5 Reasons Cryptocurrency Is Way Dumber Than You Thought
Hey, remember how you never invested in Bitcoin in 2009 because you'd never heard of Bitcoin and didn't really care about magic internet money? Same. And remember how in 2017, everyone and their uncles started talking about how Bitcoin was now worth a shitillion dollars and you totally should've gotten on the train in 2009? Same. So now "cryptocurrency" is everywhere, and barely anyone understands it. ("So it's basically new types of digital money that any jackass can invent, and then other people start treating it as valuable? And tons of assholes are getting rich just by trading it? Really?") Here's what we do know: Almost everything about it is utterly ridiculous.
Bizarre Celebrity Endorsements
The problem: There are hundreds of these cryptocurrencies now, so how does a new one gain credibility in a skeptical marketplace? The solution: celebrity endorsements, baby. Just ask the people behind Bitcoiin, and note the extra "i," which stands for "I can't believe Steven Seagal is the spokesman for this goddamned thing."
Meanwhile, Ghostface Killah, the Wu Tang Clan's financial advisor, is giving the world CREAM, except this time, the acronym stands for "Crypto Rules Everything Around Me." But that's kind of what you get when a man whose first name is "Ghostface" is working PR for you. Paris Hilton tweeted support for LydianCoin, and then had to backpedal when the CEO was convicted of domestic battery and assault. Also, their launch video looks like it was made by The Onion on an especially cynical day.
And because no one can outdo Floyd Mayweather when it comes to obnoxious bluster about money, he endorsed Centra, a company that made up its CEO. The image on the website was a Canadian professor who had no idea what the company was. A good tip regarding any financial opportunity: If your company made up its CEO, you might want to not go in for more than a double-digit investment.
There Is A Wave Of Stupid Currencies
You presumably know about Bitcoin, possibly from an evangelist who hopped onboard a few years ago, made a questionable amount of possibly fake money, and can't wait to spread the good word about how out of luck you are. But did you know that there are also about a thousand other cryptos out there, ranging from the more normal ones like Ripple to the bizarre Dogecoin, based on the unkillable meme and somehow now worth over a billion dollars? And there are even more preposterous currencies out there too, all vying for their slice of the "we just pretended we're millionaires and it came true!" pie.
BunnyToken is trying to position itself as the official currency of the $100 billion adult industry, selling its growth with a Playboy-esque rabbit theme. So are our profits going to be multiplying like bunnies? I just ask because it's weird to base your business model on the question "People know that rabbits screw a lot, right?" And for those less interested in virtual currency to spend on porn, maybe because you need a root canal and your masturbation schedule has been disrupted due to tooth pain, there's Dentacoin. It's for paying your dentist, because why not? You probably have money, and your dentist accepts that shit, but why not use this currency that's not good for anything else instead?
Prodeum was a recent currency that managed to raise $11 during its initial coin offering and then vanished, replacing its website with the word "penis," which is exactly what I would have done had I thought of it first. And in the same throbbing vein is Useless Ethereum, a cryptocurrency that repeatedly tells you on its own site that it's not worth anything and all you're doing is giving your money to a stranger so he can buy a TV. In fact, the site has a running tally of how much money people have sunk into Useless Ethereum (about $175,000), and in turn, how many TVs can be bought with that money
While many of these currencies seem to have no real purpose, Russian Burger King gave us Whoppercoin, which you could use to buy Russian Whoppers. Get 1,700 Whoppercoins (which works out to spending about $30), and you get a Whopper. For $30, you can get 7.15 American Whopper meals, but that's beside the point. The point is that it's crypto, guys! Whatever that means.
There Is Rampant (And Ridiculous) Thievery
TRIVIA TIME: Is a currency that doesn't physically exist harder or easier to steal than the sock full of quarters that I definitely don't keep under my bed? ANSWER: Waaaay easier, because that sock of quarters that isn't under my bed can only be stolen from not under my bed, while something like $500 million in a cryptocurrency can be stolen from anywhere on Earth, and was indeed stolen from Coincheck in Japan in early 2018. It was literally the biggest heist in the history of stealing shit ever. But who cares, right? Cryptocurrency is super secure, because .
That Coincheck heist was beyond any bank robbery in real life, and while Coincheck is refunding the stolen money, they didn't get the actual stolen funds back. No one knows who took it, and the security measures that monitored where the money went have since been removed, because crime-solving is hard. The money is never coming back, and seems to have mostly been funneled into the deep, dark, dirty web.
