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Bitcoin immediately came to my mind too. Personally, I think 'the greater fool' scenario works. Once there is a critical mass of 'fools' it will be very difficult to completely dispell the value of the asset. Furthermore, the more time that goes by that a critical mass of 'fools' exchange and desire this asset, the more difficult it becomes to dispell. Although income taxes collected specifically in that currency definitely butresses the fools delusion, I see it as an arbitrary value judgement. That is, the fact that I can exchange BTC for $ to pay my taxes might give value to BTC, but the fact that I can exchange $ to BTC to buy heroin also gives value to my $.