Why do most people automatically think Bitcoin is a scam/ponzi scheme?

[ardana123]

When I tell people about Bitcoin, like I did with my parents, they just would not believe a word that came out of my mouth. They automatically think it's a scam and that I will "lose" all my money even though i only have the bitcoins which I have mined in the past. They don't even bother looking it up.

[coretechs]

Because Bitcoin violates the law of "too good to be true".   

[BradZimdack]

I think it's a form of Stockholm Syndrome and fiat is their captor.

[hayek]

It blows their mind that the peons could provide a better system than their benevolent overlords.

[superduh]

Value goes up..  Must be a scam

[kokjo]

every time you tell a person that "not" money is money they gonna distrust you by default, whatever you tell them that its carrots, bitcoins or other stuff.

[gmaxwell]

When I tell people about Bitcoin, like I did with my parents, they just would not believe a word that came out of my mouth. They automatically think it's a scam and that I will "lose" all my money even though i only have the bitcoins which I have mined in the past. They don't even bother looking it up.

It may because you explained it using language that was suggestive of it being a scam. "If it sounds too good to be true!"

I've never had the problem you're describing.

I describe Bitcoin as a novel way for people to consensually interact without trusted third parties, instead of describing it as way to make money.  I am blunt about the risks, but also spend time contrasting them to the risks of alternative (dollars that inflate, banks that are really insolvent, gold notes that are backed by nothing, etc). I share funny stories about over exuberant bitcoiners and the crazy Bitcoin market.

The promise of Bitcoin is enough that people still find it compelling and fascinating even when knowing the real risks associated with it. It's hard, however, to tell someone that they're being scammed when they're being so frank about the risks.

[FeedbackLoop]

When I tell people about Bitcoin, like I did with my parents, they just would not believe a word that came out of my mouth. They automatically think it's a scam and that I will "lose" all my money even though i only have the bitcoins which I have mined in the past. They don't even bother looking it up.

It may because you explained it using language that was suggestive of it being a scam. "If it sounds too good to be true!"

I've never had the problem you're describing.

I describe Bitcoin as a novel way for people to consensually interact without trusted third parties, instead of describing it as way to make money.  I am blunt about the risks, but also spend time contrasting them to the risks of alternative (dollars that inflate, banks that are really insolvent, gold notes that are backed by nothing, etc). I share funny stories about over exuberant bitcoiners and the crazy Bitcoin market.

The promise of Bitcoin is enough that people still find it compelling and fascinating even when knowing the real risks associated with it. It's hard, however, to tell someone that they're being scammed when they're being so frank about the risks.

+1

Some of the people who tell me they think it's a "scam" are people who heard about it before in the context of mining, especially in the context of easy early mining which might be the light under which OP's parents see it. One of the smartest guys I know told me: "Oh Bitcoins? Yeah I know that. It's all a scam because now you can't even mine it with GPU's anymore, you need specialized hardware for it."  

[franky1]

when people talk about bitcoin as this item that is created by a computer that literally creates money.. ofcourse its hard to beleive.

what needs to be done is for everyone spreading the wrd in this manner to realise one thing..

bitcoin has now expanded beyond average joe mining coins, so please stop mentioning it from the perspective of mining to create wealth.

instead if you mention it as a replacement of a master/visa card. that it can be used internationally with less fee's, no application forms, and you can send funds without any of the payment processing 'red tape' you will get less objections.

the other point to make is that you should be aiming your energy more at merchant adoption. after all without things to spend it on, it holds less value. so increasing its usefulness, increases its value.

just telling family and friends to throw money at a new project wont help the community, wont help expansion and eventualy wont help those you insisted on throwing money into it

[eleuthria]

I find very few people think of Bitcoin as a scam/ponzi when I talk to them about it.  But there is a HUGE difference between the way I talk to people about it and the way other people normally get introduced to it.  I do not use high tech terms.  I do not make broad generalizations.  And I do NOT talk about how they are created (mining) until after they show understanding of the underlying concept itself.

