>Compare cryptocurrencies to, say, the U.S. dollar. The U.S. dollar is worth, well, a dollar because…well, because the United States government says it is. And because currency traders have established it as such, relative to other currencies. And the worth of those currencies is based on…well, like the dollar, they are based on a mutual agreement of everyone that they are worth whatever they are worth. The dollar is a myth.

The dollar is not a myth. The dollar is backed by the largest economy in the world. The dollar is controlled for stability. People are required to pay taxes in dollars to participate in the largest economy in the world. That is value in my opinion.

Bitcoin does not have this value or backing. Its price comes from speculation with no underlying justification. The online drug trade is not that big, and Bitcoin's extremely deflationary nature means it will not be adopted a base currency.

The people buying it right now are banking on it becoming a mainstream currency and them having a lot of control over that economy. I see no reasonable path to this happening. Even the fact that people are doing this means that it won't be adopted (and thus, spent) by average users, as the majority of participants are hoarding it or mining it for profit.

I think it's unfair to BTC to say that its price comes entirely from speculation on its future value. It's certainly a major component, but BTC also has value in its own right, derived from its special properties. So it's not quite like tulips, which were pure speculation.

Tulips can be grown and look pretty too...