Is cryptocurrency a financial pyramid

[JayTrain]

     I understand the perspective you're sharing about the circulation of money and its impact on the price of Bitcoin. It's true that the demand for Bitcoin can increase when there is more money available for people to spend. However, it's important to note that the value of Bitcoin is also influenced by various other factors such as market sentiment, technological advancements, regulatory developments, and overall market conditions.

     Regarding your question about whether cryptocurrency is a financial pyramid, it's essential to differentiate between legitimate cryptocurrencies and fraudulent schemes. While there have been instances of scams and pyramid schemes in the cryptocurrency space, it would be incorrect to label the entire industry as such. Many cryptocurrencies, including Bitcoin, have a genuine use case and are backed by a decentralized network and technology.

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[hatshepsut93]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post, I couldn't agree less with the author/writer because at the long run, it seems money is just circulating and the moment  money seizes circulation, even the price of bitcoin  is affected, hence the price of bitcoin  would increase if demand increases and demand can only increase when there is more money to spend.

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

You are talking about cryptocurrency and Bitcoin as if its the same thing. But there are thousands of cryptocurrencies and only one Bitcoin, and Bitcoin is different from all of them because it has developers who actually develop it, while for altcoin developers their coin is just a way to make millions quick.

Altcoins have some similarities with ponzi schemes. They promise to eventually deliver some working product that will be popular, but they don't plan to actually do that. And the profit of early "investors" comes from the investment of late investors, who get burned when there's no more new investors. And the people who profit the most are the creators of a coin who own a large part of the pre-mined supply.

So, most cryptocurrencies can be loosely described as decentralized ponzi schemes.

[panganib999]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post, I couldn't agree less with the author/writer because at the long run, it seems money is just circulating and the moment  money seizes circulation, even the price of bitcoin  is affected, hence the price of bitcoin  would increase if demand increases and demand can only increase when there is more money to spend.

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

Diamonds are expensive because people said so, backed the value, and urged people that it is valuable. So is gold, but the difference is it has a pretty solid use case beyond just looking nice. Dollars are the same, they were once backed by gold but after that they basically just said "Trust us, we're this valuable please" and the people bought that notion. All I'm saying is, if bitcoin, something that follows the flow of events as these commodities and valuable assets, are considered by some to be pyramid, ponzi, whatever the fuck they call it nowadays, then might as well call everything that humanity thought to be valuable up to this point as a scam you know? Cause what's stopping everyone really from crashing the price of those aforementioned assets but the holdings of the ones at the top? Soon as those mfs sold their holdings everyone's gonna be scrambling to sell theirs too to save value. Isn't that the same thing as a ponzi?

[darkangel11]

The article posted by OP is already gone, so either it got flagged, or the author decided to withdraw.
People were calling bitcoin a ponzi scheme for years, but it's pretty easy to prove them wrong. A ponzi scheme needs a designer who profits from the scam. With bitcoin there's no such person, but the supporters of the theory came up with another angle, that all the early adopters are the perpetrators. Again this is pretty dumb, because how could more than a thousand people who bought bitcoin in 2010 work together to sell the idea to the rest of the world, to later profit from it. It's more of a conspiracy theory than a real thing.

Ok, so let's say the first 100 people were working together. Satoshi never sold his coins, even though he would've been one of the richest people in the world. Hal Finney did not profit from it, so who were the perpetrators? If Laszlo was willing to spend a lot of bitcoin just to prove that he could buy something, maybe the deal was not to scam people but to prove that trading with a decentralized currency can be done?

What's going to happen when bitcoin reaches its 20 year anniversary? Will idiots still think that there's someone pulling the strings? A designer of the scheme who's waiting to finally sell his bitcoin and become a multibillionaire, after 20 years of waiting in the shadows? What's the limit? 12 years? 15? 25? How long would you wait?

