A cup of coffee has a value in the physical world. If you can pay for it by ADA then also that has a value.

The link between the digital and physical world

The economic and incentive model links the digital and physical world. The model is designed by a team. It is based on knowledge about people’s behavior and their motivation to act honestly. The design of the model is then rewritten into the source code of the protocol. The source code is available on GitHub and everyone can review it. The source code is used as an input for the creation of a full-node. You can imagine the protocol as a set of algorithms that basically describes how to react to internal and external events. Protocol lives in the digital world so by the external events we mean every related event in the physical world. For example, it is easy for the protocol to verify whether a received block, including all transactions, is valid. Verification happens fully in the digital world. However, people are able to prevent block propagation or they can intentionally change the source code to try to commit an attack. A well-designed protocol should be able to deal with all possible fraud attempts.

The majority of people accept money as a motivation for honest behavior. The link between the digital and physical worlds is based on the ability of the protocol to provide people with a physical reward. Not directly, but indirectly. Cryptocurrency needs to have something that is valuable in the physical world. ADA is a native coin of the Cardano protocol and has its market value that can be expressed in fiat money. There is a limited number of ADA coins so they are naturally scarce. To be precise, there will be only 45,000,000,000 ADA coins. As far as there is a demand for the ADA coins the Cardano protocol has a digitally scarce resource that can be used to reward people for honest behavior.

The price of ADA coins in the physical world is very important. In the digital world, ADA coins are just literally numbers. Coins sit on addresses and are owned by holders of private keys. Digital coins can have value only when it is possible to exchange them for something that has value in the physical world. Crypto exchanges serve as a place where people can sell ADA coins for fiat money.