1. Katie

    This is a great break down in the bitcoin mania, personally I could never get my head round it, kind of felt like you can just create any digital currency you like, but what is backing it up it, cyber space !! least with other investments you have something tangible support you investment. for people wanting to build up investments there better ways, I know people who have made serious money just buying the right sort of whisky or gold coins low cost risks that can bring worthwhile yields

  2. sergio

    I couldn’t agree more with you. Yes all those cryptocurrencies are only a fad just like it was those Fidget Spinners last year.

    Soon lack of demand will bring BitCoin and others to crash since there is no real value behind, like currency is backed by trust in the government.

    Cryptocurrencies are just that a novelty online since most major retailers don’t accepted as a form payment.

    • Kyle

      I think you are probably going to be quite right with your analysis, the fact that Bitcoin hasn’t changed from when it was $6 to $20,000 other than the fact that there was hype created demand behind it, to me is very scary.

      I have spoken with a lot of seasoned institutional investors and they have unanimously thought the same thing. They don’t trust crypto at this stage of the gain, they typically understand the benefits of some of the technologies, but the currency itself is not a viable one, it’s value is artificially over inflated, and at the end of the day the only value is “what” someone is willing to pay for it. 

      • Brian

        Here’s what I don’t fully understand with Bitcoin and some of the other cryptocurrencies. Instead of just buying this digital currency outright or exchanging other cryptocurrency, you can “mine” them but it apparently uses a lot of resources and a lot of electricity.
        I recently read an article where “mining” for Bitcoin is driving up the prices of high end graphics cards and the graphics cards makers are not happy about them being used in this way. Also I read that transaction fees for Bitcoin are quite high right now so I don’t any viable use for using this particular cryptocurrency.

  3. Brendon

    Great article! I have to say that I agree with you on the Crypto Currency craze.
    What happens to peoples wealth when one of these companies creating Crypto goes under? You Lose!

    Just like in the stock market, there will be winners and losers. I think people are nuts over Crypto’s because we have not yet heard about those that lose everything when one tanks.

    As of right now Crypto’s might be good to jump into, but only for a quick score and then cash out. It is only a matter of time before we see one of the larger Crypto’s crash, and we will see the rel ripple at that time!

    Thanks for sharing your thoughts o0n such a hot topic!

    • Kyle

      it’s like going to the casino, people only share their wins, not their losses.

      I see the same thing going on within the cryptocurrency world.   You have people that brag about how much they have made on a certain day when a currency goes up 20%, but all you hear is crickets when the same currencies are dropping 20-30% in a day and they have just lost all of their gains. 

      It is also strange behavior when people are defending currencies and they get mad if you make argument against them, with valid arguments.  This is a sign of a gambler or someone involved a scheme (and they have to always be a proponent), not an investor.  

      As an investor I’ve never gotten upset when someone has something negative to say about a stock, about the real estate market, etc.  These should be taken into consideration when making your decisions as you should be able to see both sides of the playing field. 

      You’re not seeing this within the crypto hype world, people are pumping up their own ‘coins’, and they talk down to you and throw insults if you try to have a meaningful conversation about the drawbacks and adverse scenarios that could be created. 

  4. Stella

    Hi there,

    May I add my 2 cents?

    I have a friend who is the son of a property developer. She was going to show him the ropes of how to have a property portfolio.

    He is always upstairs in his room at a computer finding out research on nutrition and natural methods of healing the body.

    However, he now has made over £10,000 and has told his dear Mum that he is not going to do property as he is earning way too much money easily with Bitcoin.

    Go figure…

    • Kyle

      This same son, is going to come to his parents in a year and ask them what this whole “property management” business was about with intrigue. The type of ‘investors” that crypto has brought out truly reminds me of an inexperienced options trader.  Easy come, but easy go.  

      It is easy to say it is the best thing in the world when it is going up and that you are a “skilled  investor”, but when it claws back down, the ego check happens and most people simply cannot jump ship in time (and end up losing everything).

