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.
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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.
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.