John Oliver's Cryptocurrency Rant Is Not Only Hilarious, But Actually Explains Cryptocurrency In A Way That Makes Sense
You can't escape hearing about cryptocurrencies these days, particularly if you happen to sit next to a couple of tech bros at a Manhattan bar during happy hour. I find I instinctively start drifting the instant someone name drops Bitcoin or blockchain in conversation. But considering how popular (and, in Bitcoin's case, profitable) the digital currency is becoming, it's certainly worth sussing out the basics, and on Last Week Tonight on Sunday, John Oliver went on a cryptocurrency rant that actually explained it, sort of. And he used Beanie Babies!
Indeed, Oliver dedicated last night's entire show to the digital currency, digging out props, rap videos, and even Keegan Michael-Key to help explain the nuts and bolts of how cryptocurrency defines its worth, how it's shared and distributed, what the various acronyms and jargon mean, and why it's still a risky business. Basically, cryptocurrency — which Oliver accurately describes as "everything you don’t understand about money combined with everything you don’t understand about computers" — is only worth something because people agree it's worth something, kind of like how once upon a time people decided certain Beanie Babies (with pristine TY tags, natch) were worth thousands of dollars, even though you could get them for $6 at the grocery store.
To illustrate, Oliver pulled up an eBay ad for the Peace Bear Beanie Baby, now available for the low price of $15,000. Peace Bear isn't actually worth $15,000 as Oliver points out (or at least I hope he isn't, as he is sitting in my parents' apartment accruing no value), but if someone purchases him for that much, they've confirmed the value the owner assigned him. "The fundamental reason that Bitcoin has value is because people agree it has value. In fact, at the moment, it's really being treated more like a speculative investment than as a currency," Oliver said. Of course, all currency is technically speculative, but since dollars, Euros, and the like have all been widely determined to have a certain value, they're accepted as barter. Bitcoin, etc. isn't quite there yet as Oliver points out below:
Oliver also describes the concept of a "blockchain," which I have seen in hundreds of Twitter handles but never quite understood. Basically, it's a digital ledger that records every transaction made with a particular cryptocurrency (i.e., Bitcoin). Though, as Oliver points out, banks like J.P. Morgan Chase, Bank of America, and Wells Fargo maintain their own ledgers, but since they're centralized on specific servers, it's easy for them to get hacked. Blockchain, on the other hand, is "nearly impossible to hack," per Oliver, and whether or not cryptocurrency takes off, blockchain itself could revolutionize how banks and large corporations track currency and improve security altogether.
Of course, while Bitcoin is the cryptocurrency with the most name recognition, as Oliver points out, there are so many forms of cryptocurrency now it's ridiculous. There is literally a form of cryptocurrency dubbed "Dogecoin," after the adorable Shiba Inu meme, and while I certainly love the namesake, I don't understand why you'd want to barter with it. "People buy coins for no other reason than that other people are buying them," Oliver says.
And while cryptocurrencies are becoming increasingly popular, Oliver notes that it's not a great idea to invest too much in something so speculative. In fact, it's basically like blowing your holiday bonus on a weekend in Vegas. "The point is, if you choose to invest in the cryptocurrency space, just know that you're not investing, you're gambling," Oliver said.
The aforementioned Key illustrated the risks in a rap, as one does:
Anyway, I think I'll stick with regular dollars for now.