Bitcoin is the greatest scam in history
In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen. In a pump-and-dump game, promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices. And some cryptocurrencies are pure frauds. Ernst & Young estimates that 10 percent of the money raised for initial coin offerings has been stolen.
The losers are ill-informed buyers caught up in the spiral of greed. The result is a massive transfer of wealth from ordinary families to internet promoters. And “massive” is a massive understatement — 1,500 different cryptocurrencies now register over $300 billion of “value.”
It helps to understand that a bitcoin has no value at all.
Promoters claim cryptocurrency is valuable as (1) a means of payment, (2) a store of value and/or (3) a thing in itself. None of these claims are true.
1. Means of Payment. Bitcoins are accepted almost nowhere, and some cryptocurrencies nowhere at all. Even where accepted, a currency whose value can swing 10 percent or more in a single day is useless as a means of payment.
2. Store of Value. Extreme price volatility also makes bitcoin undesirable as a store of value. And the storehouses — the cryptocurrency trading exchanges — are far less reliable and trustworthy than ordinary banks and brokers.
3. Thing in Itself. A bitcoin has no intrinsic value. It only has value if people think other people will buy it for a higher price — the Greater Fool theory.
Legit currencies, all of them, are backed by the tax power of the authority that issues them.
Regardless if it's a "scam," "legit," or not, if I decided to sell at this very moment, that's $2400 for doing almost no work at all. That's about a month of saving money while working (on a good month with no large purchases). That's all I care about, personally.
The "pump and dump" thing seems to be what happened last week, but it's back up to where it was already. If you can withstand the wave and just hold for a while, it's probably a good idea, since the long-term trend is only going upward.
And decentralized currencies, despite the volatility, probably should exist anyways, since centralization means single point of failure, so you really have to put utmost faith that correct decisions are made. Really, everything is a gamble, but more options are always better.
