I’ve had the same thought—what’s the value of a decentralized ledger when you can trade digital assets just as easily? Why use digital cash when you can pay for your coffee with your Tesla stock or your Linode credits or whatever.

But I’m not nearly as certain as you that a pure digital cash will have no value in that world. Yes, Ethereum’s practical value (as a token redeemable for computation) adds volume and provides a price floor, which could make it a more stable store of value. But it also places it in a competitive landscape with other tokens that can perform the same function.

Bitcoin is a pure finance play, which should make modeling it much easier, which should give it some unique appeal. Plus the first mover advantage is huge.

Even if BTC never works out its transaction rate issues, I think it could solidify as a simple, auditable, modelable store for large value transactions.

Sometimes adding features makes a product worse. Twitter was more than Blogger even though it ostensibly did less. In the same sense, I’m not convinced Bitcoin++ will beat Bitcoin.

I am very intrigued though. The “BTC is Friendster” hypothesis is an ok one.