Is Ether Actually Worthless?

Throughout 2018, ether, the second most valuable cryptocurrency by market capitalization, has seen a dramatic drop in valuation — one of the worst among market leaders. The price of one ether coin topped out just over $1400. At the time of this writing, it is valued at $290 per coin. With such a drop, one can’t help but wonder — how valuable is ether? According to TechCrunch‘s Jeremy Rubin, not very valuable.

‘Economic Abstraction’

As Rubin explains, ether is essentially the fuel which powers the Ethereum network. The problem is, this fuel doesn’t have a defined value proposition. New cryptocurrencies built using the standard ERC-20 Token template actually have no requirement to pay for transactions using ether. Known as “economic abstraction,” Ethereum-based projects can instead choose to pay out rewards with their own tokens.

‘Pareto Improvement’

According to Rubin, replacing ether with a project’s native asset is a win-win for everyone involved. Rubin’s claims go hand in hand with various individuals within the cryptocurrency community who view Ethereum as little more than factory for initial coin offerings (ICOs). With ICOs potentially on the decline, it’s hard to disagree with the argument that ether itself has very little intrinsic value — even if the Ethereum project itself is revolutionary. What do you think about Rubin’s argument that ether (ETH) may be essentially worthless? Do you see long-term value in ether? Let us know in the comments below!