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Author Topic: Bitcoin - a financial pyramid: true or myth?  (Read 109 times)
harastvo
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May 31, 2018, 01:48:53 PM
 #1

If we talk about crypto-currencies in general, it will be more correct to immediately split bitcoin and all other crypto-currencies, the so-called altcoyins.

So, it can not be denied that many ICOs today are forms of financial pyramids.

However, this does not mean that absolutely all alternative crypto-currencies are a fraud. Some altcoyins have a very clear and transparent pricing model. And in fact today, in my opinion, such crypto-currencies as Ether, Dash, Ripple, Litecoin, NEM, Monero and others really create value, and their price is due not only to pure speculation.

As for bitcoin, the fantastic increase in its value in recent times, of course, does not cease to excite the minds of critics, but in reality it's quite simple with him.

The first and most obvious difference between bitcoin and the financial pyramid is that there is no central beneficiary. Theoretically, of course, there are very old wallets with a very large number of bitcoins, which in some sense can be considered such a beneficiary. However, there was no official central beneficiary, and without its presence the pyramid does not make sense.

The second important difference is in bitcoin with the growth of the user base and with the growth of downloaded money, the value grows, because in any economic system this value is directly related to the number of participants in this system. Moreover, given the fact that the volume of the economy is always proportional to the square of the number of participants, and not to the number itself, the value of bitcoin grows much faster than the user base grows, and it is not necessary to talk about inflating a bubble.

And, at last, one more factor is that at bitcoin there are no obligations to anyone. That is, bitcoin never promised anything to anyone, so bitcoin as a pyramid, in general, can not collapse. Bitcoin is only a financial protocol for making, validating and storing information about transactions among network members. The bitcoin code is publicly available, each participant can explore the logic of the entire network, and some participants can not just grab the bitcoins of other participants.

Given all of the above, I can conclude that bitcoin does not fall under the definition of the financial pyramid.

What do u think about what do you think about my thoughts? Do u agree that bitcoin is not a financial pyramid?
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June 03, 2018, 08:07:04 PM
 #2

I don't get why people think that bitcoin is a ponzi scheme/pyramid scheme.

There is simply no central entity, and that is the exact thing that bitcoin is based on. There isn't anyone that is collecting investments. When you use bitcoin, there isn't any single person that benefits from it. That's the plain truth.

Also, it's important to note that bitcoin doesn't even promise any returns. Its price fluctuates due to market supply and demand. How this can be classified as a ponzi scheme is really just beyond me.

I'd say that most people would agree nowadays that bitcoin is a legitimate currency, though it was disputed in the past.

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June 03, 2018, 09:36:56 PM
 #3

I believe that a lot of people get misinformed about this. They look at pyramid marketing schemes that utilises bitcoin's technology and network and automatically assume that it is somehow affiliated with bitcoin itself - it's complete and utter nonsense.

This myth has been debunked thousands of times. I suggest you read up on this article: https://decentralize.today/bitcoin-is-the-total-opposite-of-a-ponzi-scheme-heres-why-4d795f0ed

Bitcoin is completely decentralised, it does not promise a rate of return, it is not operated by some shady admin.

I don't know how you can call it a ponzi scheme, or a financial pyramid. And I think most here would agree with me.

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June 03, 2018, 10:11:43 PM
 #4

yes bitcoin does generate high profits and has fantastic value. like other crypto currencies and have a clear price. less suitable when called a financial pyramid because there is no promise of multiplier benefits.
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June 03, 2018, 10:13:49 PM
 #5

I don't know how you can call it a ponzi scheme, or a financial pyramid. And I think most here would agree with me.

Certain people for some reason think that anything that isn't issued by the government is a scam by default, and for that reason they keep repeating the same nonsense over and over again. They are what I consider to be government shills and will agree with everything the government comes up with, even if it negatively affects them. I see that around me all the time -- regardless of what tax increases and cost cutting plans the government presents, the average joes swallow everything without complaining. They even act like it's completely normal that the government is doing that. No wonder why the government managed to grow out to the monster that it is today, the loser joes accept everything.
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June 03, 2018, 10:55:36 PM
 #6

Absolutely not. I'm not a big fan of cryptocurrencies, yet. It's growing pretty fast. More and more establishments are starting to accept Bitcoin as a form of payment.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns.
So, Bitcoin is legal. The problem is, cryptocurrencies are still in it's early stages and will take some time for it to develop until it's widely accepted by the masses as an alternative form of payment.
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June 03, 2018, 11:09:05 PM
 #7

Absolutely not. I'm not a big fan of cryptocurrencies, yet. It's growing pretty fast. More and more establishments are starting to accept Bitcoin as a form of payment.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns.
So, Bitcoin is legal. The problem is, cryptocurrencies are still in it's early stages and will take some time for it to develop until it's widely accepted by the masses as an alternative form of payment.
Pyramid in terms of fist come first serve basis, those who have bought not at lower price will eventually gain more if they intend to hold it. It's a pyramid with fairness unlike those pyramid schemes that will disappear easily.

