Is cryptocurrency the Twilight Zone?

Many people ask about how secure is investing in cryptocurrency (Bitcoin, Litecoin, GridCoin or whatever), since their origin seems to be ethereal and not supported by anything material.

And sometimes is hard to explain to the people that "real money" and even "real investments" like stocks, bonds, etc., are not really that different from cryptocurrency. When you comment to somebody about it, their expression is of disbelief, and the first question is how could that be possible?

Well it is possible because the money we are use to, was created from a relative concept of value and as a way to trade things and collect taxes. This is an essentially complex concept because the value of something is not an absolute value, since it's the result of bargain between to parts, a buyer and a seller. And each buyer and seller has its own concept on the value of the things. That's why you don't find the same prices everywhere, and you are not willing to pay the same value for anything. All this as a result of the buyer's interest in making the most from its money, and the seller's interest in making the highest profit from its product.

And with the inception of the stock markets an additional and even more relative and dangerous concept appears, that is financial speculation. And this late modern concept is the main driver of the value of the "real" things right now, because its value is not decided by direct negotiation between interested parties, but by the market. And the market is the trend expected for the value of something, and financial speculation is betting on those trends, upwards or downwards, with the problem that the higher the risk associated with that bet, the higher the benefits for the winners. And the winners are normally those that have the capacity to manipulate those trends, because of its finantial power, priviledge access to information, political power, economical policies influencing and/or speculation.

So, as can be seen the "value" of real money and investments is dictated by people that speculates on its value and make profits from it, and under those circumnstances cryptocurrency is as real as anything else, because its value is driven by the same conditions mentioned above and because of this cryptocurrency could be in the Twilight Zone as any other "real" investment.