      2018 is certainly going to be an interesting year within the cryptocurrency world. 

  5. Josh Ray


    I really enjoyed reading your article. I have myself battled with this idea of them being a Ponzi scheme. I must add, I am invested in some of the altcoins and have seen a relatively high ROI.

    Many of the coins serve an underlying purpose from my experience. (The ones I’ve supported) Things like connecting grocery store chains, logistics, etc.

    Though, I have had some unfortunate experiences like an exchange shutting down or no longer trading some coins. There is certainly risk and volatility.

    I began studying cryptocurrencies in 2015 for a study within my Master’s Degree. I was curious to learn more about them. The blockchain tech to me is remarkable.

    Now, Getting to your idea about them having no value. I believe that if we as humans see value there is value. Simply like a barter or trade. Instead of with a tangible thing like a bar of gold. It’s 0 and 1 or whatever decimals.

    I feel cryptocurrencies and fiat currencies need each other to balance out some of the wealth. Just like cryptos being minded out of “thin air” or mining machines. Fiat money is printed from “Thin air” or the printing press, after all, it is just paper and no longer backed by anything but a market of numbers managed by people. To me sounds the same as cryptocurrencies. The difference is individual people are creating the coins and not a government.

    The only difference I see in fiat and cryptos is I can touch the fiat paper. But If I look at my bank account it’s just digital numbers on a screen, the same as if I look at my cryptocurrency account digital numbers on a screen.

    Thanks again, Great Chat!


    • Kyle

      The worry I have is that these can be created out of thin air and they are being labelled as currencies.  Yet, you can’t spend them.  Yet they only go up in value based on demand, and you can only actually use your money if you cash out your alt coin into fiat currency.

      I would have to agree with you, the blockchain technology and the companies embracing this and offering ICO’s based on the technology and platforms they are creating are far more legitimate, but they are not currencies, they shouldn’t be called that, unless there are tangible things that you can purchase and they have an actual underlying value outside of the demand creating (mostly through hype and social media). 

      Fiat and cryptos are not closely related.  A bank is digital, yes.  But so is a piece of software, so is a game you play online, so is your apple watch health data.   MONEY, fiat currency, is protected backed by countries.  Yes, the stability of a country, the economy,  their debt, and QE will play a roll in the value, but it isn’t a fair comparison to compare the existing state of cryptocurrencies to that of fiat currency.  Apples to oranges.

  6. Phil

    Hi there,
    I have just read your great review on Crtptocurrencies with more than a passing interest.
    There is a lot of talk and discussion in the media presently on that particular topic, some good and some not so good.
    The real Bitcoin is legit and unfortunately other dodgy operators decided to piggy back on the success that Bitcoin was having and created their own bitcoin companies. The internet was then flooded with loads of cryptocurrency start up businesses promising us real returns on our investment and so on.
    I know that one such company over here in Europe was closed down, prevented from doing any further trade and was fined serious money as a result. They were exposed as a pyramid and ponsi outfit and had their licence teminated. We need governments and financial regulators to come down hard on these scammers and prevent unsuspecting, honest, hard-working people from losing their hard earned cash.
    Thanks again for the great review.
    Cheers PB

    • Kyle

      There is there’s definitely a lot of shady stuff going on within the cryptocurrency world, that is the problem with anything that is unregulated and from what I have seen, has drawn in some of the biggest scammers and schemers from the online world.  

      It is unfortunate, but a lot of people are going to lose a lot of money and a lot of people are going to be taken advantage of because of the height and the internal desire to make money FAST without having  to do much. 

  7. M Anand Kumar

    I am sure that any one will be overwhelmed becoming a millionaire the Crypto currency way.

    I agree there is no intrinsic value to Crypto currencies.

    They are just blind investment with Zero value. Their value changes drastically with volatile sell offs/high demand.

    I was also pondering on getting onto the bandwagon.

    Thanks to the insights on your post, I have decided otherwise.

