There’s a hard truth that most of crypto doesn’t want to admit: blockchains have no intrinsic value unless people believe their tokens will go up in price. Strip away the speculative layer, and the whole thing becomes a digital curiosity with no sustainable economic engine.
This isn’t just a criticism — it’s a framework. Let’s break down why this is the case, especially in a world where fees trend toward zero, and competition between chains drives down costs to the point of commoditization.
1. Fees Are Not a Durable Value Source
Blockchains often claim that they generate value through transaction fees. But this doesn’t hold up under scrutiny:
- Users hate fees. In every other part of the internet, the trend is toward free. People don’t want to pay $0.50, let alone $20, just to use a basic application.
- Chains compete on lowering fees. Layer 1s and Layer 2s are in a race to the bottom — Solana, Avalanche, Arbitrum, Base — all tout sub-cent costs. Why? Because high fees kill usage, and users go where it’s cheapest.
- Cheap blockspace is abundant. With scaling solutions and performant chains, blockspace is no longer scarce. When something becomes abundant and undifferentiated, it has no pricing power.
If blockchains rely on fees for value, and fees inevitably collapse, then the value proposition collapses with it.
2. Network Size Doesn’t Create Value Without Extraction
People often say that a blockchain’s value lies in the size of its network — more users, more developers, more apps.
But none of that matters unless the chain or token can extract value from that activity.
- Traditional platforms (like Apple or Amazon) extract value through control. They own the rails and take a cut of everything that happens.
- Blockchains, by design, can’t do that. They’re permissionless, open, and forkable. If a chain tries to extract rent, it gets forked or abandoned.
- Tokens used “for gas” don’t help if fees are trivial or abstracted away. If users don’t have to buy or hold the token, then usage ≠ value.
More users ≠ more value, unless there’s enforced token utility. But enforce token usage, and you reintroduce friction — and users leave.
3. “Utility” Does Not Equal Value
The idea that blockchains derive value from “use cases” — NFTs, DeFi, gaming, etc. — is misleading.
- Utility is great for engagement, but value only accrues to the token if it’s structurally required in the loop.
- Most “utility” today is financial speculation in disguise: flipping NFTs, yield farming, memecoins. These don’t create real external demand.
- Apps can move between chains easily. Value doesn’t stick. Protocols chase incentives and lower fees — not fundamental alignment.
Even if blockchains are “used,” that usage doesn’t translate into token value unless artificially constrained — which goes against the permissionless ethos.
4. Burning, Staking, Locking — Still Just Circular Mechanics
You might point to things like Ethereum’s EIP-1559 or staking systems as value capture. But these are internal mechanics. They don’t represent value created from outside the system.
- Burning helps only if the burned amount is significant and sustained, and if fee-paying usage continues.
- Staking is often just inflation-funded yield. Validators get paid in new tokens, diluting everyone else.
- Locking tokens doesn’t create demand — it just reshuffles speculative dynamics.
None of this produces true value the way a business does by selling a product or service that people need and are willing to pay for.
5. Speculation Is the Only Driver
Take away speculation — the belief that the token will be worth more tomorrow — and ask:
- Would people still hold the token?
- Would developers still build on the chain?
- Would users still bridge funds to it?
In most cases, the answer is no.
- Bitcoin is held because people believe it will go up in value — not because of utility.
- Ethereum’s price drives interest — not the other way around.
- Alt-L1s pump on hype, then fade once the narrative moves on.
This isn’t a utility-driven economy. It’s a belief-driven one. Blockchains are shells for financial narratives, and right now, speculation is the core narrative.
Conclusion: The Emperor Has No Clothes
Until a blockchain creates non-speculative, enforced, and unavoidable demand for its token — in a way that can’t be abstracted, commoditized, or forked — it doesn’t have real value.
The entire ecosystem runs on a single assumption:
“People will buy the token because other people will want it later.”
That’s not a flaw — it’s the design. But we should be honest about what we’re building:
Speculative social consensus games, not economic engines.
And if that speculation dries up, so does the value.
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