0

Your Cart is Empty

by Roni Rose March 20, 2018

Ponzi Scheme

noun

a form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones.

____________________________________________________________________________


Is Bitcoin a ponzi scheme? With prices skyrocketing from $1,000 to almost $20,000 in a span of twelve months, and no assets backing the coin, it’s understandable why many seem to think it is.


In 2017 alone, Coinbase grew by over 8 million users, and if you asked those who joined why they did, it’s likely because they noticed that bitcoin was growing at a crazy fast rate, had heard reports that it could eventually get to $100,000, and wanted to get in on it while it’s still early. They seemingly entered the market in a panic, with the fear that everyone else would become millionaires the following week and they would miss out.


It’s absolutely true that when people buy bitcoin, the value of existing investors’ holdings rises.


Few bought in because of their excitement over the idea of a decentralized and pseudo-anonymous payment network. In fact, when they began transacting with it, whether they were sending it to a friend or transferring it from one exchange to another, they likely became frustrated with its slow transaction speed and high fees.


So if Bitcoin grows 20x in price as new investors flood the market, falls around 60% in the following three months, and is not even a convenient transactional tool, what gives it its value?


Its main point of value is that it’s the main currency of the crypto world -- people buy other alt coins and tokens with their bitcoin and ether. And when (or if) the lightning network is implemented, transactions will be cheaper and quicker. But with the extremely low supply contributing to the massive price rises, would people even want to spend their bitcoin? Or is it more likely that they’ll hoard it?


With all of this in mind -- low supply, high demand, difficulty to transact, and a lack of an asset backing it -- it’s certainly possible that bitcoin is nothing more than a ponzi scheme the whales are winning and the rest of us will lose. Either that, or it’s a store of value like gold -- and we just need to accept that it is the asset.


So is bitcoin a ponzi scheme? That’s for you to decide.

 

Roni Rose
Roni Rose


Leave a comment

Comments will be approved before showing up.


Also in That Crypto Hustle Podcast

How Women in Blockchain can drive more equality w Thessy Mehrain
How Women in Blockchain can drive more equality w Thessy Mehrain

by Luna vega November 28, 2018

Meet Thessy Mehrain, the founder of Women In Blockchain as she shares how we drive more diversity in the blockchain ecosystem.
Read More
Is it too late to Invest in Bitcoin? OJ Jordan shares his 2019 predictions
Is it too late to Invest in Bitcoin? OJ Jordan shares his 2019 predictions

by Luna vega November 22, 2018

If you are looking for the most insightful, hype-free analysis of Bitcoin's future as we approach 2019, you've come to the right place. OJ Jordan, Crypto Entrepreneur & YouTuber, lends us his thoughts on whether the glory days of investing in Bitcoin are over.
Read More
Building A Crypto community on Telegram w Matt Nguyen from Chainfuel
Building A Crypto community on Telegram w Matt Nguyen from Chainfuel

by Luna vega November 14, 2018

Meet Matt Nguyen, the founder of Chainfuel as he shares his experience building crypto and blockchain communities  without all of the spam and shills.
Read More
News & Updates

Sign up to get the latest on sales, new releases and more …