    • Kyle

      They’re certainly applied investment by most, and it is interesting to see people that have not invested in anything in their entire lives that are now purporting to be expert investors after a few months investing.   It’s simple, they are not.  

      If you are going to jump on the bandwagon, do so at your own risk.   I would consider buying on significant dips of a more established cryptocurrency, but I wouldn’t dive in too deep.  It is no different than going to the blackjack table and risking your money there.

  8. Prabakaran

    The Bitcoin and cryptocurrencies are the hot topics trending worldwide at the moment.Although I know something about these digital currencies still I wonder where it originates from and which authority control the digital currency? On what basis do these currencies value is decided? 

    As we, know Indian Ministry of finance has warned about investing in bitcoins.A couple of weeks ago I read a news about a South Korean Cryptocurrency Company declaring bankruptcy due to hacking. Hence, In my opinion, people should think twice before investing in such schemes.

    • Kyle

      No authorities controlled cryptocurrencies, that is the point of them.  They are decentralized and deregulated.

      On paper, this sounds good as people have lost a lot of trust for banking and government platforms.   The problem is when there’s no regulation, there is a lot of fraud and a lot of people are going to lose money as a result.  

      This is one of the primary reasons why governments are going to step in like South Korea and potentially by cryptocurrency trading.    Not only are they used for tax invasion and the purchase of illegal goods, There is a high rate of potential fraud and we have already seen this with some of the biggest schemes in the last 10 years created based on the cryptocurrency hype (billion dollar scams).

  9. Roopesh

    I too have heard of many of these cryptocurrency success stories. Yet, you made me realize that many folks out there do not hear the other side of how these same people have lost or have had to suffer when these currencies suffer encounter market lows.

    You just confirmed my suspicion about Cryptocurrency being A Ponzi scheme. I recently watched a video of a highly enthusiastic man singing praises for a scheme called Usi tech. He was actually very convincing and I was tempted to sign on. Something told me to wait and now I heard it had closed its doors. I feel sorry for that guy.

    It would be interesting to see how things unfold until eventually the bubble burst. I guess it is just a matter of time.

    • Kyle

      Most are unwilling. It reminds me of the cult mentality of some of the biggest pyramid/ponzi schemes that are operated.  People lash out if you have any object to their “investment”, which is bizarre behaviour and is consistent to being involved in a ponzi scheme.  If you have naysayers, they could adversely impact the value of the “made up” value of the currency. 

      If demand and hype diminishes, so does the value and people end up losing everything.  That is the reality as to what will happen with many of these as there is no intrinsic value outside of a manufactured demand created by “investors” who want to get the most out of their money by yelling how amazing their alt coin is.  When that coin starts to go down, they tell people to move to something else.

      Lots of people are starting to lose a lot of money in the cryptocurrency world and this is just the start. 

  10. Stephen

    Hello Kyle,

    I’m so glad I read your thorough explanation on Cryptocurrencies today. I almost fell into this this scheme, thinking I was going to make some investment.

    A friend of mine introduced Cryptocurrency to me and the way he spoke of it, it looked so attractive in my eyes. In fact he made it looked as though it is the best invest ever.

    But as you explained, the value of Cryptocurrency can go high and at the same time can also drop overnight.

    I don’t think I will take such a risk and invest my money into something that almost looks like gambling. You can loose your precious and hard earned money at anytime.

    Thanks for revealing the truth about Cryptocurrencies to me.

    • Kyle

      If  they  don’t present it as the “best investment ever” you won’t buy into it.  That is my main argument about this currency, it is not.  Nobody, ever,  has sold a currency or had to pitch a currency as the “best investment ever”. 

      That is where the scheme lies.   Those involved in their particular coins, are trying to convince  you to invest into the coin, as you along side others will create demand and inflate the value (and they make money as a result of you).  It is pretty unethical for a friend to do this, if that is their pure intention.  

      Nothing ever goes up forever, and we are seeing that.  Cryptocurrencies went up far too high, and I think that as we move through 2018 there is going to be some sense of realization that new fiat money is the main requirement for inflation of the currency value, and old money cashing out will completely deflate the value of the currency.  

