In the most recent market comment John Hussman shared his rather unpopular view on Bitcoin as an investment. I happen to essentially agree. Risking again name calling and obscenity from the Bitcoin lovers around, here it is "On the subject of Bitcoin, my rather unpopular view hasn’t changed at all: Blockchain is a remarkable algorithm. Bitcoin is a limited-supply token generated by a replicable, low-bandwidth, wildly energy-inefficient blockchain app, with neither government fiat, physical convertibility, nor reserve requirements to compel its use, or to make it something other than an abstract numeraire. The value of any currency is essentially the discounted stream of services it is expected to provide as a medium of exchange and a store of wealth. That value relies on the willingness of a whole sequence of successive holders to accept the currency. It’s turtles all the way down. Ultimately, the confidence of those successive holders requires some feature – fiat or convertibility – to pin it to the real world, so it’s not entirely self-referential. Thus far, the main use of these tokens outside of speculation seems to be for the purpose of exchanging the tokens themselves (which smacks of money laundering). The psychological value of these tokens seems to be largely based on the backward-looking sunk-cost of the energy wasted to “mine” them, by producing a validation hash (as “proof of work”) for a given block of transactions. Whoever produces that hash first gets paid. Everyone else’s computational “work” is completely wasted. It’s rather tragic from an environmental perspective, and I wouldn’t be terribly surprised if Bitcoin was actually a brainchild of the energy industry. There’s also a subtle Ponzi-like aspect in that once you own Bitcoin, you’ve got to participate in a future transaction block to get out, regardless of how much that future block costs to validate. Still, even if a bubble is entirely self-referential, it doesn’t mean people who get in early can’t also obtain a transfer of wealth from some subsequent speculator before the bubble collapses. It’s just that everyone assumes it will be someone else. Give people a limited-supply object coupled with a speculative mindset, and Dutch tulips gonna Dutch tulip. I also hear that on the Neopets app, paintbrushes and unconverted Neopets are selling for over a million NeoPoints."