How do I convince people that Bitcoin isn't a financial pyramid?

[just_Alice]

With more and more influential people and companies getting involved with Bitcoin there's been a lot of talks about the crypto world among regular people, to whom Bitcoin is still something new and unknown.

As you might expect, many of these people believe that Bitcoin and all other cryptocurrencies will not benefit the economy, but rather only make it worse, and many are convinced that Bitcoin is yet another pyramid. And what upsets me the most is that among these people are economists, financial advisors, they should know better, than that...

So how do I prove them wrong?

Though I'm not a professional economist, still I've come up with some arguments as to why Bitcoin ISN'T a financial pyramid:

1. There's no single beneficiary
In financial pyramids, there's always someone, an organization, or a group of people who benefit from peoples' investments. Who benefits from Bitcoin? Anyone can become that person if he/she invests enough money, there's no one, who controls it.

However, a friend of mine argued that there are people, who benefit: electric companies from large energy consumption due to mining and the companies that develop and sell the miners.

But that's just crazy, to believe in that we'd have to assume that they're all in collusion.

2. There's no need for new recruitment
That's probably my favorite. The main reason why financial pyramids survive is that they constantly recruit new customers. Without that - the pyramid falls.
But there's absolutely no need to recruit new people for Bitcoin to function, am I right? Without new users, there'll be just redistribution of what there is among the current users, txns will still be going and the miners will have work to do. So there's no required amount of users for Bitcoin to function like there is in the pyramid. I see no potential flaws here.

3. There are no promises
In financial pyramids, it is common that an organization lures people in by promising that they can easily "turn $100 into $1000", for instance. There's no such thing with Bitcoin. Yes, there's a potential for it to grow, you can make money out of it, but there's also a potential for it to drop, everyone invests knowing this can happen and sometimes it does happen, we go in here being aware of the risks.

That's about it.

Also, one thing that people keep telling me and get me cornered with is that there's no actual value behind Bitcoin. And that the economy can't function like that. Making Bitcoin only requires resources (e.g. energy, machines), but Bitcoin doesn't give anything in return. They say that behind the fiat there's an actual value, which is why we can avoid inflation: precious metals, country resources, plus it is fixed to the GDP, which is why the economy can be stabilized.
Without that - fiat is just paper. And while Bitcoin has nothing like that fixed to its price - it is also nothing.
They say you can't just "create" money out of nowhere. The only way Bitcoin can function as a part of the economical system - is if we replace the fiat with it. What can you say about that? Sounds reasonable, but I'm not a specialist. Is that really true?

Don't hesitate to point out if I'm wrong somewhere, it'll help a lot. Also, it would be very helpful if some of you could come up with more arguments, proving that Bitcoin isn't a financial pyramid.

I know it isn't and I also want other people to know that it isn't, and for that, I need as many arguments as possible.

[dohh]

Do you want me to nod with you, or to reject your arguments?

1. There is. For understanding that you need to put together data from different sources.
First, long-term planned distribution: https://en.bitcoin.it/wiki/Controlled_supply
Second, a formula that makes sure, a huge pot of coins comes free to their owners: https://www.coindesk.com/bitcoin-mining-difficulty-record-20-trillion-january-2021

2. Except there is. the vast majority of BTCs are exchanged for another worthless token, USDT, BTC has very little utility as a currency. The minority that comes in with their real money is very similar to recruits of a pyramid scheme.

3. This forum is full of promises. 90+ % of posts are made of promises. HODL, and you´ll do fine. LN will solve the problems. These are ALL PROMISES. Hell, BTC´s "deflatory" design is a promise, nothing else. That is very closely linked with a rightful expectation for profit in the future.

BTC is not a pure pyramid, it´s a more complicated fraudulent scheme.

With more and more influential people and companies getting involved with Bitcoin there's been a lot of talks about the crypto world among regular people, to whom Bitcoin is still something new and unknown.

As you might expect, many of these people believe that Bitcoin and all other cryptocurrencies will not benefit the economy, but rather only make it worse, and many are convinced that Bitcoin is yet another pyramid. And what upsets me the most is that among these people are economists, financial advisors, they should know better, than that...

So how do I prove them wrong?

Though I'm not a professional economist, still I've come up with some arguments as to why Bitcoin ISN'T a financial pyramid:

1. There's no single beneficiary
In financial pyramids, there's always someone, an organization, or a group of people who benefit from peoples' investments. Who benefits from Bitcoin? Anyone can become that person if he/she invests enough money, there's no one, who controls it.

