If a currency's value is based solely on its utility as a speculative tool, isn't the fundamental utility of that currency, trading money for goods and services, diminished?
Who will use bitcoin to buy a pizza when that $20 worth of bitcoin might be worth $30 in a week? Years later, that $20 would be worth thousands. Many people were burned, early on, doing just that.
Right now, it seems only like a magic box to put money into and turn it into more money. There may be a limited supply of any individual cryptocurrency, but can't there be an infinite number of currencies. Is there some fundamental algorithm that governs all cryptos and prevents this? There is no inherent value in what is essentially a long math problem, which is what cryptos are.
Too much money chasing too few goods and services leads to a devaluing of that money, which we experience as inflation. We're not using cryptos to purchase many actual goods and services, yet, but when we start using them as replacements for traditional currencies, we should expect that $20 pizza become a $60 pizza. When everyone is a bitcoin billionaire, things will obviously cost more. Mathematically, everyone can't have everything, or everyone stops working.
Bartering is the only honest economy. Everything else ends up being some kind of speculative shell game because we are greedy, anxious creatures--or there are, at least, enough greedy, anxious creatures out there that the rest of us have to cover our asses. Those of us who are cautious will eventually (as people did with the stock market when interest rates dropped and savings accounts become useless investment tools) have to play the game, one way or another.
It is said that gold's intrinsic universal value are what made it a good tool to back currency. With cryptos, I think we are relying on the intrinsic value of greed as the new standard that backs our currency. If that's true, there is certainly an endless supply!
