Cryptocurrencies are nothing more than confidence games

Cryptocurrencies like bitcoin are crap.

I’ve been saying this for a long time, although I have explained it more delicately in the past.

Bitcoin and the other cryptocurrencies are nothing more than confidence games. They only have value if someone dumber than you thinks they are worth something and is willing to take them off your hands.

I’m bringing this up now because smarter people than me are figuring this out.

Warren Buffett, who has a reputation for being pretty savvy, said on Monday that “cryptocurrencies basically have no value. You can’t do anything with it except sell it to someone else.”

Somebody dumber than you, I’ll add.

And Neel Kashkari, president of the Minneapolis Federal Reserve Bank, correctly described cryptocurrencies recently as being “like a giant garbage dumpster.”

He pointed out that people have been swindled out of tens of billions of dollars by playing in the cryptomarkets.

(Actually a giant dumpster is a lot better than a cryptocurrency. At least you can climb on top of a dumpster to get a better view of people throwing away their money buying a cryptocurrency.)

In another development, the Fed seems to be coming up with digital dough of its own called Fedcoin.

What’s the difference between the digital currencies in the giant garbage dumpster and whatever the Fed might end up doing? The Fed will have the US backing its Fedcoin.

Big difference.