However, a friend of mine argued that there are people, who benefit: electric companies from large energy consumption due to mining and the companies that develop and sell the miners.

But that's just crazy, to believe in that we'd have to assume that they're all in collusion.

2. There's no need for new recruitment
That's probably my favorite. The main reason why financial pyramids survive is that they constantly recruit new customers. Without that - the pyramid falls.
But there's absolutely no need to recruit new people for Bitcoin to function, am I right? Without new users, there'll be just redistribution of what there is among the current users, txns will still be going and the miners will have work to do. So there's no required amount of users for Bitcoin to function like there is in the pyramid. I see no potential flaws here.

3. There are no promises
In financial pyramids, it is common that an organization lures people in by promising that they can easily "turn $100 into $1000", for instance. There's no such thing with Bitcoin. Yes, there's a potential for it to grow, you can make money out of it, but there's also a potential for it to drop, everyone invests knowing this can happen and sometimes it does happen, we go in here being aware of the risks.

That's about it.

Also, one thing that people keep telling me and get me cornered with is that there's no actual value behind Bitcoin. And that the economy can't function like that. Making Bitcoin only requires resources (e.g. energy, machines), but Bitcoin doesn't give anything in return. They say that behind the fiat there's an actual value, which is why we can avoid inflation: precious metals, country resources, plus it is fixed to the GDP, which is why the economy can be stabilized.
Without that - fiat is just paper. And while Bitcoin has nothing like that fixed to its price - it is also nothing.
They say you can't just "create" money out of nowhere. The only way Bitcoin can function as a part of the economical system - is if we replace the fiat with it. What can you say about that? Sounds reasonable, but I'm not a specialist. Is that really true?

Don't hesitate to point out if I'm wrong somewhere, it'll help a lot. Also, it would be very helpful if some of you could come up with more arguments, proving that Bitcoin isn't a financial pyramid.

I know it isn't and I also want other people to know that it isn't, and for that, I need as many arguments as possible.

[Lucius]

Don't get me wrong, but I personally don't think you need to convince anyone that Bitcoin is this or that - because there is the internet and all information is public, anyone who wants can be informed at any time. Any attempt to explain Bitcoin to someone can actually act as if you are doing it for your own financial gain.

I have personally encountered two groups of those who are extremely negative when BTC is mentioned to them. The former do not understand it at all, some simply because they have a low level of education or have gained the belief that it is something illegal and do not want to have anything to do with it, and the latter are actually very disappointed that they missed the opportunity to get rich, and now they want everything to fail.

I think many people live under the misconception that Bitcoin must replace fiat in order to succeed, but that is something that is very likely not to happen in the near future while the world is functioning the way it is now. Bitcoin is just an alternative to the existing system, it is not a rule or a law that someone has to apply.

BTC is not a pure pyramid, it´s a more complicated fraudulent scheme.

1. There is. For understanding that you need to put together data from different sources.
First, long-term planned distribution: https://en.bitcoin.it/wiki/Controlled_supply
Second, a formula that makes sure, a huge pot of coins comes free to their owners: https://www.coindesk.com/bitcoin-mining-difficulty-record-20-trillion-january-2021

2. Except there is. the vast majority of BTCs are exchanged for another worthless token, USDT, BTC has very little utility as a currency. The minority that comes in with their real money is very similar to recruits of a pyramid scheme.

3. This forum is full of promises. 90+ % of posts are made of promises. HODL, and you´ll do fine. LN will solve the problems. These are ALL PROMISES. Hell, BTC´s "deflatory" design is a promise, nothing else. That is very closely linked with a rightful expectation for profit in the future.

Are you still trying to convince someone of your vain philosophies that you started spreading in 2018 on the forum? I can only say that you did not succeed then, and the same will happen now - I would certainly put you in the group of those who missed the opportunity to invest cheaply in BTC, and now you are very sorry that some others managed to do just that. To conclude, you write the same nonsense as three years ago - in fact only in a slightly modified form.

Yes, You are correct, it is not a ponzi scheme. It´s different monetary scheme, yet not defined.

Things for You to consider:
1) Why is number of possible bitcoins limited with 21 millions?
2) Why are people rewarded with bitcoins in return of investing computing power? And even more importantly: why all people, who invest, dont get coins then?
3) Who wins the most if bitcoin is bubbled?

