1. “the whole idea that a number generated by a computer algorithm and based on no other use or value other than its uniqueness”
The value of cryptocurrency is not based on its uniqueness, but the fact it is a programmable system to communicate ownership and transaction. Correspondingly, There are more than 8,000 monthly active developers working on various cryptocurrency projects, with some 80% of those developers starting in the last two years. These engineers create value by solving problems (payment is a much big problem in developing countries).
2. “Why does anybody think that governments are going to let untraceable money stand?…governments will be left with no choice other than to take action.”
Why does anybody think that governments are going to let free speech to be mediated by a few large company like Facebook? Again, if you take a US centric view, maybe there is more to lose than what the government could gain. But Chinese government is already minting cash digitally, in a re-imagination of money that could shake a pillar of American power.
3.”These exchanges are regularly hacked or just giant frauds.”
These are early days in crypto. Just like when web started, there are lots of “websites” that are hacked or just giant frauds. But it doesn’t mean there isn’t going to be real business like Amazon emerging from these. The current bitcoin adoption rate has promised that the largest digital coin will hit the one billion user mark nearly two times faster than the internet did.
Regulations will come and so will the use cases.
4. “I like the chances of my COIN puts.”
Nobody is investing in Coinbase based on its PE ratio. Even Coinbase itself is not aiming to make money: it aims to make money during crypto bull market and lose money during crypto bear market…so that it could spent money to built up the payment infrastructure for the future, similar to the way Amazon uses investor money to built up the distribution centers.
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That all, said, I have no doubt that crypto is in bubble territorial, but bubble is maybe what we need for every technology revolution. In fact, you look at history, every major technology change comes with a financial bubble. Industry revolution -> South Sea Bubble; Railroad -> Railway Mania; Age of Oil/Automobile -> The roaring 20s; Internet -> Dotcom bubble. It is the bubble that provides the financial capital to lay out the infrastructure to allow the next generation of entrepreneurs to take advantage of it.
I do not personally own crypto…other than the free credit from my coinbase account. But I think it is wrong to completely discredit crypto…and there might be good investment opportunities after all the dust has settled.
