Why bitcoin never a ponzi

[Oshosondy]

I was recently learning about bitcoin, I saw online that bitcoin was a ponzi, I later realized what the authors of the article was trying to say in summary, that ponzi is a business many investors lose while the people that set it up gained as many as possible money. I was later confused that is bitcoin actually a ponzi? I started to think of what I could not see online why bitcoin is never a ponzi and few reasons came to my mind.

Before I can tell about the reasons, we have to consider what ponzi is. What is ponzi?
I like a simple fact that says "ponzi is a scheme in which Peter money is used to pay Paul. I believe that example is a good definition on its own, in ponzi scheme, the people that started it gain the most, people that first invested are the second that gained in such a way that the people that invested late are the ones that lose.  Check the diagram below:


https://www.google.com/search?q=Ponzi+scheme+diagram&tbm=isch&source=iu&ictx=1&fir=dxjUbGDCkvRQQM%252CsHiiS1Y747SmvM%252C_&vet=1&usg=AI4_-kT6_73-JQY5mKanO5LLbcIA1iPu9A&sa=X&ved=2ahUKEwjK_b-cxeDqAhWDxTgGHf2MC7YQ9QEwA3oECAkQIg&biw=1261&bih=2039#imgrc=dxjUbGDCkvRQQM

As seen in the diagram, it is a pyramidal scheme but ponzi scheme work this way too, let us consider the people that started it as 6 shown on the top of the pyramid, the 216 participants as the people that invested early, the 279936 as the people that invested but not too late, the rest up to billions of people invested late before no people are investing. If the billions of people invested, their investment is used to pay those at the top but how will they gain because nobody investing again.

People that stated ponzi gain from all investors and have the lion share.

People that invested early do not gain from investors but from people that invested late

People that invested late just lose because nobody is investing again.

The scheme failed.

That is why many ponzi scheme has failed in the past, some people still run ponzi and fail because they are liars, they sell fake products and services, lying to their investors until investors to be payed outnumber those that are investing and until the whole scheme failed. I believe we all know what ponzi is now. So let us dive into why bitcoin is never a ponzi in summary.

Why bitcoin never a ponzi
1. Bitcoin is decentralized, all ponzi scheme are centralized

2. Bitcoin is not selling any fake product or service, it is completely transparent.

3. Bitcoin is over 10 years now but has never failed, the future even seem brighter than now, ponzi can not last up to 10 years.

4. Bitcoin was even portrayed on wikipedia to be for scammers, but this changed, and was portrayed good now.

5. Many goverments against bitcoin before but now they accept bitcoin, there are even over 7000 bitcoin ATMs in the world now, and bitcoin is used for trnasactions like fiats, even used as payment on some online stores worldwide now.

6. The early investors gained, they were the developers but not in a way the late investors will lose, also many early investors sold bitcoin and makes it more realistic unlike ponzi that has nothing to sell. If you get the market right, there is always still profit in bitcoin.

7. Bitcoin is a very good and easy payment method acceptable in many countries now, has any ponzi been like this? No

8.

I think that we need to add another 8 items to this list, which is also important. A distinctive feature of the Ponzi scheme is that it sets a guaranteed profit for a certain period of time. There is no guaranteed profit in bitcoin: here everyone can get a profit if the price of BTC increases, but they can also get a loss if the price of bitcoin decreases.

There are many other reasons to talk about because these are only few, bitcoin is not a ponzi like bitcoin haters are depicting it, it is completely decentralized and transparent, people that want to invest now should not be discouraged, if they learn how the market fluctuates, they will gain but they should also be mindful of the risk. Bitcoin haters should stop misleading people about what bitcoin is because they know nothing about bitcoin. 

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[Darker45]

Why even bother responding to such a foolish accusation? Chill out, mate! By making an argument against it you are only dignifying whatever hollow Ponzi allegations some people are throwing against Bitcoin. The burden of proof is on them. The joke's on them. It's an insult arguing against an obvious fallacy.

[Tipstar]

Bitcoin itself is a decentralized open source coin and the price for it is decided by the market. Ponzi are pyramid scheme where the older investors profit only when new investors can be brought. People may argue that bitcoin is a ponzi due to it's speculative nature and has no value on it's own. But unlike ponzi, bitcoin is here for quite a time and has seen both rise and fall in price. It's value is not determined by any rules but due to it's demand and supply. The value of bitcoin lies as a trust-less P2P coin which is trusted by all parties due to it's integrity.

[hatshepsut93]

Arguing that Bitcoin isn't a ponzi is like arguing that Earth is round - any sane person knows it, and those who think otherwise are trolls or idiots. You shouldn't waste your time arguing with either.
Just like with Earth, there were times when people weren't sure, but those times are long gone. Everyone understands that if Bitcoin was a Ponzi, it would have disappeared long ago, or at least it was spoken about more often.

[Taskford]

The discussion will never ending debate and it's not good to defend any single words about it from any close minded persons around maybe you should let them discover the real use and beauty of bitcoin so that you will have a peace of mind for your self. Just ignore those kind of people since for sure future they will eat there words and will join bitcoins for profitability purposes for their selves.