You can not tell, that bitcoin is ponzi or pyramid, although it has some elements from both. I would say, bitcoin is a fantasy, that has grown way too big and people now want to make use of it. Coin owners want bitcoin to grow again and believers think, there is a way to get rich by digging coins.

[tranthidung]

BTC is not a pure pyramid, it´s a more complicated fraudulent scheme.

Ponzi teams can use any tools to run their pyramid business. Bitcoin is only one of their tools and tools are changed by trend in society. Nevertheless, it does not mean that tools are used by them are scam from their intrinsic specifications.

You can not say gold is a scam asset if you find out a ponzi scheme with gold is presented in their advertisement. The same goes for bitcoin and whatsoever.

Please be differentiated between intrinsic scam specification and is abused/ used as a scam tool.

[Upgrade00]

As you might expect, many of these people believe that Bitcoin and all other cryptocurrencies will not benefit the economy, but rather only make it worse, and many are convinced that Bitcoin is yet another pyramid. And what upsets me the most is that among these people are economists, financial advisors, they should know better, than that...

Bitcoin was not created to benefit the economy, it is not a fiscal policy like what financial agencies implement. Bitcoin is a peer to peer network which offers freedom to its users. The speculative quality is a side effect.

So how do I prove them wrong?

Tell them to do their research on it, and make inquiries without prejudice. Most people who don't understand it would not take it to be a pyramid and those who have done their research and still think it to be one are FUDsters.

[Peanutswar]

I think there is no way if the people have different beliefs and perspectives with the use of the bitcoin. It's too quite hard to believe if you even experience to earn ( the people you want to convince).

I think one of the most effective ways is to let them discover the use and purpose of the bitcoin investment so they can make more conscious about the possible transactions just to earn through this cryptocurrency.

There's money involved and of course, only risky takers would like to join again. The best thing is to let them realize the bitcoin itself.

[Rikafip]

I think many people live under the misconception that Bitcoin must replace fiat in order to succeed, but that is something that is very likely not to happen in the near future while the world is functioning the way it is now. Bitcoin is just an alternative to the existing system, it is not a rule or a law that someone has to apply.

Exactly this is the the main problem I noticed when talking about bitcoin with people that are in the "contra" group. They see situation white and black, and they consider bitcoin completely useless if it doesn't overtake fiat. Which is honestly not realistic anyway, at least not any time soon, as much as we would like it.


Regarding the OP and convincing people that bitcoin is not a pyramid, I usually don't bother with that, at least not anymore as it proved to be pointless. So why then to waste energy. Majority of them will come to the sense anyway, sooner or later, while some will see it a scam no matter what, and mostly because they think that they missed the train so it's easier to comfort yourself that way.

With that being said, it's not a bad idea to be prepared, if one likes to argue



As Satoshi Nakamoto famously said , "If you don't believe me or don't get it, I don't have time to try to convince you, sorry".

[abel1337]

You gave the right points. I don't know why would some people think that bitcoin is a pyramid scheme. Maybe bitcoin is repeatedly used by those scam frauds as a tool in their scheme and in the end, bitcoin was the one who will the victims blame. One example of the pyramid scheme that is mainly using bitcoin as a front is the infamous Bitconnect which led thousands of victims to hate bitcoin because of what happened.

You can easily tell those people that bitcoin has its own market like the stock market. If they don't believe you, just tell them to search if bitcoin is a pyramid scheme in google so that you can justify and convince them easily.

[adzino]

You have some good points over there. But you missed one thing. Tell them to read news or articles form reliable and authentic sources. Most of those people that think bitcoin is a "financial pyramid" or scam are the ones that read news or articles from some random clickbait sites or from social media. Articles they read are mainly FUDs. Mainstream media mainly broadcasts/publishes news that has somewhat a "negative" tone towards crypto currencies.
Provide them with links and sources where they will be able to enlighten themselves properly.

[Asuspawer09]

I think we can't really convince people that bitcoin is not some kind of scams or pyramiding scheme on the internet, its you don't have knowledge about bitcoin probably you have a lot of doubts about bitcoin.

What I do is just explain the basic of bitcoin to someone, and then from that, its depend on them what they want to think about it, mostly if they already started using bitcoin and experience that is where it starts.

In the end, we don't have any assurance on everything from our investment in bitcoin that is why there is a risk in investing in it and we know that we don't know something could occur in the future that could mess everything up.

