Though I hugely disagree with most of what Roubini is saying, I sort of agree about 99 percent of Cryptocurrencies being useless, though probably 95% would probably be a better number. It's just a combination of scams and legitimate projects that really just doesn't need decentralization and tokenization, that are most likely bound to fail.
I view things differently, largely because of what I learned from Satoshi years ago. He once said:
But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.
You say that 95% of cryptocurrencies are useless. Why does that really matter, and what does that have to do with
market value?
The fundamental value of money -- including Bitcoin -- comes from its network, not its "use cases." People can use seashells as money (and they have). What use do seashells have? They're completely useless, and it doesn't even matter because they're
scarce and transferrable. That's the beauty of
Metcalfe's Law.
Too many people are stuck in an old world mentality -- they say "money must be physically backed, otherwise it must be backed by
usefulness." That's a bunch of nonsense that nobody could possibly prove, and history is awash with examples that prove otherwise. The best money is actually
useless because it makes supply more predictable. Carlton Banks made a great point about this once:
This is a good reason why gold and silver are somewhat losing their currency: they finally have a practical/material use in the modern industrial world. Before this era, gold and silver did have small scale use in things like teeth fillings or cutlery sets, but the bullion value was always well recognised (hence the "maid stole the silverware" meme).
Objects used as money without alternative purposes are the best money, it makes the money supply more stable (and hence predictions about the size of the money supply will be more accurate). You never have to worry about someone using Bitcoin to catalyse a chemical reaction, or to wipe their ass with.
If you believe that sound money is decentralized, then you ought to value
what the market says -- not personal opinions about what's "backing" cryptocurrencies. The people that say "altcoins are scams, they're going to zero" are employing the same logic that says "Bitcoin is a scam, it's going to zero."
That's why I always smile when I see people get worked up over how "useless" altcoins/tokens are. They remind me
so much of Bitcoin skeptics.