[fiulpro]

Not only that generally the pyramid schemes does not work well because of * internet* , people generally settle down and send their reviews about the scheme , product , then it ends up educating others about the same it ultimately forces the governmental body to take strict action.

Plus Bitcoin was a new thing which scared the few people at first which might have made someone add that page in wikipedia , that was totally reasonable. Even right now there are people who considers cryptocurrencies to be a hoax.

People that invested early do not gain from investors but from people that invested late

If someone is familiar with two and a half Men , the show did have an episode where Alan takes money from a lot of people and pay them using money he collected later on and due to huge trust and at the same time returns , no one ever actually takes out the money , it stays with the guy.

Season 8 episode 15,16
{If you still don't understand what a Ponzi scheme is}
_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-

I do think to address this question one have to tell people how *Bitcoins is not created out of thin air*

*Why the price is volatile?*

*How did people became millionaires because of Bitcoins*

There are a lot of them , but I do think for the starting part we can tell our own experience , how it helps us day to day and how it's not controlled by the government.

Plus many companies , people even government did follow suit and made cryptocurrencies !! Which means its not baseless but the technology is so advanced that it has been accepted worldwide.

I believe your own opinion is the strongest argument that you can ever put in defending the Bitcoins about not being a Ponzi scheme, therefore share , educate others ~

[sunsilk]

No need to argue with those people that keeps on telling that bitcoin is a ponzi. There's probably a reason why they are butthurt and keeps on telling that bitcoin is like that. And the reason that we can think of is that they've missed buying the dip.

They can also think that if bitcoin is a ponzi then satoshi is the first one that's only going to make money yet he's not. But where he is? he even left an enormous wealth in the network and no one even know where he is.

[cryptomaniac_xxx]

You can call bitcoin a Ponzi it is collapses, but so far we haven't seen fall down, on the contrary, in went as high as $20k during it's peak so how can it be called a ponzi. As other have pointed out, it's hard to argue to someone who already closes their door to bitcoin. It's not your loss actually, its their so no need to debate and push your bitcoin agenda to them. Even the creator himself didn't make a single money out of it, as compare to other ponzi schemes in history. So their argument is really flaw in the beginning.

[odolvlobo]

...
Before I can tell about the reasons, we have to consider what ponzi is. What is ponzi?
I like a simple fact that says "ponzi is a scheme in which Peter money is used to pay Paul. I believe that example is a good definition on its own, in ponzi scheme, the people that started it gain the most, people that first invested are the second that gained in such a way that the people that invested late are the ones that lose.
 ...

Unfortunately, your definition is wrong. You are describing a "pyramid scheme".

A ponzi scheme is investment fraud. The operator pretends to invest the victim's money, but actually just keeps it. Generally, the operator maintains the fraud by using the victim's own money to pay out "profits".

Bitcoin cannot be a ponzi scheme because:

1. There is no operator.
2. Bitcoin is 100% transparent.

[mk4]

It is not just that. Bitcoin is counting on new money entering, just as Ponzi's do.

You mean with like pretty much all assets? So with that logic, gold is also a Ponzi scheme because it wouldn't rise in price without new money entering. Or maybe.. just maybe. It's just the law of supply and demand!?!??!11

[Beparanf]

Unfortunately, your definition is wrong. You are describing a "pyramid scheme".

A ponzi scheme is investment fraud. The operator pretends to invest the victim's money, but actually just keeps it. Generally, the operator maintains the fraud by using the victim's own money to pay out "profits".

Bitcoin cannot be a ponzi scheme because:

1. There is no operator.
2. Bitcoin is 100% transparent.

Ponzi scheme and networking we're all using cryptocurrency as their payment or reward method. They make it more appealing to people they wanted to join to make them look smart explaining bitcoin as decentralised, not prone to scam so on and so on. Those who really didn't study bitcoin or blockchain will be victimised as some were too good in bluffing and making stories, in my country, these schemes were both mixed telling investing their money in an investment and they will get reward when they get more referral as their downline. Bitcoin will never be a ponzi schemes we just hope they do their research in investing.

[Wysi]

You can call bitcoin a Ponzi it is collapses, but so far we haven't seen fall down, on the contrary, in went as high as $20k during it's peak so how can it be called a ponzi. As other have pointed out, it's hard to argue to someone who already closes their door to bitcoin. It's not your loss actually, its their so no need to debate and push your bitcoin agenda to them. Even the creator himself didn't make a single money out of it, as compare to other ponzi schemes in history. So their argument is really flaw in the beginning.

Some people will never accept the fact that Bitcoin is nowhere close to called a ponzi scheme because they missed out the opportunity to be a part of it at it's initial stage by terming it as ponzi and now out jealously they try to bad mouth about bitcoin as it's a matter of common sense that a ponzi will not last for a decade.

[mindrust]

ponzi is a scheme in which Peter money is used to pay Paul.

It is not just that. Bitcoin is counting on new money entering, just as Ponzi's do. When no new money enter Willy bot and Tether take over. Who will pay the 10 Billion USDT?