[Sterbens]

As you might expect, many of these people believe that Bitcoin and all other cryptocurrencies will not benefit the economy, but rather only make it worse, and many are convinced that Bitcoin is yet another pyramid. And what upsets me the most is that among these people are economists, financial advisors, they should know better, than that...

So how do I prove them wrong?

Unfortunately, those who are highly educated on average, can easily say bitcoin uses a pyramid scheme system. I am confused whether they absorb lessons or not when they are in college. because such a formula is a basic formula. well the pyramid formula they say. and strangely enough it applies to bitcoin? funny what they believe has violated their scholarship in the field of economics.

oh, yes my friend, I suggest to you, that you do not convince economists with theory and also some arguments. it will be worth it. all you have to say to them is "it's up to you" because you know, in the field of economics they can make arguments as well as eloquence in debate (as if they know the ins and outs of the economic flow). while the fact is very far away, it is evidenced by their words regarding the pyramid system with bitcoin.
I'm sure the person in the photo will laugh when they hear what they say

[Yogee]

....Also, one thing that people keep telling me and get me cornered with is that there's no actual value behind Bitcoin. And that the economy can't function like that. Making Bitcoin only requires resources (e.g. energy, machines), but Bitcoin doesn't give anything in return. They say that behind the fiat there's an actual value, which is why we can avoid inflation: precious metals, country resources, plus it is fixed to the GDP, which is why the economy can be stabilized.
Without that - fiat is just paper. And while Bitcoin has nothing like that fixed to its price - it is also nothing.

I haven't really encountered anyone saying it's a pyramid scheme but the main argument is it's not backed up by anything. It's hard to argue with people who are stuck with the mindset of traditional investments and businesses. They love to compare BTC to stocks that's backed up by a company or to fiat that represents a country's reserves. They'll never accept if you say BTC is backed up by the Bitcoin network and its value can also be derived from the cost of mining or what the market dictates.

[dohh]

Are you still trying to convince someone of your vain philosophies that you started spreading in 2018 on the forum? I can only say that you did not succeed then, and the same will happen now - I would certainly put you in the group of those who missed the opportunity to invest cheaply in BTC, and now you are very sorry that some others managed to do just that. To conclude, you write the same nonsense as three years ago - in fact only in a slightly modified form.

Yes, You are correct, it is not a ponzi scheme. It´s different monetary scheme, yet not defined.

Things for You to consider:
1) Why is number of possible bitcoins limited with 21 millions?
2) Why are people rewarded with bitcoins in return of investing computing power? And even more importantly: why all people, who invest, dont get coins then?
3) Who wins the most if bitcoin is bubbled?

You can not tell, that bitcoin is ponzi or pyramid, although it has some elements from both. I would say, bitcoin is a fantasy, that has grown way too big and people now want to make use of it. Coin owners want bitcoin to grow again and believers think, there is a way to get rich by digging coins.

Yeah, I was indeed one of the early ones who understood how BTC really works. And yes, I won´t "succeed" as if you all somehow converted into skeptics As a critical thinker, I try to write more relevant things and leave out the less relevant. At the moment I answered his arguments, can´t see why you copy me back my other statements... As if anyone could ever cover EVERY aspect in one post...

Me personally... I have not bought a single coin, neither I am not sorry for anything. Just the part of my braid that does the math, works and cries out loud. Not because some of you scam a lot of money out of simpleminded, but because of these BS of arguments, that so many people buy. World is really a stupid place as an average.

[The Cryptovator]

You can't convince them who hate bitcoin, same you can't convince them who telling Bitcoin is a financial pyramid. Time is over to convince them, they should learn from the generation now. A decentralized cryptocurrency wouldn't give you any return on your investment, because no one on the other end holding your money. Bitcoin is with you and you are fully responsible for loss or profits. No one can raise the price or dump it. The only difference is, Bitcoin backed by the community, and the price depends on the community demand as well. That's the real truth, nothing suspicious for the Ponzi pyramid. A currency wouldn't be a pyramid itself, so why Bitcoin would be a financial pyramid?

[coolcoinz]

Me personally... I have not bought a single coin, neither I am not sorry for anything. Just the part of my braid that does the math, works and cries out loud. Not because some of you scam a lot of money out of simpleminded, but because of these BS of arguments, that so many people buy. World is really a stupid place as an average.

Firstly, please fix your quotations. You're doing your best to make your posts look smart and can't even place proper code tags.