[flyingcarpet]

There has been discussion about this plan before. But there is no evidence that Bitcoin needs more supply to rise. I don't think such a thing is true. When the time comes, bitcoin, whose supply is limited, will set the price and rise without needing any supply. One of the problems we will face will be the increase in transfer fees. We already know the reasons for this. It will be easier to progress when this is prevented. The real question is how long these price increases will continue. I said that there will be an increase in price without the need for supply, but we can think of the supply here as too much supply. I don't think this will be needed.

[karmamiu]

There has been discussion about this plan before. But there is no evidence that Bitcoin needs more supply to rise. I don't think such a thing is true. When the time comes, bitcoin, whose supply is limited, will set the price and rise without needing any supply. One of the problems we will face will be the increase in transfer fees. We already know the reasons for this. It will be easier to progress when this is prevented. The real question is how long these price increases will continue. I said that there will be an increase in price without the need for supply, but we can think of the supply here as too much supply. I don't think this will be needed.

If they increase supply, they are no different than any other alt coin. What's more beneficial in this industry is to have more people to adapt and they will be the ones not only to broadcast influence but also to increase demand that makes bitcoin more limited, which means that the value will further increase. We are all drawn from the mentality of exclusivity, this is also why people wanted to acquire things which are not common to other people. They wanted the feeling of anything that isn't achievable by anyone. What our economy needed is advertisement, but at the same time we also didn't want to be desperate enough to beg for others to adapt.

[Obari]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post,

I didn't find the news, but maybe - in some cases justifiable especially about some altcoin projects. Of course I would never agree with them when they say bitcoin is a pyramid scheme even though I admit that early investors have made huge returns.

Please read this and I have made assumptions about it in the past: https://bitcointalk.org/index.php?topic=5382044.0#post_Bitcoinisapyramid

Bitcoin doesn't need this way to get a lot of users. Each user can get their own profit according to the amount of investment they want to make. You may be recruited by people who have business interests in the name of bitcoin like many investment platforms today where you become a referral member of people who take advantage of your member status. Bitcoin doesn't require this as you are free to make any purchases based on your current financial capabilities, P2P or centralized exchanges are a great place for you to buy and invest in bitcoin.

You did a great jone with tour article and I believe  it must have taken a hell of time to out that together.
I personally tried checking the news and link but I think it has been taken down and I'm so sorry about that and I tried recording the link but it seems difficult  copying links from Quora most times.

Diamonds are expensive because people said so, backed the value, and urged people that it is valuable. So is gold, but the difference is it has a pretty solid use case beyond just looking nice. Dollars are the same, they were once backed by gold but after that they basically just said "Trust us, we're this valuable please" and the people bought that notion. All I'm saying is, if bitcoin, something that follows the flow of events as these commodities and valuable assets, are considered by some to be pyramid, ponzi, whatever the fuck they call it nowadays, then might as well call everything that humanity thought to be valuable up to this point as a scam you know? Cause what's stopping everyone really from crashing the price of those aforementioned assets but the holdings of the ones at the top? Soon as those mfs sold their holdings everyone's gonna be scrambling to sell theirs too to save value. Isn't that the same thing as a ponzi?

You're right mate and I think these things truly have values because we placed and added those values to them and I don't think Bitcoin  is exempted.
One of the major reasons from my perspective why bitcoin  keeps coming up after a bear is as a result of most bitcoin believers who always seize the opportunity  of the bear to accumulate more of bitcoin  giving it more hope.
I was at some point thinking  of the possibility  of bitcoin  crashing  is everyone has to sell their hodlings without  anyone wanting to buy.
I don't know of miners but whats the essence of  mining when no one wants to buy?

[uneng]

Cryptocurrency is a industry with around 23,000 coins and tokens. I think it's pretty inaccurate to claim every products offered by this industry are ponzi schemes. There are professionals working on this field for several years already, trying to create practical solutions for common individuals around the world, through the development of technology and innovation. We have principles ruling many of these coins, which aim to offer alternatives to the traditional centralized financial systems from our countries.

