bad news about bitcoin

What is bitcoin and is it a bad investment?

Bitcoin is the first, and the biggest, “cryptocurrency” – a decentralised tradeable digital asset. Whether it is a bad investment is the big question. Bitcoin can only be used as a medium of exchange and in practice has been far more important for the dark economy than it has for most legitimate uses. The lack of any central authority makes bitcoin remarkably resilient to censorship, corruption – or regulation. That means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person.
Munger has been a persistent critic of cryptocurrencies, which have soared in value in recent months. Last year he said the soaring values of the currencies was “total insanity”.

He told an audience at the University of Michigan’s Ross School of Business: “I think it is perfectly asinine to even pause to think about them. It’s bad people, crazy bubble, bad idea, luring people into the concept of easy wealth without much insight or work.”

Buffett’s comments came as the 87-year-old announced he had appointed two potential successors: Gregory Abel, the chief executive of Berkshire Hathaway Energy, and Ajit Jain, Berkshire’s reinsurance chief.

The critique from two of the world’s most successful investors comes as more companies are piling into cryptocurrencies. On Tuesday Kodak announced that it would launch its own cryptocurrency, KodakCoin, in a move that doubled the struggling company’s share price.

Kodak, which emerged from bankruptcy in 2012 and has struggled to regain its footing ever since, said the move would allow photographers payment for licensing their work using KodakCoi
The cryptocurrency halo has been good for other companies too. Last month, shares in a tiny US soft drinks company quadrupled after it changed its name from Long Island Iced Tea Corp to Long Blockchain Corporation – referencing the ledger technology upon which bitcoin and other cryptocurrency transactions are based.

The company said it planned to raise $8.4m in a stock offering and use some of the cash to invest in bitcoin mining machines. This week it announced it is scrapping the stock sale but still plans to buy the machines. However, it did not specify how it would pay for them.