Ponzi scheme and Bitcoin

[Finestream]

ponzi scheme will slowly diminish in the crypto space as it's getting regulated.
People has learned from their experience, they are more matured now and they can make good decision.

Although the market is bad for the last 1 year or so, but it has been an opportunity for us to realize our past mistakes and we will never get victims of scams anymore, though this kind of act will not be stopped but at least it will be totally minimize.

The future I see in crypto is that bitcoin will continue to go up, while ponzi will eventually die, they are quite opposite so they don't succeed together.

[1714872034]

1714872034

[1714872034]

1714872034

[deisik]

Bitcoin is a Ponzi scheme.

Its value may be determined according to the greater fool theory but it's definitely not a Ponzi scheme

Well, that actually depends on your point of view

If we assume that the defining criterion of a Ponzi scheme is paying profits to earlier investors with the funds obtained from more recent investors (as per Wikipedia, no plagiarism intended), Bitcoin fits this definition pretty well, at least as far as its speculative part is concerned (which is the best part of it anyway). You can only earn dough by buying coins at a lower price and then dumping them on someone else at a higher price

Isn't that the rule in getting profit on trading?  Buying at a lower price and selling at a higher price?  If bitcoin falls into that, pretty much all of things that is sold in the market  falls under it.  Like gold, silver etc

You miss the whole picture

It is definitely true with respect to trading, but if it were only about trading, we would have a classic Ponzi scheme with any tradable asset. However, the difference between gold, silver and other real assets, on the one hand, and some scammy tokens, on the other, is crucial and definitive. Real assets are called real for a reason

And the reason is that these assets have plenty of utility beyond just trading. Then buying low and selling high stops being the only useful option available to you. With Ponzies, the only way their tokens can be of any use to you is when you sell them higher than what you bought them for. That's their only utility and distinguishing feature

[Silberman]

pyramid schemes will not stop bitcoin's rise, but the reputation for new investors will be tarnished. Some days, people are more vigilant than in previous years. But with all the savings, altcoin ponzi schemes have started to come to light where teams are just fleeing. New project legislation can be effective in stopping these issues.

That will probably be the most lasting effect from those ponzi schemes, while they are not going to damage the price of bitcoin that much regardless of their size the real problem is that people are going to begin to associate the scam not with the people that got their money but with bitcoin and this will slow adoption as those people will most likely prefer to avoid bitcoin from now on and if anyone that is close to them inquires them about bitcoin they will only have bad things to say about it.

[JollyGood]

Would the collapse of a Ponzi scheme effect the price of Bitcoin?
Though a hypothesis that the collapse of the Chinese Plustoken, a classic Ponzi scheme similar to bitconnect or countless others affected the price of Bitcoin, this seem to be accceptible although it's unlikely to be the major factor but distribution of stolen funds correlate very well with market downturns.

If there were sizeable ponzi schemes that collapsed then even so it should not really affect the price of Bitcoin because there are far too many variables to consider before any price fluctuation would occur.

[exstasie]

Isn't that the rule in getting profit on trading?  Buying at a lower price and selling at a higher price?  If bitcoin falls into that, pretty much all of things that is sold in the market  falls under it.  Like gold, silver etc

You miss the whole picture

It is definitely true with respect to trading, but if it were only about trading, we would have a classic Ponzi scheme with any tradable asset. However, the difference between gold, silver and other real assets, on the one hand, and some scammy tokens, on the other, is crucial and definitive. Real assets are called real for a reason

And the reason is that these assets have plenty of utility beyond just trading. Then buying low and selling high stops being the only useful option available to you. With Ponzies, the only way their tokens can be of any use to you is when you sell them higher than what you bought them for. That's their only utility and distinguishing feature

You are just equating "Ponzi scheme" with "speculation." That's ridiculous. The most basic feature of a Ponzi scheme is it promises investment returns under fraudulent pretenses. The point of investing in a Ponzi scheme is to yield ROI, not to buy low and sell high.

Reaching some arbitrary measure of real world usage doesn't define a Ponzi scheme either. It's a form of fraud. Even if your definition applied, Bitcoin is frequently used as a medium of exchange and even a unit of account. It's a "real asset" through and through even if you don't think very highly of it.

The phenomenon you are indirectly referring to is known as the greater fool theory. It's a market phenomenon and investment strategy, not a fraudulent investment scheme like a Ponzi:

The greater fool theory states that it is possible to make money by buying securities, whether or not they are overvalued, by selling them for a profit at a later date. This is because there will always be someone (i.e. a bigger or greater fool) who is willing to pay a higher price.