If it was all about a Ponzi, first of all I don't think the industry would be alive for 14 years so far. Moreover, there wouldn't be so much effort from those professionals mentioned above on their duties, because the main characteristic of a Ponzi is the lack of a real product and activity behind the project. Besides the fact here are many wealthy entrepreneurs and economists endorsing cryptocurrencies (mainly Bitcoin).

On the other hand, we can't deny the fact there are indeed cryptocurrencies created with the sole purpose of scamming investors. They are the called 'pump and dump' schemes which indeed use the Ponzi scheme's technique. Avoid them at all costs!

[Faisal2202]

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

Your link does not contain any article i think Quora has removed it, So i am still confused about which Pyramid are you talking about. Because there are 2 pyramids in financial one is related to Pyramid Schemes and the other relates to the Layer of the Pyramid indicating the financial system's role in this world and how it manipulates us. So, after reading some replies i think it relates to Pyramid Schemes.

Well, pyramid schemes are what? urging or convincing others to put their assets into a commodity, assets, company, etc. so that those things could bring you more money but what happens in this scheme is they rob you. And you are afraid that as money is no wonder being manipulated by those who own the most. How or in what conditions, money will stop circulation it's the rule of life "which is to get services and goods in exchange for services or goods or by using other valuable (equally) things (like money). Here, we are not concerned with the type of money (either paper or hard money).

The point is, there will be a need of goods and services for everyone and it will never stop until people are growing and improving their lives. For example, if i want to make an affiliate website, i can not handle all the work singly handed. I do need a website developer, graphic designer, content manager, content writer, Off-page SEO expert, Social manager, keyword Researcher. I can only do one or two works here but to do other i need people who have those skills and in return of their services i have to give them something valuable like money. So it's means money is being circulated. And if money is circulating then people will not leave it because it has become a need in our life.

[laurenB7742]

There's a lot of scammers in crypto and people are sceptical because of it. I also sceptical about every app I use. When enter Ownr wallet I transfered just a little there and back tocheck it all

Agreed,

But, Inherently, cryptocurrency is not a financial pyramid scheme . Using cryptography, cryptocurrencies like Bitcoin, Ethereum, and Litecoin operate on decentralized networks. In addition to being a medium of exchange, they can also be used as a store of value, okay?

Yes, the fact remains that there have been instances of fraudulent schemes involving cryptocurrencies. In such schemes, investors are deceived and false promises are made about high returns due to the decentralized and speculative nature of cryptocurrencies . It's so sad, Ponzi or pyramid schemes are frequently used to deceive investors.

[The Cryptovator]

Cryptocurrency is not a pyramid scheme; rather, it involves the circulation of money. If you search for the definition of a pyramid scheme on Google, you'll find a straightforward answer. However, in the case of cryptocurrencies, money constantly changes hands, indicating a circulation of funds. Trading occurs regularly, with individuals selling and others accumulating assets. Profits are made based on market demands and the resulting volatility. Therefore, it is clear that cryptocurrency does not align with the characteristics of a pyramid scheme.

[Magic-Money]

Cryptocurrency is not design as a network marketing, but rather is an online digital assets which one can buy and sell as people demand, in other words cryptocurrency is another means of payment online as well normal used our local currency to purchase good's and services as well. Therefore cryptocurrency is not a pyramid scheme.

[summonerrk]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post, I couldn't agree less with the author/writer because at the long run, it seems money is just circulating and the moment  money seizes circulation, even the price of bitcoin  is affected, hence the price of bitcoin  would increase if demand increases and demand can only increase when there is more money to spend.

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

The technology of a distributed registry and rewards for those who mine bitcoins and dynamic rewards simply cannot technically be a pyramid scheme.

Half of altair projects that promise the largest holders of their coins rewards can be attributed to financial pyramids. They provoke holders to buy more of their tokens, because they know that if they start selling it, panic will begin.
And tokens will cost $ 0, which usually happens sooner or later with scam projects.

[Ojima-ojo]

Bitcoin as a cryptocurrency can not be referred to as a pyramid simply because of the features you mentioned in your post and also connecting Bitcoin to a pyramid shows that you still lack the basic knowledge of Bitcoin or the cryptocurrency industry.


