If Bitconnect is a Ponzi Scheme why isn't Bitcoin also?
I want to address the current controversy around Bitconnect by asking the obvious question to those who claim 'Bitconnect is bad because it's a Ponzi scheme'. If this is what makes Bitconnect bad then isn't Bitcoin worse since it has an even higher market cap, more supporters, and can collapse in price at any time causing people to lose their life savings in exactly the same way?
They will probably respond with: 'Bitcoin has a function, it can be a payment system, it is cash'. Bitconnect also has a token even more advanced than Bitcoin which is hybrid proof of work proof of stake. The difference is Bitconnect offers a circular economy based on lending and the Bitconnect pyramid structure is a lot more obvious. Bitcoin has a pyramid too though, because people who got into Bitcoin early have every reason to want others to buy Bitcoin so they can sell their 10 Bitcoin for 10 million dollars.
When Bitcoin arrived people said it was a scam and many people including officials in China still say Bitcoin is a 'Ponzi-Scheme'. Do not take my words in the wrong way, as I am not endorsing Bitconnect or Bitcoin but merely asking for the supporters of each of these two competing platforms to distinguish the difference which makes one of the two a pyramid or Ponzi scheme? Because by the definition of a pyramid scheme a case could be made that because Bitcoin isn't backed by anything but computation resources, and because earlier lenders of computation resources paid less and get much more from it, maybe it too is a pyramid scheme like Bitconnect with the difference maker being that in Bitcoin the earliest users had to lend their CPU cycles while in Bitconnect it was straight up cash.
Both Bitconnect and Bitcoin have mysterious beginnings, anonymous developers, and people deem either of the two as extremely risky investments. That is why I want to understand why either side has moral weight to demonize the other side. In terms of risk, Ethereum with it's ICOs are also extremely risky and most investors will lose, yet people hype and market ICOs which very well probably are mostly scams.
Obvious scams make promises, take our money, and provide nothing in return. Bitconnect provides a centralized exchange website, a functioning blockchain, and potentially more. Their centralized exchange could trade BCC vs all other tokens in the future and become the next BTC-E type of exchange. Their blockchain functioning means Bitconnect cannot be shut down by anyone so if it is a Ponzi Scheme how would anyone stop it without also being able to use those same tactics to stop Bitcoin?
Bitcoin provides a lot as well, such as a huge community of developers, businesses use Bitcoin, and while there is controversy around forks such as Bitcoin Cash, it still offers something. Is it possible to be a Ponzi Scheme while also offering something in return for the investment? According to Bart Chilton all it takes for something to no longer be a Ponzi or Pyramid Scheme is for it to have a real world function. Bitconnect and Bitcoin both have tokens, and like it or not, they do have real world functions beyond just speculation.