Howard Marks, one of the most respected value investors out there, starkly warned his clients to avoid high-flying digital currencies.
“In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” Marks wrote in the investor letter Wednesday.
Ethereum cryptocurrency is up more than 2,300 percent year to date through Wednesday, while bitcoin is up nearly 160 percent this year, according to data from industry website CoinDesk.
Well respected investor and Hedge fund manager, who predicted the dot-com bubble is voicing his concerns about the surging digital currency in value.
It has notable investors like paypal billionaire founder Peter Theil, accepted form of payment by Microsoft, and being openly endorsed by Bill Gates.
The speculation is interesting.
Pyramid schemes have been used to con people for many years because they are run by very clever people. A sucker is born every minute.
With regard to crypto-currencies (Bitcoin, Ethereum etc), yes they are accepted by blue chip companies. They could even be accepted by big banks.
If you have money in a bank, and it faces collapse, you have a chance to recover your money because it is the responsibility of the central bank to supervise the banks.
But ask yourself this question, if a crypto-currency collapses, utalilia nani?
This does not mean you should not use the currencies, or that you should not invest in the sector, but consider it a high risk investment.
Big time con tricks succeed because they are endorsed, or appear to be endorsed by prominent people. Remember the year 2000 bug con, or the tech bubble of over a decade ago.
In most western countries you can use bitcoin to pay for services and purchase items from many companies. However, since cryptocurrencies may in the end replace the dollar in international trades. The US government and some other countries are always searching for ways to fight it.
Earlier this year the UN indicated that it wanted to adopt bitcoin and ethereum because it would enable them to eliminate the cost that is incurred when sending money to other countries eg currency conversion, tax etc and reduce the risk of people stealing the money before it reaches the recipients. https://www.coindesk.com/the-united-nations-wants-to-accept-ethereum-and-bitcoin-and-soon/
Bic Camera which is one of the major chain stores in Japan that has 260,000 stores is planning to start accepting bitcoin this year. https://news.bitcoin.com/bitcoin-accepted-260000-stores-summer/ .
Now imagine if in a few years some of the companies in Japan that export used cars start accepting cryptocurrencies.
Currently if you are purchasing a used car from Japan that is being sold for 5000 USD, in the conversion from KSH to USD you will loose around 15000 KSH ( banks selling 1 USD @ 106 KSH, while currently 1 USD = 103KSH). Additionally, in the purchase price of the used car, the seller has also factored in his/her cost of converting USD to Japanese Yen and there`s also the bank charges for sending the money.
As a result the real cost of sending the money to the car seller maybe around 30,000-35,000 KSH. This cost would be significantly reduced if the transaction was carried out using cryptocurrencies.
People who spell doom for Bitcoin and other crypto do not understand the monumental leap in humanity that went towards creating the technology.
The internet was designed as a place to share copies of data. When you receive an email, you are receiving a copy. When you read a tweet, you are reading a copy.
For the first time ever, blockchain technology allows people to send the original and not remain with a copy. This is just what is needed to maintain the value of a currency.
Before Bitcoin, sending money over the internet required a middleman, eg. Visa or PayPal. Right now, you can send virtual currency without paying any fees to anyone.
This blockchain technology is the future, and its uses are not limited to virtual currencies.
Bitcoin, Ethereum and other crypto currencies are the future.
Anyone calling this a bubble or pyramid scheme hasn’t sat down to study what the technology is all about. If they were around in the 1950s, they would probably call the transistor a ‘bubble’, and invest all their cash in vacuum tubes.
The ignorance in this post is shocking. A pyramid scheme has someone at the top to benefit at the end.
Bitcoin has nobody. It is a DECENTRALIZED currency.
You’re basically asking, “If the internet collapses, utalilia nani?”
And by the way, you store Bitcoin on your local computer or an external wallet/flash disk. Only naive people put it anywhere online.
Your ignorance is amazing. Comparing Bitcoin to INTERNET is like comparing a car to a road!
In the future when the Bitcoin bubble burst happens, I hope this thread will still be around.
Anybody claiming Bitcoin is not controlled is lying. Everything in the internet is controlled: Tor is controlled, VPS is controlled, Crypto-currency is controlled.
Like I said in my earlier post: This does not mean you should not use the currencies, or that you should not invest in the sector, but consider it a high risk investment.
I did not ‘compare’ Bitcoin to the internet.
I was just trying to explain the meaning of decentralized to the layman you clearly are.
Bitcoin/Cryptocurrency is not a bubble. It’s a new technology. The prices will go up and down all the time but you’ll die waiting for it to burst.
You can take your sh200,000 and buy a 50/100 plot in Ruai. I will put the same in Bitcoin.
10 years from now, I can tell you for free who will be much richer. It won’t be you.