioned:
- more people can participate because of them being unregulated (compare: forex trading, which has much higher barriers of entry)
- it is rather easy to not pay taxes on crypto gains in many countries, especially if you're staying below certain limits
And the most important of them all: the crypto cake is still expanding and has been expanding for over ten years now. That is the crucial difference between classic forex trading and crypto - in forex, the comparative value of different currencies usually stays within a certain range. It goes up and it goes down. In crypto, the crypto just has been getting more and more valuable over the long term. It goes up, and up, and down, and further up than before again, and then some more up.
As long as this continues, any gambler betting on crypto has an edge and will win more than he loses. Of course it can't continue like this forever, but that's easy to ignore when looking at a ten year history of unbelievable gains.
Then you have to define value. I don't think it's transactions. Any random bank can make transactions. People can transact with cash.
Cryptocurrencies create value by providing other properties such as decentralization, trustlessness, privacy. For example, Monero enables private and untraceable transactions and for privacy enthusiasts it has essentially infinite value.
With this definition of value, we can see how bitcoin isn't providing much. By now it's centralized, has no privacy, has high fees... It sucks basically. The only reason it's still the number one currency seems to be inertia. It's the most frustrating thing about this market honestly. Not only is bitcoin still king but it drags down better coins when its value plummets.