[deisik]

Isn't that the rule in getting profit on trading?  Buying at a lower price and selling at a higher price?  If bitcoin falls into that, pretty much all of things that is sold in the market  falls under it.  Like gold, silver etc

You miss the whole picture

It is definitely true with respect to trading, but if it were only about trading, we would have a classic Ponzi scheme with any tradable asset. However, the difference between gold, silver and other real assets, on the one hand, and some scammy tokens, on the other, is crucial and definitive. Real assets are called real for a reason

And the reason is that these assets have plenty of utility beyond just trading. Then buying low and selling high stops being the only useful option available to you. With Ponzies, the only way their tokens can be of any use to you is when you sell them higher than what you bought them for. That's their only utility and distinguishing feature

You are just equating "Ponzi scheme" with "speculation." That's ridiculous. Reaching some arbitrary measure of real world usage isn't what defines a Ponzi scheme, which is a form of fraud. And even if your definition applied, Bitcoin is frequently used as a medium of exchange and even a unit of account. It's a "real asset" through and through even if you don't think very highly of it

I'm curious as to why you refuse to look beyond speculation

Since this is what ultimately determines whether speculation is synonymous with a Ponzi scheme (as its modus operandi). So it is definitely not like I'm just equating "Ponzi scheme" with "speculation", or some exotic variety thereof. Put differently, if it is only about speculation and nothing else, then you can be certain that you are dealing with a fraud. Okay, you disagree, I understand, but would you disagree that most altcoins (aka shitcoins, for the record) as well as the best part of ICO's are a form of fraud functioning in a Ponzi-like manner and environment, where profits can only come from later investors?

[asus09]

When ponzi and hype project use bitcoin label in their website and product many people can be manipulated and make investor have scam much money, we know detail how ponzi and hype working although use bitcoin or coin label in their website name, example with Bitconnect where giving 1% every day profit landing and your coin keep the same value after pass their contract more than 100 days, but what did you get now BBC have been scam.

[jhonjhon]

pyramid schemes will not stop bitcoin's rise, but the reputation for new investors will be tarnished. Some days, people are more vigilant than in previous years. But with all the savings, altcoin ponzi schemes have started to come to light where teams are just fleeing. New project legislation can be effective in stopping these issues.

Always have thousand way for scammer to make ponzi or hype project with using bitcoin as their label name, every one have know how to increase profit whit bitcoin but when some hype project use bitcoin as their background way many people have manipulated and trusted whit hype site, they don't know give fake news about bitcoin and try to give support with their member about they are legit project investment.

Well that's the sad reality, whether we like it or not scammer can't be totally eliminated and no matter what we do they can do something around it. As investors it is very important that you fully know everything about the project because scammers will stop at nothing and they will make sure their projects look like a legit project and it may be very difficult to detect it, it pays to know the makers and whose behind those projects.

[asus09]

pyramid schemes will not stop bitcoin's rise, but the reputation for new investors will be tarnished. Some days, people are more vigilant than in previous years. But with all the savings, altcoin ponzi schemes have started to come to light where teams are just fleeing. New project legislation can be effective in stopping these issues.

Always have thousand way for scammer to make ponzi or hype project with using bitcoin as their label name, every one have know how to increase profit whit bitcoin but when some hype project use bitcoin as their background way many people have manipulated and trusted whit hype site, they don't know give fake news about bitcoin and try to give support with their member about they are legit project investment.

Well that's the sad reality, whether we like it or not scammer can't be totally eliminated and no matter what we do they can do something around it. As investors it is very important that you fully know everything about the project because scammers will stop at nothing and they will make sure their projects look like a legit project and it may be very difficult to detect it, it pays to know the makers and whose behind those projects.

Invest only with altcoin have listed with bigger exchange market and have higher volume transaction without try for investing with ICO, IEO and try for investing with project look like bitcoin, when you invest with new project investment you have ready to know what bigger risk because when investing with ICO and IEO you don't know will be good investing or not.

[SquallLeonhart]

Bitcoin itself is not a method to make more money, that is what many many people use it for but reality is that the creation purpose was to create a new currency that was better than the current fiat system we have and to that point bitcoin managed to actually build something that is better.

What we put on top of that and buying lows and selling highs and all those Bakkt things and leverage bitmex things etc are all because people used bitcoin for that, which goes to show you that we are the reason why all systems are broken, communism didn't worked, capitalism failed, socialism got destroyed, whatever system you throw at humanity they found a way to use it for personal gain and not improvement of our society. Bitcoin intended to be different but ended up in the same place.

[Ucy]

Would the collapse of a Ponzi scheme effect the price of Bitcoin?
Though a hypothesis that the collapse of the Chinese Plustoken, a classic Ponzi scheme similar to bitconnect or countless others affected the price of Bitcoin, this seem to be accceptible although it's unlikely to be the major factor but distribution of stolen funds correlate very well with market downturns.

Depends on the general market demand for Bitcoin.. and it also depends on whether they dump the whole thing (supply). Seems like they'd find it a little hard to dump since most centralized exchanges place kyc limits on withdrawal of large funds. Normal hackers will likely avoid them.

[aioc]

Would the collapse of a Ponzi scheme effect the price of Bitcoin?
Though a hypothesis that the collapse of the Chinese Plustoken, a classic Ponzi scheme similar to bitconnect or countless others affected the price of Bitcoin, this seem to be accceptible although it's unlikely to be the major factor but distribution of stolen funds correlate very well with market downturns.

