Here’s a question; what is one of the most hotly-tipped investments by Wall Street of 2017, and yet has no value whatsoever? If you answered Bitcoin, give yourself a gold star. Having said that, neither does a dollar bill, a pound coin, or any other currency you care to mention. Unless it’s made from precious metal, it’s simply a promise of an exchange to the value of the goods or services being purchased.

Since the hard fork at the beginning of the month, Bitcoin’s value has soared, reaching over $4000 in recent days. Although Wall Street might still be hailing Bitcoin and other digital currencies as the future of sound investments, other fund managers are less convinced. Howard Marks of Oaktree Capital – a fund which manages somewhere in excess of $90 billion – calls Bitcoin and other cryptocurrencies “an unfounded fad” with a value of “little or none beyond what people will pay for it”.

He has advised his clients to invest – or rather, not invest – accordingly, and he’s not alone in holding this view. However, a similar mindset is advisable for any investment, as it really does boil down to the old axiom “only invest what you can afford to lose”. Other skeptics hold a conservative view when it comes to Bitcoin due to the lack of choice when it comes to spending it. However, with Bitcoin rapidly becoming a worldwide payment option for goods and services including flights and at certain retail outlets, any hesitancy – even a decade after Bitcoin first appeared – can still be viewed as the shock of the new rather than a lack of value.

Back to money having no value; Bitcoin really is no different. The only reason we ascribe any value to money at all is that we’ve come to view it that way. Even today, UK bank notes bear the words “I promise to pay the bearer on demand the sum of five/ten/twenty/fifty pounds”, depending on the denomination of the note. In fact, our paper money dates back to the 16th century, when goldsmiths and bankers gave receipts for gold or other precious metal deposits which came to be known as “running cash notes”. We’re still carrying running cash notes in our wallets – in themselves, they have no value. They’re still just a promise to pay the bearer. Does that sound familiar?

Like Bitcoin, gold reserves are finite, and it’s very difficult to manipulate supply and demand accordingly. However, we put value on gold because it’s been a universal currency for thousands of years – we’re only a decade into Bitcoin’s lifespan. Less than two hundred years ago, paper banknotes were viewed with similar suspicion, and indeed derision. If you replace the words ‘banknote’ or ‘paper currency’ in any 19th century argument about its lack of value with the words ‘Bitcoin’ or ‘cryptocurrency’, you would be hard-pushed to determine who said what and when.

The next time someone tells you that Bitcoin has no value, direct them to any scholarly article about the history of banknotes!