I have heard this garbage time and time again from people ignorant of the realities of blockchain technological genius –purporting that steem and bitcoin are another Ponzi scam. This is not new because ignorance can lead to stupidity and in worst case scenario , fear , cynicism and subsequently , conflict. In addition, most ask where does the money that members in steemit earn come from and thus come to a premature conclusion without doing a constructive due diligence.
Why are Ignorant people Calling Steem & Bitcoin A Ponzi Scheme
Peter Schiff , for example , is a very smart gentleman and one of bitcoins biggest critics . Recently, he compared bitcoin to Beanie Babies! And warned his followers on his radio show (June 20th 2011) not to invest in bitcoin when it was trading at approximately 17 USD (Oh my goodness!!!). Is he right ? or is there a conflict of interest due to his investments in gold? Or is it extreme ignorant ? or does he belong to supporters of governmental control on our money and freedom? (feel free to send in your answers below).
Before I proceed, I will give a succinct definition of Ponzi scheme: According to Investopedia, a Ponzi scheme is a dishonest investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. Moreover, the first well known Ponzi scheme was coordinated by Charles Ponzi in 1919 –read here for more.
Steem and Bitcoin does not fit in the definition of Ponzi scheme due to these reasons:
- Does Steem or Bitcoin have a centralized body that funnel money up to the top? :No
- Does Steem or Bitcoin promise high yield return on investors? : No
- Does Steem or Bitcoin require cash flow from new investors to sustain it just like Ponzi ? : No
- Unlike Ponzi schemes, Steem and Bitcoin will still have value and continue to function even if no new participants join the ecosystem.
Therefore , steem and bitcoin are no Ponzi scheme rather a blockchain technological ingenuity that is making our world a better and more free place.
The Steem Ecosystem
Steem system is built on secure blockchain software that run on computers and there are 3 types of assets that run on the ecosystem: Steem , Steem Power and Steem Dollars.
Steem and steem power are comparable to company shares and Steem dollars, are created as a loan on Steem collateral and issued to contributors to the ecosystem as currency.
Moreover , a blockchain-based software network creates Steem Dollars, to be used as a currency, from loans on Steem digital assets which have financial worth because they're useful to a growing Steemit community , and are rare.
So let it be clear to all that steem and bitcoin are no Ponzi scheme. Feel free to invite your friends, colleauges and family members to join steemit and benefit from the ingenuity of blockchain technology.
Do you agree? Send in your comments, pls upvote and resteem to show your support.
Do you want to make more money on steemit? Click here and read: Stop Whining, Here Are Way To Improve Your Earnings On Steemit