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In his regular column, veteran journalist A. Craig Copetas asks if Bitcoin, Ethereum and Dogecoin are the modern-day equivalents of sneezing powder and whoopee cushions.

Samuel Soren Adams reckoned it was time to stop hustling in a New Jersey pool hall. So he put down his billiard cue and in 1905 took a job selling coal-tar soap.

Dad noticed distilled coal tar possessed a tremendously high sneeze potential, his son Bud recounted thirty years before the iPhone Sneeze App arrived on the scene. So for fun, dad squirted the powder through hotel-room keyholes and inside cafes.

The elder Adams bottled and marketed his carcinogenic concoction under the name, Cachoo. Within three months of its introduction, a Philadelphia retailer had bought 70,000 bottles. That triumph was followed by the Snake Jam Jar, which, when opened, let loose a metre-long imitation serpent. Then came the Dribble Glass, and then, of course, the Whoopee Cushion. Exploding matches made another big boom.

Bud Adams said his familys leap from gags to riches proved the public will buy anything, regardless of how dodgy, ridiculous or hazardous the gimmick. And all these years later, it remains hard to dismiss the marketing wisdom of a practical joke mogul whose records indicated he annually sold 10,000 Super Joy Handshake Buzzers in Kuwait and kept the locals coming back for more.

The Adams familys gizmos spearheaded the way for all sorts of the silly stuff currently available through a smartphone, such as Ajit Khubanis Massaging Slippers ($27.99); Witty Yetis Dehydrated Water ($13.30), and Arnie McPhees Yodeling Pickle ($12.99). A tin of slightly radioactive uranium ore on Amazon costs $39.95 and a fee of $5-a-month lets anyone play Wall Street tycoon on the Robinhood Gold stock trading app.

The trick, Bud Adams precisely instructed, is to come up with a product that captures what the public is wishing for and can bring that dream to life, however briefly.

As everyone wants to be a millionaire, how about a $32,000 Satoshi Nakamoto Bitcoin. Vitalik Buterins Ethereum are priced to move into your digital wallet at $3,073 an Ether. Too steep for your pocket? Dogecoin is a deal at 17 cents a Doge, particularly as software engineers Billy Markus and Jackson Palmer say they created the gimcrack which today has a market capitalisation of more than $32.65bn in 2013 as a joke to make fun of cryptocurrencies.

Although the Wizard of Oz advises to pay no attention to the man behind the curtain, Nassim Nicholas Taleb nonetheless says the cryptocurrency pranksters are hawking a gimmick and a Ponzi scheme. Taleb should know. The economists bestselling 2007 book, The Black Swan, spelled out highly improbable events and their potential to trigger severe cascade effects.

Indeed, the feted multibillionaire investor Warren Buffet described Bitcoin as probably rat poison squared, pooh-poohing cryptocurrency as a non-productive asset. All youre counting on is whether the next person is going to pay you more because theyre even more excited about another next person coming along, was the Oracle of Omahas verdict.

The Nobel prize-winning economist Paul Krugman argues that cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear about them being used as a means of payment, as opposed to speculative trading, is in association with illegal activity.

Adds digital godfather and Microsoft Corp founder Bill Gates, Bitcoin uses more electricity per transaction than any other method known to mankind.

It is likely no surprise that all the Baby Boomer grumpiness over cryptocurrency echoes the establishments initial reaction to Adams sneeze concentrate. Cachoo has divided the country like nothing since the Civil War, read an account in a New Jersey newspaper. Town fathers pass ordinances, school principals preach sermons, editorial writers inveigh against Cachoo. But a laugh-hungry population demands more. The eagle screams as this fair land reverberates neath the thunder of nasal broadsides.

Yet whatever your wager on cryptocurrency, I would heavily bet Adams product catalogue would have branded the stuff Digital Dough and displayed the product alongside Suckers Soap, Squirting Flowers and Mystic Smoke From Fingertips, a goo that went poof when rubbed between thumb and forefinger.

