Thread: are cryptocurrencies a scam?

My friend is into them. He says he's making allot of money. He says I should get into it. I'm scared.

Originally Posted by filix

My friend is into them. He says he's making allot of money. He says I should get into it. I'm scared.

What do you think Warren Buffett would advise you to do?

Not a scam but a very high risk investment. Very possibly a bubble that is near the peak.

Typically a money is just a successor of the barter scheme which facilitated exchange of some real goods or services on other goods or services. In this regard a cryptocurrencies similar to bitcoin awoke suspicion because if we assume they will be recognized as a real value, then why people who produce some real good or services (like cars or potatoes) suppose to exchange these real goods for bitcoins which aren't backed by any real goods or services (can be generated out of "thin air")? Traditionally it would be viewed as a typical "Ponzi scheme"...

If you don't have a large amount of disposable income (as in, if your investment would be a sizeable chunk of your personal finances) then I would strongly recommend against investing into cryptocurrencies. It's a volatile investment with high yields and high risks and the best case you come out richer and the worst case involves you defenestrating yourself.