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June 03, 2018, 11:28:00 PM
 #8

Bitcoin is
1) a payment method
2) trading instrument with superhigh liquidity
3) newsmaker all over the world, partly regulated by law
4) billions of dollars investments in hardware, that are manufactured ONLY for bitcoin blockchain

Nothing from this is a sign of ponzi, so the conclusion is - no, the bitcoin is not a usual financial pyramid. Economic bubble - maybe, but not a ponzi.
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June 03, 2018, 11:56:24 PM
 #9

Every pyramid entails a highly centralized system where a collapse happens whenever someone on the top pull his funds out. Whereas bitcoin is very decentralized both in terms of funds distribution and mining powers which means that noone can influence so dramatically to crash it completely.

Hydrogen
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June 03, 2018, 11:58:15 PM
 #10

"Pyramid" is not the best terminology to utilize in describing altcoins or forks.

A better term to describe it may be "derivative".

Quote
In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying".[1][2][3] Derivatives can be used for a number of purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard-to-trade assets or markets.[4] Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps.[1] Most derivatives are traded over-the-counter (off-exchange) or on an exchange such as the New York Stock Exchange, while most insurance contracts have developed into a separate industry. In the United States, after the financial crisis of 2007–2009, there has been increased pressure to move derivatives to trade on exchanges. Derivatives are one of the three main categories of financial instruments, the other two being stocks (i.e., equities or shares) and debt (i.e., bonds and mortgages).[1] The oldest example of a derivative in history is thought to be a contract transaction of olives, entered into by ancient Greek philosopher Thales, and attested to by Aristotle, who made a profit in the exchange.[5] Bucket shops, outlawed a century ago, are a more recent historical example.

https://en.wikipedia.org/wiki/Derivative_(finance)

I would say the claim of bitcoin being a pyramid is a myth. True pyramids are things like MLM (multi level marketing) schemes or ponzi schemes which are unsustainable over the long term due to a steady influx of new wealth injection being necessary to maintain. Bitcoin is the opposite in that it is designed to appreciate in value over the long term within a HODL format. Btc is much more like gold/silver--precious metals than it is a pyramid.

It is true that altcoins and forks are "derivatives" of bitcoin but that in itself doesn't invoke a pyramid paradigm. Derivatives are common and known investment vehicles in the world of finance--which are considered to be legitimate.

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June 04, 2018, 01:57:16 AM
 #11

Bitcoin becomes very popular all over the world.Lots got interested and joined while lots are against bitcoin.Due to fear that bitcoin might affect the countries economy and also step down those big businesses that was owned by influencial people they take some actions like making a black propaganda.Like saying that bitcoin is a ponzi scheme or a pyramid scam to lower down its popularity and stop it for their own motive.So for me its normal already that they will throw dirty stuffs just to reach their goal.The best thing to do is to do some research to know the reality.
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June 04, 2018, 02:11:35 AM
 #12

Bitcoin, which is decentralized, has no center of confidence, so there's no pyramid or ponzi scheme.

Bitcoins is a newborn thing, he is the price has been soaring high, because people expected of him in the future, in the future, he could be as a common currency, we can now see that the future of bitcoins has gradually clear, more and more companies are willing to accept him, will he used as money.

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June 04, 2018, 02:28:12 PM
 #13

I think some people who dont understand Bitcoin relate to it as a pyramid
scheme because they see it as something that is created from nothing, I
have been told to my face that it was a pyramid scheme and of course a
5 minute crash course in how Bitcoins are created and what it was designed
to do would change their minds but if some people are hell bent on believing
something it can be impossible to change.

The massive run up to $20,000 in January did nothing to change those
peoples minds, they would have seen that as the people at the top
selling to those unfortunates at the bottom.


audaciousbeing
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June 04, 2018, 03:22:03 PM
 #14

When people hold this kind of view or make comments towards the type of direction, the only question I ask is that, of all the pyramid scheme that have happened before, which one have specifically cover the whole world at the same time and lasted this number of years that bitcoin has been in existence. I stand to be corrected, but I have not seen any, neither have I read about any the worst that would happen is the scam to cover a particular country at a time or a region and have never survived this long.