  11. Hi Kyle,

    It seems that you’re only concentrating on the negative sides of cryptocurrencies and projects around them. Yes, there are lots of Ponzi scheme. Yes, there are scams.

    But have you studied any of those projects more in detail? Take for example Ethereum, BitDegree (a new project. Similar to Udemy, Coursera, etc) and many others.

    What about faster and cheaper transactions? I realized some real-life situations in my previous company where cryptocurrencies would have been much more practical and better than slow and high-fee banks.

    There are many projects that have have real value.

    At the beginning I was very skeptical like you were but after seeing the value in real life I had to change my opinion. I also studied different projects for hundreds of hours in total and I keep on studying more about them daily. I can’t deny some obvious benefits that some of them provide. I’m excited to see how some technologies and projects will look after 3-10 years for example.

    Still, I completely agree that there are Ponzi schemes and scams also. Most famous one is probably $2,5B Ponzi scheme called BitConnect.

    • Kyle

      I wouldn’t argue, there are legitimate companies embracing the Cryptotunity. But the problem itself is they are doing so to capitalize on the hype in many cases. How to trade crypto? Yes, sure, some great programs out there I wouldn’t argue. That is far from my argument here. I am arguing the idea that cryptocurrencies in fact are not acting like currencies at all. They are not companies, they are not stocks.

      They act as investments, yes. But there is no fundamental or intrinsic value to your investment, outside the idea that someone will hopefully pay you more for your Bitcoin or alt coin, then you paid for it. That is the value. To create and sustain this value, you must become and avid support of it and continue the hype.

      Why would anyone in their right mind that is invested in BitCoin, or Ripple, or Eth, indicate that it is not a good idea. They want MORE people, not less coming into the pool because it will inflate the value of their own coins. That is the premise of the “investment”, not it being a currency, not blockchain, rather the hopes to make money on this manufactured demand.

  12. Dr. Doug

    I think you hit the nail on the head when you said “The majority of the time they are being spent, its when someone takes their capital gains through “selling” their crypto to the next person, and exchanging it into an actual fiat currency.” 

    So crypto-currencies have the down side of always needing to be converted to fiat and that keeps them dependent on the fiat market and how they are valued there. 

    I see the problem here. As spending itself becomes more virtual – a transfer of funds – and less apt to have a printed dollar for every spent dollar, do you see the legitimacy of crypto growing?

    • Kyle

      Well that is the current problem, because you can’t really spend cryptocurrencies.  Most people spending them, are spending them on new currencies.  

      There will not be retail adoption any time soon with the way these “currencies” are  behaving, they are not a currency because they are rooted in ‘zero value’ and they are not accepted as  a form of payment, and their only value is the value created by the current urgency and demand to “jump in”. 

  13. Arun

    I am against crypto less than I am against the constant spam I get on ever social media that I visit that is trying to sell me on crypto. Could you imagine if a currency acted like this.

    What are your thoughts on the social media aspect and that involvement in the success and the success of many currencies?

    • Kyle

      To be honest with you, I think without social media and the presence of it within our lives, I feel that Bitcoin would be less than $10. Cryptocurrencies gained hype, primarily from social media and the constant spammy reminders we get ever fold of the page about cryptocurrencies.

      This leads to my parents asking about it, your taxi driver talking about it, and people that certainly shouldn’t be buying the currency, spending money on it amplifying the prices to an area that it should not be sitting.

      This is outside of all of the scams being shut down within this space. The most recent one, BitConnect with many more to follow. Unfortunately you have a large subset of opportunists (some would call them scammers) that bounce around from scheme to scheme, looking for something NEW to promote to their herd. Most have run out of ideas, jumping from weight loss schemes, to “fake” affiliate marketing schemes, to alkaline water machines, now over to cryptocurrencies.

      A lot of people still stand to gain (those that got in early), but there are a lot of “retail” investors that are starting to get in right now and over-invest that are going to lose their shirt to crypto. My prediction anyways.