Bud Adams described his business as hand jive. He passed away a millionaire in 2001.

The views expressed in this article are the authors own and do not necessarily reflect Al Jazeeras editorial stance.

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That time cryptocurrency proved people will buy anything - Al Jazeera English

Physician-investors have been huddling around the water cooler recently because everyones favorite high-risk investment vehicle is back in the news. According to Reuters, China has banned all crypto transactions and mining, including bitcoin and other prominent cryptocurrencies. It looks as though the government regulations this virtual form of currency has been avoiding are finally catching up to it.

Cryptocurrency, according to NerdWallet, is a digital currency, which like physical currency, can be used to buy goods and services from participating vendors. The technology that makes cryptocurrency possible is called blockchain, and it is the true star of the show. Blockchain provides the mechanisms by which the cryptocurrency is secured and unable to be duplicated. Blockchain is a decentralized technology and is spread across many computers that manage and record transactions all through a tight wall of security. Blockchain is the technology; cryptocurrency is a way to use this technology.

According to Rob Michel, Chief Investment Officer at Glen Eagle Advisors, LLC, There are some interesting similarities between what we went through with the Dot-Com Bubble and what we are experiencing with cryptocurrency. For those physician-investors too young to remember, Investopedia does a nice job of reviewing the infamous Dot-Com Bubble.Basically, in the late 1990s the internet was gaining traction as a source of information, entertainment, and commerce. Since it was such a new technology (like blockchain is today), investors werent sure how to successfully monetize the internet, so they began to throw their money at anything associated with the internet. Investors abandoned the rules of investment valuation just to get a foothold in this technology (Sound familiar?).

Its the technology that is the real source of value; blockchain is a very interesting technology and will certainly have an impact on how business is done. Cryptocurrency, like bitcoin, is just one application of blockchain technology. It would be wise to remember the lessons of the Dot-Com Bubble when venturing into cryptocurrency investing. Yes, some individuals have made huge sums of money, but many others have lost money. Take the time to understand the risk of what you are investing in and talk to an experienced financial advisor, cautions Michel.

Watching cryptocurrency as it continues to evolve will be very interesting. Just always remember to temper the excitement of this new investment product with a realistic knowledge of the risks involved.

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CryptocurrencyPossible Similarities to the Dot-Com Bubble - Physician's Weekly

Whenever there's a high risk, there's almost always a chance for a high reward. In a time when regulators around the world are cracking down on the burgeoning cryptocurrency space, there's one company that's not only undeterred by setbacks but is thriving. Of course, I'm talking about Silvergate Capital(NYSE:SI), whose stock has returned 603.8% in the past year.

Heck, the cryptocurrency bank even bestedBitcoin's 477.4% return during the same period. So why is Silvergate so popular all of a sudden? Let's find out.

Image source: Getty Images.

Silvergate is a waypoint into the mysterious cryptocurrency realm. The company has four major areas of operations:

The company currently provides such services to 93 cryptocurrency exchanges and 771 institutional investors such as hedge funds. Notable clients include Binance.us,Coinbase, Fidelity Digital Assets,PayPal, andCME Group. It also has 360 customers engaged in activities such as crypto mining or building decentralized finance services.

During the second quarter of 2021, Silvergate facilitated a whopping $239.6 billion worth of transfers on its network, recognizing $11.3 million in revenue. Both represent significant increases over the $22.4 billion in SEN transactions and $2.4 million in revenue it brought in Q2 2020. Like any other bank, the company lends out money while only using a portion of its deposit as collateral in a process called fractional reserve banking. Total leverage increased more than tenfold in the past year to $258.5 million worth of loans in Q2.

Under the current international banking regulations (Basel III), a bank's capital must be at least 8% of its risk-weighted total assets (loans, mortgages, etc.). This is called the risk-based capital ratio (RBC). It ensures that a sudden stock sell-off or rise in default rates wouldn't wipe out a bank's capital due to the latter's leverage. The higher the ratio, the healthier the bank, but the less its profits due to less leverage.

