When do Masternode coins become Ponzi/Pyramid schemes?

You probably heard this line before: "Bitcoin is a pyramid scheme!". I think it's pretty much disproven, but there is some credence to it. Indeed, the earlier you were to the party, the more you profited. In addition, pyramid/ponzi schemes tend to inflate your actual earnings on paper by displaying theoretical earnings. This is something that Bitcoin does a bit as well: would all holders cash out, there's no way anyone would get what they thought they'd get based on the calcualtions made before. So, to some extent, there was some "pyramid-ness" to it. But all in all, it is now much worse than with any other speculative asset. Being apyramid scheme is more of a spectrum, you can maybe point at something like Bitconnect and say "that's a pyramid scheme", but that was a very obvious one. In other cases, it's not that simple.

Masternode coins are all the hype right now, or at leas were a few months back. And while their base premises look somewhat ineresting, they also bode some questions. For one, I never really understood the technical use of a masternode in a pure money centric blockchain. Why pay a full node, especially in a PoS system? Their provided extra security doesn't look like much. Not to mention the fact that most masternodes are run via VPS and therefore are hosted on a handful of servers. Decentralization much?

I can't shake the feeling that masternodes are mostly a tool to get users to keep their coins bound in some way. It is a way to pay interest. Or at least, that's wat it looks like, because it is not really "interest", it is more "getting a piece of the inflation pie". Because interest would mean, holders would get real, tangible value, but what they're getting is a handful of freshly printed banknotes in a system, which isn't necessarily growing in value as a whole. Granted, this is the fact for almost all cryptocurrencies, but in other currencies, the ability to print money is not as blatantly abused as it happens with so many "high-ROI" masternode coins.

So, to sum up here, masternodes keep holders holding, make them sit on a stash of unrealized profit. This keeps a lot of coins from entering the market, meaning, liquidity is atrificially low, inflating the price per coin even further. Should a decent number of MN holders throw in the towel and sell their MN bonds, the market would absolutely collapse.

And the worst of them all are projects, where the early adopters get an even bigger piece of the pie. This is a classic among pyramid schemes. In fact, for those who were in and out early, pyramid schemes generally worked out quite favorably. It's the later people, those who come towards the end, before the system collapses, which are hit the hardest. And this is something that makes pyramid schemes so dangerous; they look alright, until very suddenly, they just stop working and everybody involved is caught with their pants down.

I am not saying that all masternode coins are pyramid schemes. In fact, I think some of them are quite legitimate. I like Zcoin, I think their team has proven time and time again that they are legitimate.

Other projects look very problematic, especially those which focus on high ROI, of rising MN collateral needed for latecomers, stuff like that. I won't name names, but some of them throw around patents, as if that would mean anything in an opensource community. They are clearly not meant to impress the knowledgable, but the gullible, the newcomers who have no understanding of the space and the general principles behind it.

Stay safe out there. If something looks too good to be true, it usually is.