There's a universally accepted mechanism for valuing a security.

Imagine you buy and hold the security and look at all the cashflows from that security in the future.

Discount those cashflows from the future to the present, because $1 ten years from now is worth less than $1 today.

And add them together.

No one disagrees with this because it's so simple - net present value of future cashflows. All markets trade this way.

All the action is in these two questions - what are the cashflows going to be? and, how do we discount the money from the future to the present?

By the standards of economics, all cryptocurrencies have a zero fundamental value as a security because there are never any cashflows.

So what are cryptocurrencies? Are they like gold?

Not really. Gold has a great deal of uses on its own and makes physical things that are desired by humans - nearly all gold goes into jewelry. Even if gold were free, people would still use it.

More, gold has tremendous scarcity value. Less than 200,000 tons of it have even been mined.

Cryptocurrencies claim to have scarcity value but do not.

It's not just there there are almost 7000 coins now, it's that if you wanted to clone any and recreate your own coin network identical to an original one but with you and your friends owning all of it, you could in a moment.

What about a currency? Is it like a currency?

Well, no. The big difference is government. Governments support a fiat currency - no one supports crypto.

Many of the people who advocate for crypto do not understand the magnitude and importance of government.

I'd be the first to say that this has gone somewhat off the rails, but the United States Government is the richest and most powerful organization on the planet, it employs literally millions of people, and it has the power of taxation on every enterprise in the richest country in the world.

The currency is backed up by laws, and assets, and a huge amount of military force.

This isn't just abstract. There are pair of bonds that are functionally identical, but one is just "very very safe" and the other is backed by the "full faith and credit of the United States of America," same thing that's on the bills, and that little extra is worth considerable extra in hard cash on these highly liquid markets. You can literally measure the strength of that promise on the capital markets!

And again, I don't approve - I think it all needs to come down. But you should know how it works.

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Next: trust free is undesirable and impossible.