Crypto-currencies are risky as hell – but worth a punt

Sure enough, in the first week of September, the value of digital coins took a large dive. Bitcoin, always the crypto leader, fell by 17 per cent; Ethereum, the second most valuable crypto-currency, dropped by 20 per cent. Analysts have long been predicting a correction in this market, which has rocketed in 2017. Warren Buffett called it all a ‘mirage’ a few years ago. On other hand, John McAfee, the software entrepreneur and political activist, promised to ‘eat his own dick on national television’ if one Bitcoin was not worth $500,000 within three years. You never know.

What’s certain is that the amateur online investor is at a disadvantage. Most people who invest in Bitcoin have little or no understanding of what they are buying. We can blather all we like about chains of code, ledger systems and mining, and that’s fun, but nobody is quite willing to admit that digital stores of value remain a mystery to all but the geekiest.

Thousands of currencies with all sorts of funny names have sprouted up since Bitcoin emerged, and many are highly dubious. The 41st most valuable crypto-currency, for instance, is Bitcoin Dark (shady name, shady coin), but if you go to Bitcoindark.com, you see a red warning sign on the home page saying ‘developers moved to Komodo Coin … Komodo is the future!’ Komodo is the 22nd most valuable currency, it turns out, with a market cap of $371,253,359.

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Another is called Useless Coin, started as a joke about the sheer vapidity of digital money, but it still has a market cap of about $64,000.

Then again, all money is mystery, au fond, and you can go mad thinking too hard about it. And despite the recent tumble, there is a very good argument to carry on investing in crypto-currencies. It starts with the fact that a £100 Bitcoin investment made seven years ago could have made you a multi-millionaire.

Bron: https://www.spectator.co.uk/