John Oliver Explains Why Investing in Cryptocurrencies Is Just Like Gambling Early Bitcoin buyers have become millionaires, but investing in Bitcoin and its ilk today could put you at risk of being sucked into a pyramid scheme, Oliver warns.

By Lydia Belanger

Opinions expressed by Entrepreneur contributors are their own.

Youtube

There are more than 1,500 cryptocurrencies in virtual circulation today, and Bitcoin, the most prominent and highly valued of them, has made millionaires out of individuals who invested in it early.

The problem, Last Week Tonight host John Oliver explains in an episode that aired Sunday, is that people trying to get in on crypto fervor today don't realize what they're getting themselves into, or the risks involved.

To put it simply, Oliver says that for the average person, Bitcoin is "everything you don't understand about money combined with everything you don't understand about computers."

Bitcoin is based on blockchain technology, which Oliver explains briefly, eventually devolving into zany analogies involving Chicken McNuggets and Beanie Babies to convey why decentralization makes blockchain networks difficult to hack -- and why investing in Bitcoin is more speculative than buying traditional currencies.

Related: 15 Crazy and Surprising Ways People Are Using Blockchain

It's also a risky investment, Oliver says, because it's prone to manipulation like with pyramid schemes, a business model Oliver has warned against in a segment last season devoted to multi-level marketing.

But that hasn't stopped startups from jumping on the bandwagon, inflating their stock prices with mere mentions of the term blockchain and selling their own tokens in exchange for services. People are passionate about cryptocurrencies and blockchain technology, explaining that they will change the world.

But some aren't so sure. One of the skeptics is comedian Keegan Michael Key, who appears at the end of the clip to deliver a fervent warning that parallels the enthusiasm of Bitcoin evangelists.

Watch the full segment below.

Lydia Belanger is a former associate editor at Entrepreneur. Follow her on Twitter: @LydiaBelanger.

Editor's Pick

Related Topics

Business Ideas

This Teacher Sells Digital Downloads for $10. Her Side Hustle Now Makes Six Figures a Month: 'It Seems Too Good to Be True, But It's Not.'

When one middle school teacher needed to make some extra income, she started a remote side hustle with no physical products and incredibly low overhead. Now she brings in six figures each month, and offers courses teaching others how to do the same.

Growing a Business

Why the Satellite Tech Market is Poised to Dominate Many Sectors

The satellite technology market presents several challenges and opportunities, but it isn't just for rocket scientists – it's also fertile ground for entrepreneurs looking to innovate.

Money & Finance

5 Financial Moves to Make While Interest Rates Are High

Here's what you should do and what you should avoid while interest rates are high.

Business News

Elon Musk Gives Profanity-Laden Tirade During DealBook Interview: "Go F--- Yourself'

Musk addressed the companies that have pulled advertising from the X platform at the 2023 DealBook Summit in New York on Wednesday. Watch the interview, here.

Business News

Liquid Death Canned Water Changes Name of 'Armless Palmer' Beverage: 'Now It Has a Way Cooler Name'

The company claims a "large enterprise" threatened to sue them over the lemonade-iced tea beverage.

Living

'I Haven't Ticked All the Boxes Yet.' Hilary Duff Reveals Her Next Venture After More Than 2 Decades in the Spotlight — and the Surprisingly Relatable Key to Her Enduring Success

The actor talks entrepreneurship, secrets to success and her latest role as chief brand director for Below 60°, a product line of air fragrances.