Transcript for Cryptocurrencies like Bitcoin are the latest rage, but skeptics warn about bubble
No matter it's. A line outside the island's long who. What. It's a weeknight in San Francisco but you. You know what the music dumping the drinks flowing. Jeremy Gardiner is holding court which Jeremy isn't it TV stars or music mogul or any. He's been dubbed a crypt no celebrity. Silicon Valley his kingdom and big cooling a source of his riches what are you a millionaire from. This may tenth. Big point big corn bitcoin bicker their currency is too big according it's been digital currency you've probably heard something about at this point those stories about early investors striking it rich hit Angel. Those guys from the social networks the waigel Abbas twins this idea is potentially millions of dollars billion. They've eleven million dollars is to bitcoin back in 2013. Now. They're millionaire. Rapper fifty cent who wants declared bankruptcy got his money. After accepting bitcoin as payment for his 2014 held out. Current value today over six million dollars. But what exactly is a media frenzy and are news good morning news we have enough trouble with yeah. This. The ruling is the world's most. Popular crypto currency it's a digital currency than you could use like cash but unlike other currencies it isn't backed by any government and you don't keep that in a bank board here reading your pocket when it exists only online you can use it to get a hotel room on Expedia. I furniture on overstock Surin theory pays someone directly for a cup of coffee big corn has experienced an astronomical. Rise in value when it first started you could pick up a single bitcoin. For less than a penny. Last year that same bitcoin would have cost you almost 20000 dollars at one point but it's been extremely volatile in terms of its price. Leading some to question. Is it all just Heidi I think it's in serving get rich quick scheme a vast majority of its hype. And the moon moon among the high angels' lead to wild price swings has not deterred the rim and don't die cartons packing San Francisco. We're on our way to the crypto capital rain out and yet with Jeremy he's basically. The king of crypto sometime by 800 dollars worth the big point and a hundred dollars it's quite at this moment means I get really. Zero pain and then some. And so this is it we're at sacred snow Cassell. And it quite converge here. I'm. The answer fact that we're here when night lion. And I hardly ever back. So this is that this is a crypto Cassel didn't fit as a dorm room meets think tank. It just saying leaded by Jeremy. Jeremy calls himself a venture capitalist and crypto currency evangelist so how many bedrooms are in this house. This is three bedroom but we will we've made some extra space and so we just consulate people coming in and out that'd kind of transit could don't know mad script don't know mad stay in this space for the people come and live with you what they pay. Some 16100 dollars okay a little more background bitcoin was created in 2009 by someone names to toe she not Comodo. But here's the thing. No actually knows who that is whether it's a man or a woman or even a group of people who is a toe she Nakamura. Me all have hired gases. Have you met Sid tocchet not Comodo possible. Every time you use your big knowing that transaction is recorded in public digital led jurors and I called the block change. The block chain offers is really a revolutionary approach to security that has been all but un hackable checkbook ledger from time to time and see it's even become a part of college curricula this this class here at New York University we started with about thirty students in 2014. And now 235. This term let's make all the blocks two megabytes of there's no question crypto currency has crossed over into the mainstream a far cry from its dark past. Bitcoin once the preferred currency to buy drugs and other illicit items on the black market site silk road. The FBI eventually shutting down silk road seizing over 173000. Big coins which would be worth over one and a half billion dollars today. I as we're here with Nightline ABC back get the crypto castle we have few crypt don't know man it's what got you into it stretch figured a way to send money back to China. And western union was charging twelve point 5% fees for transactions under like a thousand dollars or something and I was making fifteen dollars an hour at the time. So a 12% transaction fee on a thousand dollars is an hour worth of work for me. After taxes and now it's like that sucks and what right to this house I ran out of USD and they needed to increase the lives. So I knew that Jeremy would let me pay written crypt don't look at. One major issue with actually using bitcoin is that its value fluctuates so wildly. No one's going to be owned by a cup of coffee for five dollars when that five dollars to be worth fifty dollars tomorrow and consider when we were at the crypto castle. One bitcoin would have cost you thirteen 1583. Dollars first thing that morning. But by the end of the day that saved bitcoin. 101351. Dollars meaning gene loans rent could swing almost 25%. In just a few hours you want. Stay and white people are skeptical of that going off course how can you not be aids just looks like this speculative asset that is and backed by anything. But then the more you learn about the history of money the more you realize that it. Perfect lead soundly in the US dollar say it's backfire faith in the government's. Act in our economic best interest. Well it's backfire faith. In the government that it's a sound government and that there is an economy. And a structure behind it. Makes total sense to you live in the United States sort of the EU or even China probably. They've here in Venezuela the value of your dollar that there drops. Exponentially each and every day. They claim makes a whole lot of sat. Even some of the biggest believers caution against betting it all on bitcoin. Grants are not tee it may more than a million dollars in bitcoin recently wrote a piece advising against investing in it. You only have a thousand dollars 5000 dollars this is not the best place to put your money interviewed as a speculative investment why would you for your entire investment in something that isn't backed by anything we're all you need to have a more conservative. Better investment strategy for the long term. Do you think there's a little chance that were in a bubble right now. Well it's possible to both be in a bubble and undervalued at the same time it just depends on your time horizon. Her Jeremy high up in his castle he's confident there's a crypto future just beyond the horizon. Into an eighteen we're gonna see real world deployments of blocks chain technology across enterprises and real estate and health care and government. And I think about point this technology will become much more real people as for our buy in. One month ago we about a hundred dollars worth of bitcoin and now that hundred dollars is worth. 73 for Nightline I'm Rebecca Jarvis in the Tikrit do castle in San Francisco.
This transcript has been automatically generated and may not be 100% accurate.