That doesn't make bitcoin a ponzi.

Tether is the ponzi scheme here. Don't get confused. The end-result might look similar but bitcoin will recover from tether and survive while tether itself may disappear anytime.

I also do not understand how a paranoiac country like the US is letting Bitfinex get away with this. The only possbility comes to my mind is, they are purposefully letting them.

[bitcoinst]

Usually, bitcoin is called a ponzi scheme by those who lost on bitcoin and do not understand what bitcoin is, how it works, and often do not know what a ponzi scheme really is and what are its signs.

It is very easy to distinguish a ponzi scheme. Any such scheme promises you something. As a rule, these are constant passive payments, or an increase in your income, or the promise of an increase in the growth in the value of an asset in your portfolio. Bitcoin does not promise anything, you cannot wait for any payments and you are not guaranteed income.

On the contrary, at every step we are warned about the risks associated with investing in bitcoin. Nevertheless, Bitcoin has already shown that it can generate income in the future. But everyone is forced to draw their own conclusions, nothing is promised, nothing is guaranteed.

[ChiBitCTy]

I personally don't pay attention to any of this nonsense.  These types of articles are put together to specifically attack bitcoin or to promote another coin.  Anyone who says bitcoin is a ponzi simply has no idea what they're speaking about.

[jpnl0006]

it was the earlier reason people often had that made them refuse to invest in o rstudy whatever is related to bitcoin. later when it became obvious that bitcoin cannot be surpressed we heard a different version of the tales people talked about adn they even started buying loads of it to hold. bitcoin has no business with business.

[Twentyonepaylots]

No need to argue with those people that keeps on telling that bitcoin is a ponzi. There's probably a reason why they are butthurt and keeps on telling that bitcoin is like that. And the reason that we can think of is that they've missed buying the dip.

Don't tell them that Satoshi is just waiting for the price to get $1,000,000 before running away, let's keep our mouth shut about this plan okay? HAHAHA I still don't know why we need to argue about this really, after a decade of full success? $0.1 to $20000 to $9000, yet being called as ponzi, sucks. Those people who believe that bitcoin is a ponzi scam is probably believing their economist friend, " bitcoin will pop soon ", yeah okay nice prediction, so when it will popped out? dang

They can also think that if bitcoin is a ponzi then satoshi is the first one that's only going to make money yet he's not. But where he is? he even left an enormous wealth in the network and no one even know where he is.

He even left his work with us, people these days better be thinking right, who'll make profit out of this scam, it's even decentralized *facepalm*

[wxa7115]

It is not just that. Bitcoin is counting on new money entering, just as Ponzi's do.

You mean with like pretty much all assets? So with that logic, gold is also a Ponzi scheme because it wouldn't rise in price without new money entering. Or maybe.. just maybe. It's just the law of supply and demand!?!??!11

Agreed.

What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business.

https://www.sec.gov/fast-answers/answersponzihtm.html

Scammers are using bitcoin and other cryptocurrencies to commit a ponzi scheme but bitcoin itself is not a ponzi scheme, satoshi never promised returns to anyone if they invested their money in bitcoin, in fact he even argued that bitcoin could be worth a lot in the future or nothing, which is true for most business and technologies anyway, if the price of bitcoin or any stock goes up it simply has to do with the law of supply and demand.

Besides blaming bitcoin for the scam is like blaming Microsoft because a bunch of scammers used their name to deceive people, the scammers are to blame not Microsoft and the same applies in the case of bitcoin.

[sunsilk]

No need to argue with those people that keeps on telling that bitcoin is a ponzi. There's probably a reason why they are butthurt and keeps on telling that bitcoin is like that. And the reason that we can think of is that they've missed buying the dip.

Don't tell them that Satoshi is just waiting for the price to get $1,000,000 before running away, let's keep our mouth shut about this plan okay? HAHAHA I still don't know why we need to argue about this really, after a decade of full success? $0.1 to $20000 to $9000, yet being called as ponzi, sucks. Those people who believe that bitcoin is a ponzi scam is probably believing their economist friend, " bitcoin will pop soon ", yeah okay nice prediction, so when it will popped out? dang

There are people that never stops thinking like that about bitcoin. It could be that they have an agenda for doing that or they really are just bitcoin haters for doing so. Their reaction will be priceless if they witness bitcoin's skyrocketing again.

They can also think that if bitcoin is a ponzi then satoshi is the first one that's only going to make money yet he's not. But where he is? he even left an enormous wealth in the network and no one even know where he is.

He even left his work with us, people these days better be thinking right, who'll make profit out of this scam, it's even decentralized *facepalm*

A legendary guy, left us a technology that's life changing and helpful to the world.

[pixie85]

It can't be a ponzi because:

that ponzi is a business many investors lose while the people that set it up gained as many as possible money

Actually, if you bought Bitcoin at any point in time but for December 2017 and January 2018, you'd have made profit. So 99% of people who ever touched Bitcoin and helf it would have more money now than they had when they invested. This single thing kills the idea of a ponzi scheme.