In fact, over $9 million per day gets scammed in the world of cryptocurrency. Which is a lot, right? Like, I don't have anywhere near that much money, so it seems like a lot to me. But it's par for the course in this realm, until someone figures out a way to make it harder to steal. But even that probably won't stop hackers from just using your WiFi to hijack your device when you're sitting in Starbucks, forcing your machine to mine cryptocurrency for them using a process not even your computer fully understands.
Companies Are Rebranding To Jump On The Bandwagon
Imagine if you sucked super hard at life and decided you needed to shake shit up to not suck, so you let everyone know that you were putting suck on the back burner and changing your name to Artemis Bitcoin FinTech Blockpunch. Would that make you a better person? The question is rhetorical, because of course it would. And businesses know this, which is why so many of them did almost exactly the awesome thing I just mentioned.
Consider the Long Island Iced Tea Company, a boring if not fairly straightforward name attached to a business that made the titular beverages. And then they changed their name to Long Blockchain Corp, causing their stock value to increase sixfold. They literally did nothing else. They didn't implement any changes or discover a bunch of enchanted rubies in the cellar. They announced they were going to become a cryptocurrency business -- something any small beverage company is of course set up to do at a moment's notice -- and that they would buy 1,000 Bitcoin mining machines, or what the layman might call "computers."
Here's the kicker: They never bought those machines, because you can't float them in vats of iced tea, and even if you could, who cares? The stock already went up! Now to keep that sweet interest flowing, they say they're going to partner in the future with a blockchain company and something something profit.
SkyPeople Juice International Holding recently shook their shit up by becoming Future FinTech. The company, most famous for making juice -- because as I already established, beverages and Bitcoin go together like beverages and Bitcoin -- switched gears and saw a triple increase in stock prices! But unlike Long Blockchain, Future FinTech didn't promise to mine Bitcoin, or work with anyone who does, or actually anything of the sort. They want to get into e-commerce and commodities, which is kind of what they already do, but now with a new, hip name. But their stock still increased because it sounded to others like they were going to do something. What they do say is that they're "a financial technology company and integrated producer of fruit-related products," which maybe is how Fruit Roll-Ups were invented. That's the power of rebranding in the world of cryptocurrency.
Kodak announced plans to start their own cryptocurrency (which they've since pushed back) that would somehow protect the works of photographers, and their stock shot up like a rocket. There was even a company that used to make sports bras which decided one day to become a cryptocurrency consulting firm called the Crypto Company, and they saw their stock explode 57 times over. And then the SEC shut down trading for the business, because as it turns out, people get oddly suspicious when a bra company becomes a multi-billion-dollar cryptocurrency firm out of nowhere.
It Wastes A Ton Of Energy
I mentioned earlier that cryptocurrencies are "mined." Basically, imagine an invisible resource that can only be extracted using lots of complicated math that requires thousands and thousands of computers. Well, because of all of those machines running around the clock, a single Bitcoin transaction has been estimated to use as much energy as your house will use in a week.
Now, the metrics on Bitcoin waste are hard to pin down. Most come from one Digiconomist article that makes a lot of assumptions, but it's also not outright making stuff up. Whether it's the entire amount of energy used by Greece or Iraq in a year, it's still taking a shit-ton of power to create nothing whatsoever. And a lot of that is being used and generated in China with fossil fuels, for that extra, secret layer of "fuck you" to everyone else.
In theory, with software improvements, Bitcoin could become more energy efficient and maybe stop burning buildings down, which is literally a thing that has happened more than once. But for now, one estimate had Bitcoin using power equivalent to what 30 1.2-gigawatt nuclear plants generate, all day every day. Do you know how many times that could send Marty McFly back to 1985? Fuckin' several.
Some are trying to mitigate the waste. People are setting up mining operations in the Arctic so that the overheating is less of an issue. One dude is using the excess heat from his mining PCs to grow tomatoes, while others have just decided to use it to heat their homes -- and those are just recovering small amounts of the energy that gets wasted as heat radiating from the processors.
We may go around talking about how badly baby boomers screwed over the planet with their SUVs and heated pools, but at least they didn't burn up several coal mines' worth of energy on what may turn out to be an ephemeral get rich quick scheme.
You're honestly just better off putting your money into a literal piggy bank. It's probably more secure.
Support Cracked's journalism with a visit to our Contribution Page. Please and thank you.
For more, check out 4 Reasons Bitcoin Hoarders Are Screwed and 6 Everyday Objects You Had No Clue People Once Used As Money.
Follow us on Facebook. It's free.