  14. Chris

    This was definitely an interesting view point on cryptocurrencies and raised some interesting points many of which i agree with such as investing in crypto not being a solid long term investment. I dont agree that cryptocurrencies have no actual value though, I really do think they will be around for a very long time as having a decentralized currency that is independent of the government and major banks has many advantages.

    But then again it is undoubtedly true that as it is at the moment, crypto really is more of a stock than a currency.

    Thanks for the interesting post.

    • Kyle

      I am still unsure of all of the advantages of having a decentralized and very much “unregulated” currency are.  I have yet to see a solid argument for this, other than people making this blanket statement without providing sound underlying reasons. 

      Faster transactions?  Well, we already have that with our current systems.  Yes, I can’t buy a house in 2 seconds through our existing banking system, but I don’t want to either.  I want to purchase houses in a controlled environment, not a deregulated one.  If you remember just a decade back, our world economy nearly went into depression because of the deregulation of banking and mortgages.  Having a deregulated currency is going to lead to MUCH bigger issues in my opinion. 

      I wouldn’t argue that there is lots good coming out of the “technology” behind many of these crypto-investment-fake-currencies, but they are certainly not in a state where they are a viable currency.  They behave much more like a ponzi.  

  15. Gomer Magtibay

    I can’t believe I read through the end of such a long article! Wow. But you’re right, and actually, some parts of your article were already in my mind before. Like for example, crytocurrencies’ value is based only on investors’ trust and if that thing disappeared, the whole thing loses value.

    Since people are hard-headed like you said in your introduction, do you have any idea or expert advice that involves the best psychology technique how can we convert someone hypnotized of this back to his sanity?

    • Kyle

      The excitement with many of these alt coins is based purely on the idea of them continuing to go up.   In theory, that sounds awesome.  In reality, it will never be the case with any investment in particular one that is based completely on new money, to pay the old money (remind you of something?).

      I don’t think this is so much people being hard headed, it is more that people want to see their team (crypto) win and go up so they can make money.  They will do anything to make this happen, convince others, get mad at others that have adverse feelings about their investment, and even scam others.  That is the unfortunate part,  the cryptocurrency world has brought out the worst in a lot of people. 

      Are Cryptocurrencies a Ponzi Scheme

  16. dreamgirl93

    Now I understand what bitcoin was despite that I had heard a lot about it, I didn’t know what it really was cryptocurrencies was before reading your article! I didn’t know what I will definitely be more careful towards that stuff, now that I know what I know. Still I wouldn’t invest in this kind of stuff as it sounds very boring to me

    • Kyle

      Well it can be exciting if you like to watch your money float around 20-30% (up or down) every day and still not have an idea of what you bought or what you are investing in.   It is called a currency, but you can’t spend it and you can’t trade it for anything other than other currencies.  

      A strange world we live in, but the cryptosphere isn’t going  anywhere any time soon.  There is still legs to this and I hope as it matures, the mentality behind what it was actually created for matures.  

  17. Rab

    I completely agree with you here, Kyle! Many people are so hyped about about bitcoin and cryptocurrenies and believe it or not, in the US, you can invest in cryptocurrencies for your retirement account. I have people telling me that bitcoin is the new gold but I asked them this ‘But is it backed by anything?’ It has no intrinsic value whatsoever and not a tangible asset, either.

    • Kyle

      The new gold, but made out of air.  That is the problem.  People think because it is being “mined” through algorithms,  that is has the same value as gold. Far from the truth and the fact that 100’s of new types of gold  are being created should create suspicion from even the biggest advocates.

      The problem, people get into the crypto world and they don’t want to believe or hear any ideas that go against what they are doing.  It is very similar to some of the biggest scams and ponzi schemes that ever existed, many of which are being rooted out of cryptocurrencies (and the FTC and SEC are currently all over these).


