Technology

I don't think anyone needs to exchange cryptocurrencies for "something of value" for the investment to work, they just have to believe the currency itself holds value, where value is defined by supply vs demand. If enough people think others will believe it has value, then demand will increase. It's basically how MLMs work, but it can sustain itself once it reaches a sufficient number of investors.

Adding transactions for real goods and services in the mix expands the reach of the currency and can stabilize demand a bit once the initial speculators have lost interest. So yeah, there's absolutely a motivation for speculators to try to get others on-board. But it's not necessarily a requirement, as we can see with other collector fads like Beanie Babies or Baseball Cards (the only value is in trading with other collectors), but just changed to be digital (NFTs are the strongest analogue).

However, just because speculators are rewarded if you use a cryptocurrency for transactions doesn't mean you should avoid it. Use it if it provides value to you. The value proposition is:

• lower transaction fees, especially for international transactions - Bitcoin fails for small local transactions, but works well for large and international transactions; the lightning network helps for small transactions, and other currencies exist for small transactions as well
• privacy - banks can and do sell your data, and governments may be interested in your transactions as well; you can't use cash for online transactions, so there aren't many good options
• security - breaches and scams happen, and if you don't notice the issue soon enough, you could end up paying for fraudulent transactions; with cryptocurrencies, you never share your private key, so you're as safe as wherever you store that key; you can also move money between keys, so you can keep the bulk of your money safe

Even without any kind of physical backing, cryptocurrencies offer an attractive value proposition. We could probably solve the above with fiat, but that currently is not a thing. I don't recommend using cryptocurrencies for everything, nor do I recommend using it as an investment, but I do recommend using it for a few transactions here and there until you feel comfortable with it because of that value proposition.