This is one of those articles that exposes that the so-called professionals that say crypto has no intrinsic value are quite the circus clowns.
For starters, what is of value is widely subjective and thus cannot be generally defined. Now when we come to what has "intrinsic value" we are basically saying the same thing in a slightly different way because here, we quite simply try to put off the human emotions and look at assets for what they are.
Well, jokes on us(them?) because there's no value determination of anything without human emotions, you can apply as much logical reasoning as you want but at the end of the day, everything is subject to emotions!
But surely, we are not here to talk about emotions, so we take the bait. Let's try to decipher the fundamental value structure of crypto that makes it economically sound(even more than fiat) without emotions, yeah?
Of course my title already gives away what might be the center of argument here, but I'll pretend that's not there and move along now.
What makes something "economically" sound?
For something to be economically sound, it means that it aligns with the principles of economic efficiency, stability, and rationality. It typically implies that a decision, policy, or action is financially viable, doesn't lead to excessive waste, and contributes positively to overall economic well-being. Economic soundness often involves considerations like cost-effectiveness, sustainability, and the prudent allocation of resources.
Mr. ChatGPT
From this definition, fiat already isn't economically sound. For starters, the policies that govern the supply of this currency in itself creates waste and endangers the lives of millions of people.
From where I'm standing, the fiat monetary system simply exists to tear down what the "citizens" build over a period of time.
How?
I believe the word for this is "overheating economy".
It will surprise you to note that things like "low unemployment" rate, and "high demand" for goods and services are primary indicators used to term an economy "overheating".
Surely, I would want demand to be controlled in some way, but certainly not centrally!
At this point, the Feds decide to fuck up the value account you've built for years by increasing interest rates and this causes high inflation that increases your standard of living.
How economically sound is this?
History shows that not one country in the world has an economic system where its fiat currency has sustained its value and been on the rise over the years. All have downtrend charts just that some are slower than others.
But on the reverse, we are seeing individual companies with proven records of business profit over the years having it good. If a business(both in revenue and stock market value) can be in profit even with adjusted values in inflation, why can't a country?
A look at crypto economies
Crypto is the most economically sound assets and currencies currently in the market but due to the size of the market and the imbalance in pockets of those within thereof(and the intention of these large pockets), the ecosystem is exposed to high volatility.
The more people that get into crypto, the more prices will stabilize and only move upwards or downwards through great developments or the lack of it thereof.
Why Is This?
Crypto is designed to be work intensive, by default.
Bitcoin is where it all started. Has anyone looked at the miners market? That's so much to put into a network but it supposedly lacks any intrinsic value, according to economic and finance experts.
Then you turn your eyes to altcoins, despite most being engineered to be centralized and feed a few large pockets, there are still serious risk mechanisms spread through that makes each of them a system that's designed to attract more value(through work and investment) to scale and grow in value.
Blockchain and crypto economies are much more sound for this single reason because unlike fiat, when a policy is passed, everyone on the network gets to face the consequences of it being a bad policy or otherwise reap the benefits of it being a good policy.
The effects of bad governance, lack of developments, zero building of further ecosystem incentives and zero creation of job opportunities bounces back on everyone present on the network when it comes to crypto so this simply encourages everyone to build, intentionally, towards a common good goal that benefits the entire chain.
Fiat has no direct link(beneficial) to the economy anywhere but through manipulation, it is used to influence the value flow across businesses and individuals.
This is the difference.