I have sat next to relatives and previous employers who are what I would call "computer illiterate", which is definitely the category that would be very hostile towards a high tech virtual currency.  Everytime I speak with them, I'm paying very close attention to their questions and their faces.  As soon as I see them getting lost, I double back and phrase it using analogies that people are more comfortable with.  It's not a market pitch, it's not a lecture, it's something inbetween.

The real key is to keep things abstract & concept oriented, so they have an idea of what it is and why it can be useful, before bringing in the concept of exchanges, market rates, and especially mining.  Mining is by far the most "scammy feeling" part of Bitcoin for the uninformed person, since it is literally printing money by running a program, and introducing Bitcoin and discussing mining before the groundwork is placed is going to have anybody feeling very uncomfortable about Bitcoin at the start of the introduction.

[Gabi]

Chances are you are describing it in the wrong way

The same reason why i don't like people giving bitcoins for free to friends, you don't give money for free, if you do something is suspect

[marcotheminer]

Because Bitcoin violates the law of "too good to be true".   

Exactly, many people just dont believe it partial because we dont explain it properly and we make it sound like a game!

[gmaxwell]

Mining is by far the most "scammy feeling" part of Bitcoin for the uninformed person, since it is literally printing money by running a program, and introducing Bitcoin and discussing mining before the groundwork is placed is going to have anybody feeling very uncomfortable about Bitcoin at the start of the introduction.

Absolutely, it's also the hardest to understand.  If you explain mining without explaining the rest of it, it gets misunderstood.

First you explain the whole idea of a scarce money like good created by a p2p system and how that can be socially useful.  Depending on the audience you explain the problem of achieving a distributed consensus.  Mining just solves the distributed consensus ("Security" for the less technical audience) while also solving the practical problem of getting the coins into circulation to begin with.

Once people understand the usefulness of Bitcoin and see that mining exists to solve important and necessary problems the result from the creation of the system, then it no longer sounds like some kind of scam.

[will1982]

Because Bitcoin violates the law of "too good to be true".   

Yup.
5 cents fee, instant global transactions?

[clipcoins]

Because average IQ is about 100 and half of the people are below that.

Only dumb people say that.

[nnimmo]

i think there are bellow reason:
1. they don't know and don't study theory of bitcoin.
2. bitcoin is new to the world.
3. the price rised too quick
.......

[BorderBits]

Probably because many Bitcoiners tend to talk like people who sell MonaVie and Herbalife.  The community is largely a cargo-cult with delusions about what BTC is and what it is capable of. Considering all the shenanigans here -- from Bruce, to Pirate et al., to Spnogebob McA+++, to BFL, and every hack and "hack", and Chinese relics dealer in between -- there's definitely a very high scam to legitimate business ratio going on. 

[johnyj]

The same reason that they think fiat money is legit: rely on powerful entities, no knowledge about money

Banking must be the most delicate scam ever, it is built on many illusions and psychologies, less than 27% people understand what is QE. For majority of people, it takes a very long time before they realize this scam, maybe never

[Akka]

Like most people already mentioned when I talk to someone about Bitcoin I don't even mention mining or the increased Value (most people come back a few days later to ask me about that though).

I mainly describe it a financial tool that offers the user 100% control of their money without having the to trust banks or government.

A System where you can nearly instantly transfer value world wide without needing to pay any 3rd parties in the process.
A System that knows no borders, no frozen accounts or special rights for a wealthy elite.

A system that is to 100% in the hands of their users, where everyone can see the rules by what that system works and that this rules can only be changed if the users agree.

When it comes to mining. I only talk about that users can contribute calculation power to the network that is used to verify transactions. I also don't call it mining but verifying transactions.

If we come to this I mention  that it is no payment provider, but a independent currency and therefore it's value of course fluctuates to the € or $. But don't mention the massive increase in value. People that are interested by that time will find out about it on their own and if not they would only get in for the (IMO) wrong reasons anyway.

I have yet to here it's a scam.

[Alph0nse]

Because they don't have a fundamental understanding of what money is.