Another question to settle the whole matter is to shift the discussion away from bitcoin to the blockchain and then come back to point to the fact that it would be sheer hypocrisy to commend and be wowed with what blockchain can do, to disregard bitcoin as a pyramid scheme. It is therefore safe to conclude that view that bitcoin is a pyramid scheme is nothing but a myth.

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June 04, 2018, 03:26:49 PM
 #15

For me, pyramid or Ponzi scheme is connected with ''old MLM'' business models.
BTC vale depends on supply and demand and we don't need any referrals.
We can talk now if bitcoin will survive in the long term or something else will replace bitcoin in the future but right now we have crypto market and when you have users interested to buy bitcoin you will always have some value of btc.
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June 04, 2018, 03:47:12 PM
 #16

If we talk about crypto-currencies in general, it will be more correct to immediately split bitcoin and all other crypto-currencies, the so-called altcoyins.

So, it can not be denied that many ICOs today are forms of financial pyramids.

However, this does not mean that absolutely all alternative crypto-currencies are a fraud. Some altcoyins have a very clear and transparent pricing model. And in fact today, in my opinion, such crypto-currencies as Ether, Dash, Ripple, Litecoin, NEM, Monero and others really create value, and their price is due not only to pure speculation.

As for bitcoin, the fantastic increase in its value in recent times, of course, does not cease to excite the minds of critics, but in reality it's quite simple with him.

The first and most obvious difference between bitcoin and the financial pyramid is that there is no central beneficiary. Theoretically, of course, there are very old wallets with a very large number of bitcoins, which in some sense can be considered such a beneficiary. However, there was no official central beneficiary, and without its presence the pyramid does not make sense.

The second important difference is in bitcoin with the growth of the user base and with the growth of downloaded money, the value grows, because in any economic system this value is directly related to the number of participants in this system. Moreover, given the fact that the volume of the economy is always proportional to the square of the number of participants, and not to the number itself, the value of bitcoin grows much faster than the user base grows, and it is not necessary to talk about inflating a bubble.

And, at last, one more factor is that at bitcoin there are no obligations to anyone. That is, bitcoin never promised anything to anyone, so bitcoin as a pyramid, in general, can not collapse. Bitcoin is only a financial protocol for making, validating and storing information about transactions among network members. The bitcoin code is publicly available, each participant can explore the logic of the entire network, and some participants can not just grab the bitcoins of other participants.

Given all of the above, I can conclude that bitcoin does not fall under the definition of the financial pyramid.

What do u think about what do you think about my thoughts? Do u agree that bitcoin is not a financial pyramid?
People don't make difference between Bitcoin as a cryptocurrency and third party websites that claims such as "Double yourBitcoins in 3 hours".These latter are ponzi/hyip schemes that scam people,while when you buy Bitcoin for yourself there is not third party website that benefit from your Bitcoin other than you.I hope ou understand now the difference.Ponzi is not something new,it's just easier now since Bitcoin transactions are irreversible.

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June 04, 2018, 03:59:09 PM
 #17

Bitcoin is not a pyramiding scheme. It can give us profit if we invest in it over time depending on its performance in the market. The reason why people find bitcoin as a pyramiding scheme since lots of companies used bitcoin as such. FIAT money can also be used in those kinds of things that you're talking about. Bitcoin is made to correct the blunders of FIAT and centralization and it is a currency not some ponzi or pyramiding scheme that you think about.

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June 04, 2018, 04:20:21 PM
 #18

Its a myth, bitcoin is not a pyramid neither is it a ponzi scheme, owing to the fact it has been around for years and still very much around. Most pyramid programs have gone into extinction but bitcoin is still striving, so bitcoin cant be a financial pyramid, in fact bitcoin has proven to be the only cryptocurrency that has help to aid effortless ,secure and profitable transaction.
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June 04, 2018, 04:49:58 PM
 #19

I agree that bitcoin is not a financial pyramid. The logic behind financial pyramid generally is a faulty progression to quick wealth with wish wash algorithms that hardly ever stand the test of time. Times ticks for all pyramid scheme for which bitcoin is still standing and counting to date. Again, Bitcoin's activities had demonstrated an interplay that allows for the rise and fall in its value with clear audit trails for traders. It requires investor's active decision as to what, how, where and when to secure profit or loss.
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June 04, 2018, 05:05:41 PM
 #20

i think the main cause of this problem is educations to know more about cryptocurrencies because some people who does not know what is bitcoin will consider bitcoin as pyramid scheme or HYIP because they already became the victim of cryptocurrencies investment site even they will says bitcoin was made to scam every people but for those who does know what is bitcoin they will understand for what bitcoin was made so knowledge is necessary to avoid misunderstanding meanings

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