Is cryptocurrency (bitcoin, ethereum, ripple) etc a scam?

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EternalLight
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My sisters husband wants to invest £50,000 into cryptocurrencies but is this stuff actually legit? It's just digital money I don't understand why people buy it.

He briefly explained the process but this is what criminals use to buy dodgy stuff right? I've been looking at it a little bit and the return on investment is unbelievable. Ethereum has had investment from JP Morgan, Microsoft and others and rose 4000% in value in 6 months.

It just seems too good to be true. Then I read about ripple and apparently 150 banks around the world are adopting it including RBS, Bank of Amercia and Bank of Abu Dhabi.

Is this just one giant scam or does cryptocurrency actually hold real world intrinsic value, like gold?
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Lord_Mediocre
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Simple answer is no!

Almost all currencies today are fiat currencies and rely on the users beleiving them to "currency".

Alternative currencies follow the same logic.
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Kravence
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It seems to hold value if you look at bitcoin but you have to catch it before it jumps up in value like the recent one. No point investing in it after it stabilises
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Rarest
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No, a guy I knew online bought bitcoin when it was much cheaper, and now that they have grown in value he got richer. Mostly he uses it for online stuff, there are lots of shops accepting bitcoin nowadays irl. But it is a risk, imagine if in a few weeks the value falls to like 10%, very unlikely but that would be hard hitting.
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23 and Grey
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I bought in at £60
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23 and Grey
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(Original post by The_Mediocre_One)
Simple answer is no!

Almost all currencies today are fiat currencies and rely on the users beleiving them to "currency".

Alternative currencies follow the same logic.
bitcoin has an upper limit on the number which can ever be mined so it does not act like a normal inflationary currency in economic terms

ether supports smart contracts but does not have an upper cap

they all have different uses and designs
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Thy Master
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(Original post by EternalLight)
My sisters husband wants to invest £50,000 into cryptocurrencies but is this stuff actually legit? It's just digital money I don't understand why people buy it.

He briefly explained the process but this is what criminals use to buy dodgy stuff right? I've been looking at it a little bit and the return on investment is unbelievable. Ethereum has had investment from JP Morgan, Microsoft and others and rose 4000% in value in 6 months.

It just seems too good to be true. Then I read about ripple and apparently 150 banks around the world are adopting it including RBS, Bank of Amercia and Bank of Abu Dhabi.

Is this just one giant scam or does cryptocurrency actually hold real world intrinsic value, like gold?
:ahhhhh:
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Helloworld_95
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No, but £50,000 is probably a bit too much at this point as a lot of cryptocurrencies have just peaked and are now dropping. In the near future it'll be a good idea as it will likely bounce back up, but investing in cryptocurrency is investment on hard mode so it would be advisable to do some other investments beforehand.

People buy it because of its volatility, someone who invested in Ripple at its low point and sold it at the high would have multiplied their investment by 60+ times in the space of a couple months. That is some insane short term returns.
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Ghaznavid
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It's not a scam, but 50K is too risky.
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Profesh
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(Original post by EternalLight)
Is this just one giant scam or does cryptocurrency actually hold real world intrinsic value, like gold?
Begging the question, since gold has no intrinsic value: try bartering a 24-carat Rolex for a tin of corned beef in soon-to-be post-apocalyptic London and tell us how you get on.
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Manitude
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Bitcoin is pretty legit, although is still subject to quite dramatic changes in price in small periods of time (like a few weeks ago when it pretty much doubled in price in the space of a week).

You can use BTC to buy real products so it is a valid currency for some things. I think it's a matter of time before it (or another crypto, although that's unlikely) becomes a mainstream way to buy things.
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Lord_Mediocre
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(Original post by 23 and Grey)
bitcoin has an upper limit on the number which can ever be mined so it does not act like a normal inflationary currency in economic terms

ether supports smart contracts but does not have an upper cap

they all have different uses and designs
Yeah that's true, it's follows a geometric decrease in the rate it can be mined.

It still relies on the end user having "belief" in its value and integrity as a currency.
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23 and Grey
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(Original post by The_Mediocre_One)
Yeah that's true, it's follows a geometric decrease in the rate it can be mined.

It still relies on the end user having "belief" in its value and integrity as a currency.
same applies to gold
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EternalLight
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(Original post by The_Mediocre_One)
Simple answer is no!

Almost all currencies today are fiat currencies and rely on the users beleiving them to "currency".

Alternative currencies follow the same logic.
But what is the reason for it's value? You just run a program and earn the digital currency and then just sell it for real money and shops actually accept it? I bet the governments hate cryptocurrencies because it takes the central banks away from them. They won't be able to control people with money if in the future everyone is using cryptocurrency.


(Original post by Helloworld_95)
No, but £50,000 is probably a bit too much at this point as a lot of cryptocurrencies have just peaked and are now dropping. In the near future it'll be a good idea as it will likely bounce back up, but investing in cryptocurrency is investment on hard mode so it would be advisable to do some other investments beforehand.

People buy it because of its volatility, someone who invested in Ripple at its low point and sold it at the high would have multiplied their investment by 60+ times in the space of a couple months. That is some insane short term returns.
I don't think he is investing just yet but he was talking about it. He has experience with investing so I'm sure he knows what he's doing. Just sounded a bit strange that some random made up money can be used to purchase things with cash value.
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23 and Grey
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(Original post by Profesh)
Begging the question, since gold has no intrinsic value: try bartering a 24-carat Rolex for a tin of corned beef in soon-to-be post-apocalyptic London and tell us how you get on.
Was about to say this. Buying bitcoin is anything from ideological libertarianism to speculation, but it's not investing, then again buying gold isn't real investing either.
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EternalLight
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(Original post by 23 and Grey)
Was about to say this. Buying bitcoin is anything from ideological libertarianism to speculation, but it's not investing, then again buying gold isn't real investing either.
Of course it's investing. You buy it now with the expectation that the price will rise in the future. When bitcoin was £10 people bought it as an investment, now they sell for like £2000 each!
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CHEM AND BIO TIME!
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(Original post by EternalLight)
My sisters husband wants to invest £50,000 into cryptocurrencies but is this stuff actually legit? It's just digital money I don't understand why people buy it.

He briefly explained the process but this is what criminals use to buy dodgy stuff right? I've been looking at it a little bit and the return on investment is unbelievable. Ethereum has had investment from JP Morgan, Microsoft and others and rose 4000% in value in 6 months.

It just seems too good to be true. Then I read about ripple and apparently 150 banks around the world are adopting it including RBS, Bank of Amercia and Bank of Abu Dhabi.

Is this just one giant scam or does cryptocurrency actually hold real world intrinsic value, like gold?
technically as long as people continue to believe/use bitcoin it can be quite lucrative..but the moment its use dissolves and a new form of currency comes along, be prepared to jump ship asap
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Lord_Mediocre
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(Original post by 23 and Grey)
same applies to gold
Absolutely, it's been around for thousands of years though and it's physical existence makes people a little more comfortable, it can't be hacked etc.

I'm not advocating for gold being better just saying what tends to make people think it has some sort of intrinsic value.
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23 and Grey
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(Original post by EternalLight)
Of course it's investing. You buy it now with the expectation that the price will rise in the future. When bitcoin was £10 people bought it as an investment, now they sell for like £2000 each!
What you've written applies equally to buying lottery tickets.

If there is no underlying value creating system, it is speculation rather than investing
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Thy Master
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Guyz check out ma guy tim zykez he gr8
http://www.timothysykes.com/
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