Bitcoin itself is certainly not a fraud. I don't think anyone truly expected it to get anywhere until it did. It was just a possibly great idea, and a proof of concept. But these also-ran cryptocurrencies are increasingly more suspicious.

As for the value in bitcoin, it lacks state backing and so-called inherent value. I say so-called because it is a technical term which technically applies in this way. It's theoretically an exceptional currency (if you can wait 10-40 minutes), but a poor store of value, in almost exactly the way that is a poor store of energy. You'll never get all of it out, but that's okay in physics and, I suspect, in economics too.

Bitcoin is strange to economics. It certainly defies traditional analysis. I don't know if it's viable. But should it fail there's more to it than simply being deflationary and lacking inherent value. If nothing else, it's far more interesting than that and we ought to study it regardless of how we feel about it. We have an opportunity with all of this publicly-available data, a rare one should the venture fail.

Are the buyers smart? Many are doing it profitably, and not just by speculation, but by avoiding local economic disasters or by purchasing ~cough~ goods not otherwise available to them. I think the vast majority of the losers are speculators, and that's fine by me. They surely help inflate the value, but I don't believe they're responsible for its viability.

Whoops, sorry for the essay.

See you, space cowboy.

How many securities with iffy backing has J.P.Morgan made? I doubt the CDOs (happy mortgage fraud bonds) were the only time they created funds out of nothing.

Note that the whole point of government control is likely control by Morgan and Sachs.

Wumpus

The current price is fuelled by one exchange that is literally making money out of thin air (USD tethers - you can google for details). Combine that with this ICO nonsense that is, in turn, fuelled by Bitcoin payments - when this bubble bursts it is not going to be pretty.

I do enjoy seeing people criticise a guy that represents an industry that routinely invests in Peruvian farming supplies (and I do mean that literally). Barclays in particular were notorious for their South American investment portfolios.

And yet - apparently this dude is too goody two shoes for Bitcoin? Well bless their cotton socks.

Bitcoin is a very poorly implemented distributed DRM to stop people copying and pasting values.

The tech is outdated, the implementation banal, and the end result? God dammit, this is not the future we were promised!

I've got my money in tulips.
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[ucblockhead is] useless and subhuman

is because there are people who depend on it to make anonymous transactions for presumably illegal reasons. These people create a base level of demand for bitcoins which creates a market that is open to others who don't have to use bitcoins but might if it was convenient. At some level this is similar to the dollar in that people hold dollars because there exist people who have to use dollars to pay their taxes. 

So, yeah, in the sense that bitcoin's value is based on criminal activities (with vast amounts of speculation piled on top...) pretending that it doesn't constitutes some sort of fraud.

What I'm really curious about, though, is what happens when the last bitcoin is minted and all those bitcoin miners are suddenly out of work...

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An Angry and Flatulent Pig, Trying to Tie Balloon Animals