The idea has become mostly popular as the value invested in bitcoin & other cryptocurrencies has marched up over the past year. Even after this week's selloff, provoked by China declaring initial coin offerings illegal, the value of all cryptocurrencies in circulation is around $155bn, according to Coinmarketcap.com.

That may sound small compared to the $7.8trn speculative value of the world's 187 200 metric tons of gold. At the same time, it is already about a tenth the value of the 40 000 tons of yellow metal used for investment as bullion bars & coins, & has overtaken the amount held in gold exchange-traded funds.

At more than $78bn, Bitcoin alone is not far from surpassing the $90bn-odd invested in all gold ETFs.

There are 2 main reasons to doubt bitcoin's viability as an investment. One is an engineering issue: Its squeaky infrastructure is prone to be a turn-off for all but the hobbyist fringe. Another is more rational: Digital currencies don’t have fundamental value, so have no place in a portfolio.

Both objections are weaker than you might think.

Take infrastructure. It is surely true that bitcoin's operations are amazingly clunky. Just confirming a single transaction normally takes more than an hour or longer - it briefly took more than a day at one point last month, according to software company Blockchain.info.

Having said that, financial markets are usually built on similar Rube Goldberg foundations. It is risibly hard for ordinary investors to buy an actual barrel of crude oil, as Tracy Alloway of Bloomberg News found out a few years ago.

The economist John Maynard Keynes, according to one probably apocryphal story, once measured up the storage capability of the chapel of King's College, Cambridge after coming worryingly close to having to take delivery of a month's worth of the UK's wheat supply. Effecting transactions in the real world is repeatedly so clunky that some banks are by now exploring using blockchains instead.

What makes markets  investable for the most part is not their physical foundations, but the superstructure of derivatives contracts, exchanges & clearing houses built on top.

To date, the world of bitcoin exchanges has been the wild west. When Mt. Gox filed for bankruptcy in 2014, it said it had lost 850,000 coins worth more than $450m.

Another $70m-odd was stolen in a hack of Bitfinex in 2016. The likes of Deribit & Bitmex have been offering bitcoin futures &options for a while now, but major institutional investors are only going to partake if they think the clearing & settlement process is rock-solid & the exchange itself dependably solvent.

Change on that front is looming. The Chicago Board Options Exchange is planning to start offering cash-settled bitcoin futures by next April, CNBC reported last week.

Trading platform LedgerX last month won regulatory endorsement from the US Commodity Futures Trading Commission to act as a clearinghouse for derivatives settled in digital currencies. The knack to short or take leveraged positions in digital currencies could open them to a far wider group of investors.

What, though, is the value of a digital currency?

It is a fair question, but one that could likewise be leveled at gold. Since Richard Nixon ended the fixed $35 an ounce convertibility of gold in 1971, its value has risen at times (the 1970s, the 2000s) & fallen at others.

The best argument to rationalize investing in gold nowadays is not that it is an eternal "store of value" but that its very eeriness makes it special: According to modern portfolio theory, you should buy the glittery stuff not for its superior investment returns , but because it does not correlate much to other asset classes like stocks, bonds & commodities.

Though, while gold did exhibit weak or negative correlations to returns on the S&P 500 for much of the 1980s & early 1990s, it has been positively correlated for long periods since then.

During gold's 2012 run-up, the 2 moved more or less in tandem. If gold merits investment dollars because its conflicting correlation with equities helps diversify portfolios, the same argument can be said for bitcoin, as well.

Digital currencies may be as crude as the original barbarous relic, but neither is going away anytime soon. If that makes investors in both look less like seers & more like problem gamblers betting on where a fly will perch -- well, welcome to financial markets.