Three years ago, The Economist ran a column on the feasibility of Bitcoin, the hot new tech trend that jumped over 1000% just months earlier. At the time, the article presented the most balanced analysis of the fledgling currency from a long-standing institution, acknowledging the areas where Bitcoin performed well but ultimately questioning Bitcoin’s ability to operate as a true currency. While the Bitcoin bubble of the time proved not to hold, there are now twenty-five cryptocurrencies with a market cap upwards of 3 billion AED.

Modern cryptocurrencies offer a great diversity in software implementation and economic design principles, but each one has the same fundamental goal that Bitcoin did in 2014: to operate as a currency. Currency, as an abstract concept, has a clear economic definition, one which holds true to common-sense logic. This definition asserts that, in common terms, one should be able to save currency, set prices in currency and spend currency. Popular cryptocurrencies are highly volatile with 24-hour price fluctuations of over 15%. This volatility categorizes them as high-risk assets rather than savings, and leads any seller willing to accept them as currency to lock their prices to an equivalent amount of cash, eliminating two out of three requirements of currency.

Cryptocurrency's most staunch supporters, however, write off these criticisms as side effects of the currency’s youth. These individuals argue, much in line with the positives highlighted in The Economist’s piece, that the ability to spend cryptocurrency easily, anonymously and internationally justifies adopting it, despite the current volatility. With the wide adoption of cryptocurrencies currently underway, this argument of cryptocurrency bulls has been put to the test in a way that not only reveals flaws in the foundations of the argument but also highlights pathways for the future of cryptocurrency.

As the name brand of the space, Bitcoin is the most widely accepted cryptocurrency with a wide range of vendors, from Microsoft to drug dealers, accepting it as payment. Yet, at the core of the blockchain implementation that drives Bitcoin lies the inevitable death of its future as a currency. Bitcoin has harsh scarcity rules designed to guarantee that the system remains decentralized. These rules are relatively unchangeable, as near universal consensus is necessary to change them in a move called a fork. The scarcity rules have failed to scale to the popularity of the system. In 2014, Bitcoin was valued for the speed and cost of transaction, but as of today the average Bitcoin transaction takes around two hours to complete and requires almost four dollars in transaction fees. Such transaction fees make Bitcoin nearly useless for the average transaction, moving Bitcoin further towards its status as a financial investment, and not a very safe or stable one at that.

With all three of its connections to what we know as currency weakened, Bitcoin’s future as a currency seems unlikely. However, investors still look to newer cryptocurrencies, ones who at their core utilize the same technology that made Bitcoin appealing to those who have bought in. The question is, if Bitcoin is dying, why would these investors place money in cryptocurrencies that have less investment, media attention and history?

Perhaps this is because these currencies are fundamentally not operating themselves as currency. The lens of this discussion will be limited to the two highest market cap cryptocurrencies following Bitcoin: Ethereum and Ripple. While each suffer from the same volatility problems as Bitcoin and have similar investor pools, they are ideologically different from their predecessor. Rather than aiming to become pure currencies used in everyday transactions, these coins operate as functional tools of larger applications.

Ethereum is the second most established cryptocurrency with a market cap upward of 320 billion AED. The currency powers a cloud computing platform of the same name. The distributed network of Ethereum’s cryptocurrency miners offers technology companies a unique way to host and power their applications. Simply put, Ethereum is directly equivalent to computing power.

Ripple is a hot cryptocurrency which is still too new to be traded on mainstream platforms, but has still managed to gather a 151 billion AED market cap. Ripple is a global payment solution wherein the cryptocurrency is used as an enabler for people to convert global currency into their local currency. The currency is not meant to be kept, but rather used as a bridge currency in a global trade market.

Both Ripple and Ethereum are fundamentally tied to a use case. Their function in this use case still fails to meet the conditions of currency, but instead makes them strong contenders to be classified as commodities. Commodities, unlike currency, are given value based on the their use’s worth. Ripple and Ethereum, in this same way, are able to gain value based on the usefulness that they power through their platforms.

The criticisms of The Economist still stand — cryptocurrencies fail to meet the mark as currency. Their problems as currency have only worsened as adoption has increased and the value that stems from their use as currency is likely artificial value driven by hype. However, there is real value in commodity-like coins such as Ripple and Ethereum, which shines a light for a future for crypto — without the currency.