I Don't Know About This Shitcoin Stuff

Written by Nick Hodge
Posted January 31, 2018 at 10:58AM

I’m no crypto neophyte.

I was telling my readers to buy Bitcoin as early as 2013.

No matter what they say, these Johnny-come-lately newsletter guys with crypto promos weren’t telling you to buy it five years ago.

So that’s my ethos.

But this whole thing has kind of gotten out of hand, hasn’t it?

I mean, it was cool when there was Bitcoin and Ethereum. And yes, the technology behind them is real and will have limitless applications as you’ve now heard from limitless people.

But where’s the value when there are over 1,300 different cryptocurrencies out there and growing?

Let’s say Bitcoin is gold and Ethereum is silver. All these other crypto-clones are like trying to monetize the dirt around them.

But they’re worthless! In mining terms, they’re waste ore.

These things are just being created out of nothing in days… and some of them are vanishing back to nothing just as quickly.

It’s like the best sci-fi comedy you’ve ever read. Not only is it funny, but it teaches a lesson as well.

Take the story of tether (no capital T because it's so hip), a so-called stablecoin. (I’m not making this up. This is actual crypto-talk.) It is supposedly stable because it's tied to the U.S. dollar. Let’s let Wired magazine explain:

Unlike bitcoin and its many siblings, tether is what is called a stablecoin, an entity designed to not fluctuate in value. With most cryptocurrencies prone to wild swings, tether offers people who dabble in the market the option of buying a currency that its backers say is pegged to the US dollar. 

Oh they say, do they?

But in recent weeks a chorus of skeptics has called into question nearly everything about tether. The root of the controversy is whether the company behind it, also called Tether, is telling the truth when it claims that every unit in circulation is matched by a US dollar it holds in reserve.

Well, I’ll be. Didn’t see that one coming.

And here’s the punchline, delivered like it’s some sort of effing revelation:Ding Ding Bell

If tethers are not backed by a matching number of dollars, then Tether can print an arbitrary amount of money.

Ding ding ding ding!

Are you getting the comedy here? And more importantly, the lesson?

You know what you can’t arbitrarily create more of on a digital platform? Gold.

Tether subpoened

Call it like you see it,

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Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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