[stult]

I think you're right mostly but missing a key point. Crypto's value is inversely proportional to faith in government backed currencies in places with high internet penetration. So in the US, it's actual value is quite low because we have an extremely strong currency and well developed payment systems. In China, faith in the government-backed currency (renminbi) and the investment options available in that denomination are relatively low. Coupled with reasonably high access to internet connections and government restrictions on expatriating capital, crypto becomes a valuable alternative denomination.

Crypto has no inherent value except as a policy failure. At least so far. I have yet to see a large scale proof, but potentially at least block chain tech has value for reducing transaction costs in shipping or other fields.

[Ologn]

> China...government restrictions on expatriating capital, crypto becomes a valuable alternative denomination

Money is expatriated via Bitcoin from the PRC to, say, Vancouver. The point is that with a currency, people would be comfortable leaving it as Canadian dollars or US dollars. This is not what happens though, the Bitcoin is converted to Canadian dollars, and is then perhaps converted into other things, such as real estate.

It is more like a concert ticket or gallon of milk in this case - something which might be valuable for a time, but then loses its value. The Papiermark in the early 20s could be used to move money around as well.

[stult]

>Money is expatriated via Bitcoin from the PRC to, say, Vancouver. The point is that with a currency, people would be comfortable leaving it as Canadian dollars or US dollars.

No one is OK leaving their money in hard currency. That's why we invest it, or put it in interest bearing accounts. Leaving it under your mattress leads to losses to inflation. In that sense, currency is very much like a gallon of milk or a concert ticket, though it loses its value much more slowly in a healthy economy.

With BTC, we actually have the opposite problem, deflation. It is increasing in value every day, whereas with a normal fiat currency it is more efficient to have a low, stable rate of inflation (where the individual unit of currency loses its value over time).

So I don't disagree with you completely. You're right that BTC should be more like a concert ticket than it is. The important question is why it isn't.