    The main problem, in my opinion, are not the cryprocurrencies themselves but the desperate hope and mentality of people to get rich quickly. If cryptos were of true value, they would have never reached the public but companies and institutions would have kept it for themselves and trade it with others within their companies. The quick devaluation and high risk involvement with cryptos makes them to lure as many people as possible into their programs. They know it will crush eventually but they don’t care. I always tell myself “If it’s too good to be true it probably isn’t.

    • Kyle

      I agree with you. I think this craze has shown how actually how crazy people are, how the general masses would rather get rich quick by taking advantage of something they hardly understand (and surely can’t have a proper conversation about when there is any argument), and that are truly setting themselves up for huge losses.

      There is a stat that stated that 30% of Millennials would rather invest in cryptocurrencies than they would stocks. That to me is a tell tale sign of a generation that may be in for a rude awakening, and one that is going to be vulnerable to getting ripped off.

      If it is too good to be true, it definitely is. That is the case of the very idea that cryptocurrencies are going to go up forever.

  19. Hi, Kyle and thanks for another great review. I am in WA company and earn a bit with my two affiliate sites mainly thanks for WA learnings. All you mentioned in your crypto post is right but..

    But until now cryptocurrency topic is great for making fiat money. How? Just in a couple of words. I have invested in Antminer S9 miner device and mining about $35 a day minus $4 for electricity consumption. Raw calculations result in around $930 a month. Cashout with deducting fees gives me about $870.

    Well, it depends on BTC price but, as you see, it still rising. And one more real thing, our local Latvian (many others as well) airline company AirBaltic selling tickets for bitcoins as well and I suppose to purchase my next holiday flight to Barcelona using my BTC wallet.

    And one more thing. I have a post on my gpsnavigationsite how to buy antminer s9 with links to Amazon. Traffic is doubled, and the most surprising is I have one $5.5K antminer s9 purchased just in a couple of days indexed post. Why not fiat money?

    • Kyle

      You are turning this opportunity and the traction of the whole cryptospace into an opportunity. I can totally appreciate that. But as you said, people in crypto are ultimately going to be after fiat money and turning their gains into Fiat at some point (as there is very little they can purchase with it at this very moment).

      Lots of money in it, including mining (and more so now that China is coming down on miners because of their high energy use).

  20. AlecMoore

    Thanks for the information on bitcoin, I’ve seen lots of people promoting bitcoin, I’ve even considered it not really knowing what it was because of what people siad. You mention an alt coin can be illegal, is that like bitcoin or is bitcoin? I’m definitely gonna steer clear of that stuff knowing what I know now.

    • Kyle

      Alt coin (alternate coins outside of bitcoin) are not illegal.   What the FTC and SEC are cracking down on are companies that are guaranteeing a high rate of return  (similar to HYIP) and also companies that are operating strait up pyramid schemes layered on top of the currencies themselves.

      The currencies are by no means illegal (at this point anyways).  

      The fact that you are considering something just because others are hyping it up, is not a reason to invest into it.  I would recommend you spend some time educating yourself on it, read both sides of the story (both positive and negative) and then jump to a conclusion whether or not investing in cryptocurrencies is right for you. 

  21. Dr. Misty Baker

    I was not familiar with cryptocurrencies prior to reading your article.

    Can you please tell me a little more about what exactly cryptocurrencies are? Is this similar to purchasing foreign money in the hopes that it will increase in value?

    I have definitely heard of the latter, but I have never heard of anyone profiting from this!

    Thanks for opening my eyes to a completely foreign market to me that I never knew existed!

    • Kyle

      You are buying a digital currency.   It is less like purchasing a foreign currency (as they are stable and backed by countries and their respective banks/assets), it is more like going to the casino and putting down $100 on black and hoping that it turns into $200.  That is fast money and 100% returns in a few minutes, but it could also lead to you losing all of your money.

      It is a high risk investment at this point, with little to no value, and it is accepted as an actual currency in very few places.  People that are claiming it to be a currency, are in fact, trading it in for fiat (real) currency in order to spend their capital gains.  This is very ironic and self-revealing.  

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