I was on that team on the Acorns team in the early days, yes. So, thanks!
1. Is there an intrinsic value that a coin holder ultimately receives as an asset that he can sell?
Depends on how you define intrinsic value. I define intrinsic value as the end consumption: burning fuel, feeding hay, shaping metals into gadgets. The intrinsic value of equity is the product that comes off the line, or the services that are generated by humans, which are then transformed into profits, dividends, and capital gains. It is the product that is the intrinsic value, and the rest is just auction dynamics.
In the case of Bitcoin, that intrinsic value is a decentralised trust system that confirms transactions faster than current global infrastructure. You have to corrupt at least 50% of the participants in the system to initiate a fraud. The more people that are using it, the harder it is to defraud the system. When you sell your Bitcoin, you are selling your access to that system.
In the case of Ethereum, it is access to a decentralized app store with automated, self-executing contracts (an automated software escrow agent is one example). In the case of the storage coins, that intrinsic value is hard-drive space. In the case of Golem, that intrinsic value is computational power and time. You are selling your access to these systems, which have intrinsic value, when you sell a coin.
2. Because there is no ultimate ‘conversion’ or dividend or any future ‘cash flow’ does the coin holder have that kind of equity interest?
Let’s propose a thought experiment. There is a company that issues shares in their enterprise, but they never issue a dividend and they are always cash flow negative. People buy their product, but they continue burning cash at a higher rate than which they can produce revenue. There is no expectation that anyone will ever acquire them, so there will be no liquidity event beyond the private/public market for their shares.
Is the equity in that company still equity? I think the answer is yes. I can still speculate in Twitter, can’t I?
3. It’s like saying buying a credit card is buying an option to use credit. Maybe true but does that make it a marketable asset?
An option is implicitly credit. The Black-Scholes model is entirely predicated on the idea that you borrow money now to make a trade, successfully execute the trade, then pay back your loan with the proceeds of your trade.
Technically mortgages qualify in your example above. You put money down for the opportunity to borrow and hope that the value of your home goes up faster than the loan does. Sure, a lot of people (and banks) speculate in properties and mortgages, but most people just want a place to sleep.
4. Is there ultimate demand for this costly bitcoin as bitcoins aren’t actually needed for bitcoin transactions?
I’m not sure I follow this question. If you’re saying that there are many Bitcoin clones that can do the same thing as Bitcoin, you’re right. But there are also many companies that sell oil, and advertising, and other services yet we don’t question their existence or the applicability of equity.
The marketplace will decide the value of Bitcoin, and even though Litecoin and Bitcoin Cash accomplish the same thing as Bitcoin, the market currently values Bitcoin higher than the other two. There are a number of reasons for this, eg. hashrate, number of miners, number of support services, notoriety; but the fact that Bitcoin could be abandoned tomorrow does not change its moneyness or derivativeness.
Was the Confederate grayback currency? If the US Dollar was no longer accepted anywhere, either tomorrow or in a century, would it still have been currency? If we started trading Alphabet stock with each other in a highly liquid medium, would Alphabet stock be currency? Would it still be equity?
I think the answer is that they are both. We are merely adjusting to an era of higher liquidity which makes all (digitizable) assets appear as currency.