There is no doubt the fact that there are some cheat coins in the name of the cryptocurrency that are pouring Ponzi schemes maybe those are the ones that fall into the category you pyramid, but Bitcoin and other coins have the true features of a cryptocurrency have a chain that runs the demand to balance with the supply to produce a value that makes for the overall liquidity.

[ChiBitCTy]

It would be helpful if you posted the Quora thread that you came across but I can tell you first hand that believing most things written inside of Quora is typically not a great idea.  There's so much nonsense written on Quora isn't not even funny.  Remember its just like reddit, nothing is fact checked, it's just a bunch of opinions. 

Sure some crypto coins are pyramid schemes, but many are not.

[serveria.com]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post, I couldn't agree less with the author/writer because at the long run, it seems money is just circulating and the moment  money seizes circulation, even the price of bitcoin  is affected, hence the price of bitcoin  would increase if demand increases and demand can only increase when there is more money to spend.

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

Haha everybody knows a ponzi scheme should have a person or a group who benefit from it and eventually run away with the funds of unsuspecting participants. So tell me now does Bitcoin look like a ponzi to you? 

[BitDane]

I came across a news on Quora and I went into a very deep reason on the reality  of life and judge from the article on the post, I couldn't agree less with the author/writer because at the long run, it seems money is just circulating and the moment  money seizes circulation, even the price of bitcoin  is affected, hence the price of bitcoin  would increase if demand increases and demand can only increase when there is more money to spend.

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

It has been an argument for many years about Bitcoin being a financial pyramid scheme.  Before we think of that we should look at the nature of Bitcoin and the definition of the financial pyramid.  In financial pyramid there is a centralized authority that encourages pioneers to recruit people then those that are recruited are also require to recruit people which is not the case in Bitcoin economy.  Bitcoin has a free market and those who engage with it are not required to recruit new people in order to earn.  Bitcoin is trading in an open market and the price is dictated by supply and demand while a financial pyramid scheme is dictated by the rule created by its founder.  Also in pyramid scheme, founder and pioneers earn by taking cut on the money of new investors which is also not the case in Bitcoin.  The pyramid scheme's system collapse when there is no new recruits while Bitcoin market will survive because of the  real life use case of Bitcoin which often creates demand on its market again and again.

Some cryptocurrency goes on that path but obviously Bitcoin does not.

[bayu7adi]

I never really considered the presence of a pyramid scheme in relation to Bitcoin, as the two are entirely unrelated. However, in the realm of altcoins, which have the freedom to implement their own business models, such schemes seem to be more prevalent. Hence, it is highly likely that the association of pyramid systems with cryptocurrencies stems from altcoins.

The cryptocurrency landscape bears more blemishes caused by altcoins and their developers. Numerous altcoin projects have ended up being scams, with the number of victims growing by the day. This is why cryptocurrencies are often viewed negatively in various circles.

[stadus]

So I had to bring this to the forum to know if you guys also think, cryptocurrency is some ways a financial pyramid.
Let's discuss please

Do you mean a pyramid scheme? Because that word sounds like an outright scam.

I think people need to understand how Bitcoin actually works because not everyone treats it the same way. Let me give you an example. If I use Bitcoin for gambling purposes only, that means I would not care about its investment value. So, my point here is that every user has a different definition of Bitcoin, and I can assure you it's not a pyramid scheme or a scam. The system is built to be decentralized for transaction purposes, and investment is just secondary.

[GreatArkansas]

They likely didn’t get Bitcoin right.
(....)

Because they thought Bitcoin is like a stock or any scheme that "get rich quick" scheme or a pyramid where early people will be the only ones who will benefit.
The pyramid scheme is a fraud where investors are promised high returns, whereas on Bitcoin, no one will know what will be the return just in case you buy and treat it as an investment.
The pyramid scheme pays existing investors from new investors, which on Bitcoin, we don't have any of this.

These people don't know how Bitcoin really works besides treating it as an investment.