Referencing "unpublished" works

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On arXiv I found this paper, the subject of which I am interested in. It was submitted to arXiv on 24 Dec 1998, so some years ago. However, I cannot find this publication in any journal from this date onwards. So, what is the credibility of this paper? I realise I could work through it properly and form my own opinion, but who cares about my opinion, especially if I were to reference it. Is it okay to reference a paper on arXiv even when it has not been published in a journal?

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I was not aware until just now, but this is a pretty good discussion on Math Overflow.