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Cryptocurrencies lost $20 billion of value overnight

Basically, don’t use them to pay for stuff, but they’re as good as horses to bet on.

Basically, don’t use them to pay for stuff, but they’re as good as horses to bet on.

What it means: Cryptocurrencies, online-only money that isn’t controlled by any government or central bank, are now worth $20 billion less than they were a couple of days ago.

Lots of people are treating this as NBD, because the values of cryptocurrencies like Bitcoin have rocketed all over the place since they were invented. What goes down (may) come up.

But it's not very useful for a thing that people are supposed to be able to use to pay for stuff. Currencies have to be reasonably consistent in their value to work as a means of exchange, otherwise a pint of milk could cost you £1 one day and £50 the next.

So nobody is really using cryptocurrency as currency, not least because loads of businesses refuse to accept it. But lots of people are using it as a speculative investment - basically, they’re placing bets on whether the value of various cryptocurrencies will go up or down. As a money-making method, it could make you a millionaire. But so could the Grand National.

Cryptocurrency-as-currency might not be completely down and out, however. Venezuela has just made a cryptocurrency legal tender. That would be better news for crypto-fans if Venezuela wasn't widely considered to be pretty terrible at understanding how money works. But hey, it's a start.

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