Ponzi has nothing to do with Bitcoin, we should never associate Bitcoin to Ponzi scheme, these Ponzi operators are just using Bitcoin to their activity, so even if these Ponzin schemes like Plus Token go down, it will have no impact on Bitcoin because it is a technology and Ponzi is scam scheme

[marcous]

Well,  one of the negative stigmas in the crypto world is the development of cryptocurrency projects which instead of earning Bitcoin and make profitable even though they use a Ponzi scheme and this is what makes some ordinary people judge BItcoin is a negative thing that is not good if you invest in it. Of course, we hope that Bitcoin has a good image in the eyes of the world

[trickshot22]

Ponzi will always be there, looking for people who don't want to search for information or expertise. We are going to get stuck in the Ponzi scheme without knowing whether or not that is true. We're going to see a new type of Ponzi as the Ponzi scheme will always adapt following the trend, and the Ponzi scheme will seek to get as many people as possible to get their money. You must therefore be vigilant and always find the other source for the news.

[JollyGood]

Ponzi scheme can’t be stop, there will be more like this but on a different system. Bitcoin should not be affected by this one, bitcoin should continue to grow despite on those scammers, and investors should focus on the best system which is bitcoin, ponzi scheme will never succeed if people are well educated, this is the main problem.

I agree with you.

Sadly some ponzi schemes will collapse after the scammers behind them make lots of money and some will be collapse beforehand but all in all it is clear Bitcoin price is related to far too many variables to pinpoint.

[Faxmate]

Well,  one of the negative stigmas in the crypto world is the development of cryptocurrency projects which instead of earning Bitcoin and make profitable even though they use a Ponzi scheme and this is what makes some ordinary people judge BItcoin is a negative thing that is not good if you invest in it. Of course, we hope that Bitcoin has a good image in the eyes of the world

you are absolutely right that we want a better image of bitcoin in the eyes of world, but most of the people adopt the wrong ways in this field inorder to get a quick and easy money due to which the victim people are considering bitcoin a bad thing. Ponzi scheme is one of the wrong ways that make people fool and get the money of people illegally.
but i think we should teach those people who are considering bitcoin bad that you can use bitcoin in a positive way.

[ashmodeus]

~

theoretically yes, a scammer cash it out. of course it's just a little penny compared to the bitcoin market cap .
but the trust to crypto currency will got more affected from that cases. of course we talking about negative effect .
general people will more familiar with btc is ponzi nests than btc in the right defenition.

[Silberman]

Bitcoin itself is not a method to make more money, that is what many many people use it for but reality is that the creation purpose was to create a new currency that was better than the current fiat system we have and to that point bitcoin managed to actually build something that is better.

What we put on top of that and buying lows and selling highs and all those Bakkt things and leverage bitmex things etc are all because people used bitcoin for that, which goes to show you that we are the reason why all systems are broken, communism didn't worked, capitalism failed, socialism got destroyed, whatever system you throw at humanity they found a way to use it for personal gain and not improvement of our society. Bitcoin intended to be different but ended up in the same place.

But did you really expected any different? That is just human nature, humans are always looking for a way to gain an advantage over everyone else, and they can do this under the rules established by their society or by breaking them, those using ponzi schemes to get money are operating outside of what we consider acceptable and if they are ever found most likely they will be jailed, but when people use bitcoin to speculate with it they are actually using bitcoin as intended, after all with bitcoin you can use your money as you want and if they want to speculate with it then they are using it in the right way.

[Kyraishi]

Depending on the scale, a ponzi scheme as large as a plustoken may cause speculators to panic for each of their large transfers of funds and eventually sell large chunks a while later. Because of activities that are always tracked, scam companies like this have never been seen selling any small part. Even though most of the money is sold in ethereum and causes a small increase in bitcoin. Yet speculators know it only lasts a while before it eventually becomes sharper.

It's an interesting thing to think about.

If the ponzi operators theoretically dump their coins as soon as they pull an exit scam, and the scam is of some magnitude, then yes, the effects on the bitcoin market COULD be detrimental in the short term.

But at the end of the day, it won't have any weight in the long run because these ponzis simply use bitcoin as a payment method and doesn't represent bitcoin in any way. The fundamentals of BTC's network and technology is what drives long term prices, not third parties.

[deisik]

But at the end of the day, it won't have any weight in the long run because these ponzis simply use bitcoin as a payment method and doesn't represent bitcoin in any way. The fundamentals of BTC's network and technology is what drives long term prices, not third parties

I tend to think it does in fact affect the fundamentals

And not because it adds to volatility (though it is about that too) but for the image that such use produces. Indeed, it doesn't change the technology behind Bitcoin, but technology without adoption is pretty useless on its own. When people lose their money via Bitcoin as was the case with PlusToken, their overall attitude toward cryptocurrencies changes and not for the best, to say the least

And yes, I know that the dollar (for example) is used for nefarious purposes as well and probably much more in general. But this use is still minuscule compared to its other uses, good ones, so it doesn't affect its image so much