Is Bitcoin a Ponzi Scheme?

A Ponzi Scheme is commonly known as a type of investment. Bitcoin is a peer-to-peer payment system. They are vastly different. Let's take a look at their differences.

"I'm tired of people calling Bitcoin a ponzi scheme."

Origin of Ponzi Scheme

First, I want you know that ponzi scheme was originated way back in the 1920's named after Charles Ponzi. He was the first to use the scheme that's how it became known as ponzi scheme.

How Ponzi Scheme Works

It works by luring investors to invest money into the scheme. The investment of a new investor will be used as a revenue to be given to the old investor rather than investing the money to a legitimate business.

Kindly visit Wikipedia.org for an in depth information about ponzi scheme so that you can avoid being victim of this type of investment in the future.

Difference of Bitcoin to Ponzi Scheme

Satoshi Nakamoto envisioned and created Bitcoin as a peer-to-peer type of payment system, he doesn't made Bitcoin to be an investment. Bitcoin only become an investment when traders, businessmen, and entrepreneurs started to trade it on an exchange or online cryptocurrency exchange.

In its purist form Bitcoin is a system wherein you have to convert your money to bitcoin then transfer it anywhere in the world without going to a third party like banks, money transfer services like western union and the like. You can buy anything in an establishment wherein bitcoin is accepted just like Visa, MasterCard, Maestro.

You can buy prepaid load using bitcoin, even pay your bills just using your bitcoin wallet or app. All the services mentioned above regarding bitcoin can be accomplished using only your mobile phone provided that you a have a bitcoin wallet app installed.

With that premise, how does Bitcoin become a ponzi scheme? Does it lure investors? No. Does it uses your funds/bitcoin? No. Does anyone holding your bitcoin so that it will gain interests just like in banks? No.

Bitcoin is decentralized, no one is in control of your funds/bitcoin except you.

"You can even use Bitcoin as your personalized bank"