>But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues.

Ok so let's go first principles here (ignoring the word soup that is "have the network effect to generate future revenues.")

For something to create value it has to do something that people are willing to pay for (in currency, goods, services, etc.). That's the GDP point.

Currencies just exist, they don't do anything themselves. People do things with them but the GDP value comes from what those people do, not the currency itself.

OK, you tell me, "but Ethereum facilitates transactions and people pay for those transactions with fees!"

But those fees go to stakers (who do provide a service, albeit a dumb one).

Ok so now you tell me "But yes, stakers need coins, and I'm buying coins now because I think there will be increasing demand for coins vs. a fixed supply!"

Which great, now we are back to "Currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies)."

In this case, what ETH buys is 'the right to earn transaction fees on the ETH network'

Great, again I love this. Feels like we are on to something.

But here's the rub: Are people actually buying anything Ethereum?

Are people buying goods with ETH? No, Ethereum is a very bad tool to buy goods/services with and in fact it's illegal to in most of the world (I'm serious, look it up).

Are people buying services with ETH? See above.

Are people buying assets with ETH? No.

What are they buying? Mostly other currencies.

And now we circle back to why it is a Ponzi scheme: nearly all of the transactions that "generate value" today are just people baying the currency because they think demand will be higher in the future. There is almost no outside value being brought in via "the only way I can buy this good/service/asset is via crypto, so I'll buy crypto because I want that good/service/asset"

If we get to a world where people are actually, ya know, using crypto to buy things, I'll buy into it, but surprise centralized databases are actually intrinsically way better at that than crypto is, but again, that's just my opinion that I've spent years thinking about, so good luck on your bet.

>I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp.

I just hope you've though as much about the intrinsic nature of impermanent loss as I have, given all your confidence. I'll give you a hint, it's not impermanent and it's screwing you over 100% of the time.

EDIT: I'm going to head you off here, because I know the 'have you ever used a dApp?" is coming.

You can put as many layers on the above as you want, but if consumable goods and services aren't being purchased with your currency, then it's worthless, regardless of how many Liquidity providers there are on Uniswap.

> But those fees go to stakers (who do provide a service, albeit a dumb one).

That service is the point of the whole thing. The fees go to stakers who *execute your computation for you and ensure the integrity of the results*. ETH is analogous to credits on AWS. It's simply an execution environment with different properties from AWS.

Again. I don’t know how to say this enough times or clearly enough.

If people were buying goods and services with crypto then I would agree with you but they are not.

Right now it’s circular and moving in the wrong direction. People buy coins with fiat to pay stakers to buy other currency. That’s the only use case. And a big part of that is because what ETH does is actually one of the theoretically worst ways to buy goods/services imaginable.

That is why it’s a ponzi scheme no matter how similar it seems to non ponzi businesses.

Let’s put it this way, Lu Lu roe (or whatever that mlm scam was called) looks a lot like lululemon, except in one people bought the leggings because they liked them and in the other they bought the leggings to get rich.

Only one of those two was a ponzi, even if they both sold leggings.

Is amazon web services not a service people pay for? People are currently buying computation (a service) with crypto. I spend ETH to deploy and execute code, in the exact same way I pay USD to AWS to deploy and execute my code.