Major U.S. banks typically have an RBC of 15% and possess a net interest margin (NIM) of between 2% to 5%. However, it's clear that Silvergate is a very conservative bank as its RBC stands at a whopping 48% while possessing a NIM of 1%. So there's definitely a lot of room for the company to leverage up and beef up its returns. What's more, its default rate stands at roughly 0%, compared to 0.05% for its competitor banks.

With the rise of the $172.15 billion decentralized finance (DeFi) industry, there are now more opportunities than ever for investors to buy and hold cryptos and earn fixed income with them. As a result, expect continued massive demand for Silvergate's fiat-crypto services. And don't forget about its ability to expand its loan portfolio and increase interest profits, either. Overall, I'd consider this a high-flying crypto stock to buy, even at 38 times earnings going forward.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Here's a Top Cryptocurrency Stock to Buy Now - The Motley Fool

While investments in complicated technology that goes way over peoples heads is a norm in the stock market, especially in the biotech and tech industries, crypto investors tend to take this hopeful-yet-ignorant investing strategy to the extreme.

With 1 in 3 crypto investors admitting to knowing little to nothing about the technology and just 16.9% reporting that they fully understand the value and potential of the technology, crypto investors seemingly invest a lot of trust with their money. Sure, your typical investor in biotechs has a limited understanding of what mRNA and gene splicing are, but they certainly understand the need for cancer treatment and remedies.

One of the most fundamental, and often misunderstood differences between various cryptos, is its classification as either a Coin or a Token. This is because, on the surface, the two are very similar. However, the utility of the two couldnt be more different.

Additionally, all Coins and Tokens are classified as cryptocurrencies, though many of them are not meant to be currencies and do not circulate as such.

Coins are the original inhabitants of the blockchain and have clear-cut qualities that separate them from Tokens and are meant to be similar to money.

So what makes a coin a coin?

First and foremost, coins are coins because they operate on their own blockchain. When an individual sends, for example, Bitcoin to another individual, that block, or transaction, gets placed on that coins blockchain. So in this case, the transaction would appear exclusively on the Bitcoin blockchain.

Furthermore, per its name, Coins are meant to act as money and have the characteristics of money, being; durability, portability, divisibility, uniformity, limited supply, and acceptability.

Lastly, Coins get mined. Not physically of course, but in order to maintain the security and transfer of Coins, mining is important. Mining is done through Proof of Work (PoW) and Proof of Stake (PoS) models. PoW models mean miners must validate and come to a consensus for a transaction to occur, however, this model is very costly in terms of energy consumption. Meanwhile, PoS favors miners with a higher or longer-standing stake in the currency and rewards miners for their commitment to the currency. Read more on the differences here.

So if Coins are digital money, then Tokens can be thought of as a digital representation of ownership of an asset. These are most commonly found in the form of NFTs and Stablecoins.

Tokens dont operate on their own blockchain but are tacked onto other blockchains, such as Ethereums. If youve ever seen XYZ is run on the Ethereum blockchain, that is a good hint that it is probably a Token.

So instead of running on the blockchains, Tokens are run by smart contracts and unlike Coins, Tokens physically change hands.

Think of it this way, if I send you money via Zelle or Venmo, the bank didnt physically move the $20 to a storage container with your name on it, from one with my name on it. Instead, the money remained in the bank and they just noted that I now have a claim to $20 less and that you now have a claim to $20 more. This is, in essence, what the blockchain does.

But what happens if you buy my car? The title, which represents ownership of the car, physically changes hands and the car is now yours. Think of tokens as a digital version of a title. It is a perfectly unique string of code that gives ownership to some kind of asset, digital or otherwise.

So whats the difference? Coins are money and Tokens represent ownership of something else, which could be anything from digital artwork like Pudgy Penguins to some amount of U.S. Dollars.

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Cryptocurrency Basics: What's the Difference Between Digital Coins and Tokens? - InvestorsObserver