Secondly, you're in denial. When you first read about Bitcoin it looked like a scam to you, so you tried hard to prove it is a scam, while it was growing and becoming more popular, but then you thought to yourself: it's too late to change my mind now, I'll keep going, it can't be real. Now you're stuck in this awkward situation where famous people are investing in Bitcoin and you're that grumpy guy in the corner who refuses to join the party or leave and find other entertainment. Instead, you're standing there alone, mumbling: you're all stupid, you'll all lose, I'm the only one who sees through it all.  

Thirdly, who is scamming here? It's a free market where people are free to buy and sell at any point. Ask people who bought a month ago and sold this week if they feel scammed. Ask people who bought a year ago if they feel scammed, ask people who bought 3 years ago if they feel scammed... I could go on.

[androyster]

If BTC is a pyramid scheme so is Gold and every other rare metal.  So are Diamonds, so is the US dollar.  Oh don't leave out the stock market.

[Kong Hey Pakboy]

You have some good points over there. But you missed one thing. Tell them to read news or articles form reliable and authentic sources. Most of those people that think bitcoin is a "financial pyramid" or scam are the ones that read news or articles from some random clickbait sites or from social media. Articles they read are mainly FUDs. Mainstream media mainly broadcasts/publishes news that has somewhat a "negative" tone towards crypto currencies.
Provide them with links and sources where they will be able to enlighten themselves properly.

This is true. I don't know what's the deal of the accounts randomly posting comments on social media platforms about crypto and they are mentioning the same person about it, but definitely I won't believe in them. First, the posts are all the same, copy pasted from one source, and we don't know who that is. Also, It really looks like a scam and also the accounts who post it. So instead of people encouraging to use bitcoin, it became annoying to them, without knowing if it is real about what it is saying about crypto. If we want to convince people, we should start teaching them properly about it.

[Lucius]

Exactly this is the the main problem I noticed when talking about bitcoin with people that are in the "contra" group. They see situation white and black, and they consider bitcoin completely useless if it doesn't overtake fiat. Which is honestly not realistic anyway, at least not any time soon, as much as we would like it.

People living in some fairy tales that are just fairy tales and nothing more, don’t look at the bigger picture at all - the world is actually one huge conflict of interest, and Bitcoin is currently just one small variable that is in the process of being evaluated between all those interests.

As Satoshi Nakamoto famously said , "If you don't believe me or don't get it, I don't have time to try to convince you, sorry".

That's right, Satoshi knew how to value his time, and so should each of us - because when you think about how much time you spent explaining to someone what Bitcoin is - and instead of thanking, you turn out to be a weirdo and a criminal who wants to overthrow the government and monetary system.

Firstly, please fix your quotations. You're doing your best to make your posts look smart and can't even place proper code tags.

You took the word out of my mouth, and I will just add that those who do not know how to use the basic functions of the forum should not prove to anyone that Bitcoin is a Ponzi or a fraudulent scheme. I read the same things for more than 5 years, and I have no doubt that I will read the same for the next 5 years. I have nothing against other opinions, but we should deal with the facts - and the fact is that BTC has been around for 12 years and has nothing to do with someone wanting to deceive someone. Everyone has the free will to buy BTC or not.

[rat03gopoh]

Simply put, bitcoin is a currency, not a financial system.
If fiat can be used to purchase items, bitcoin too.
If fiat can be used in accounts payable, bitcoin too.
If fiat can be used in a pyramid scheme, bitcoin too.
Bitcoin still adopts the general fiat function, only its characteristics are more improved and the mechanism of use is slightly different.

The pyramid scheme existed even before bitcoin was invented and the value media used depends on the era (ranging from gold, securities, banknotes, to digital money as it is now). Even if a pyramid scheme had been discovered in the Stone Age, stones would be the object.

[fiulpro]

I do think the actual value behind Bitcoins is the Investors itself, we have the biggest companies investing in Bitcoins and they have had seen the whole thing since years and what did they do ?
They invested millions !
I do think this should be enough of a backup point for the people that millions are being poured in from different directions and people are literally asking for the value of Bitcoins Shouldn't this be itself evident. At the same time these people should also know that every person who holds even the slightest of the Bitcoins is very important in the ecosystem itself. I do think Bitcoins is not something that we can define by the laws and the terms made years before when we have few options available. It's a new world system and you know Bitcoins is Bitcoins itself. Why do they even want to define it in the traditional terms? Is the acceptance of new era that hard?