Why are Ignorant people Calling Steem & Bitcoin A Ponzi Scheme

in steem •  last year

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). 

Image source.

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.


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Good presentation, thanks for sharing with us and surely educating more than one needing it! All for one and one for all. Namaste :)

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Thanks for your comment @eric-boucher and more success

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May the force stay with us, all for one and one for all! Namaste :)

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Point

The only Ponzi scheme I see is the bankers and the government 😂😂😂

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I agree @stackin good point indeed, always.

I think some people view Steemit as a pyramid scheme because it appears that the most successful Steemians are the ones that have done it for a long time and the newer uses get less payout. When it reality Steemit success should be viewed as a life lesson. Those at the top have committed themselves through hard work, dedication and commitment to the platform. Don't be jealous because of their success- try to emulate it.

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Wow. @joelfriedman68
You just hit the right nail on the head! Your point is very right. I joined june & seing older members succeed due to hard work motivated me to work harder to get to their level of which am doing and as you pointed out, soon they gonna envy me too ;) great comment!

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@joelfriedman68 very good comment indeed,I agree with you. Pls See my former blog post link on the last part of this post where I indicated what you said here. Thanks for your comment and more success to you.

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Most of the Whales got in when it was a few cents per Steem. A lot harder to emulate but not impossible.

Good post. Remember when people called Ebay and Paypal a scam? How about Uber or AirBnB? What about Google or Amazon? At some point all new and disruptive technologies get labeled a scam. Seems there's always a group of cynics that don't believe things can change for the better.

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@champagnecrypto very good point from you my buddy . These cynic lost out on bitcoin and will lose out n steem if they dont join. I hope they will see @champagnecrypto youtube video on bitshares and act...lets stay in touch buddy,

Some people think everything is a scam. They will be left behind.

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kaBOOM!

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Very good comment. They truly will be left behind!

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Good point, thanks for your comment

haha awesome post ! And for sure government loves to control our money and our freedoms !! While the banks rake in billions off of us with all their never ending fees , I could go on all day LOL , but im falling asleep , and im glad you did it all ready thanks ! I totally agree with you , steem and Bitcoin is in NO WAY !!! A PONZI SCHEME !! Good night and good day my friend !!👍👍👍upped and resteemed!

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Good point Karen , you said it all. Thanks for the support-bless you. Go to sleep pls and then when you wake up, you will be filled with more ideas for us here..sleep good and dream of steem love.

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thank you!! Well rested now , blogging my little butt off !!👍👍👍

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haha, you are doing great indeed.

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Thanks ! You too my friend !! 👍👍👍

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welcome

This post beautifully simplified what was hitherto a complex understanding of what steemit & bitcoin is all about. .glad that the Charles Ponzi in 1919 that coordinated a well known ponzi scheme is not same as @charles1
This post earned my upvote & resteem! Keep it up

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welcome and thanks.

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keep it up @charles1
more of such posts

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Thanks and keep steeming

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welcome as always

Very informative post. Very revealing.
Thanks for the content @charles1

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you are welcome-success to you

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Thanks bro

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welcome

Nice article, your right, when people are not ready to make research before jumping to conclusion, you will see them calling White black. I agree with you that steemit and bitcoin is not scam or ponzi. Upvoted.

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Thanks, more succes to you.

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Your welcome

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Great

reSteemed

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Thanks a lot @digitalplayer bless you for your kindness

People call all sorts of things a Ponzi Scheme but that doesn't make it so.
All invented currencies reduce to Ponzi schemes unless there is an active community exchanging value with each other. People actively use the US dollar currency to exchange value, but if they stopped using the US Dollar then it would collapse into a Ponzi scheme. The same may or may not hold for any particular crypto-currency. Check the whether or not the community is exchanging value using that crypto.

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Good point, I agree.

There is no such thing as a limited Ponzi scheme and as Bitcoin and Steem both have fixed amounts (21 Million Bitcoins and 237,385,901 Steem) then neither can be a Ponzi scheme.

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thanks

Hi @charles1, many people have a fear of the unknown and being that we're paid in crypto, which unfortunately has its fair share of Ponzis and is foreign to most, heightens that fear... then you have those with their own agendas whereby the success of Steem and crypto will hurt their interests... while they may be privately stocking up on Bitcoin or even Steem themselves. Great post!

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You are right, good point

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Thanks for all your comments. Following you to stay in touch.

btc or steem is not ponzi. cheaters make it ponzi

No definitely not a Ponzi, but it could also backfire and you could lose your investment. So definitely the right thing to do is, if you are into crypto, just invest whatever is available to you without jeopardizing your finances and then re invest any profits you make.

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Correct. Diversification is the key.

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Very good point you made my friend. Nice comment...

@charles1 If Peter Schiff wasn't busy pushing various companies and his own agenda he could maybe take the time to understand cryptocurrencies. However, I think that he knows more than what people think, but there is no way for him monetize and benefit directly from crypto (referral wise) whereas if he promotes his own programs and deals he directly benefits via agreements in place with specific companies that he promotes or as an affiliate.

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Very good point. Most referals junkies dont care to promote steemit too haha ..conflict of interest in action. Thanks

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@charles1 yeah it is too much for them to comment or to write a simple blog post. Oh well!!

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Yes I agree. Good point indeed.

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@charles1 Yeah it is not that these people do not believe in crypto as I'm sure a lot of them do it is just that in public they cannot say so else that would not be the most profitable thing for their own business. Heck who knows behind closed doors they may even own some crypto (Bitcoin).

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Haha, they might even own thousands of bitcoin and ETH good point

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@charles1 yeah I believe that a lot of public professionals say one thing in public and do another in private. We have to remember what these people have been promoting for years, so if everyone moves from gold to crypto there goes his business or business interests.

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Great point indeed I agree. We have to ignore them and proceed. Which direction do you think that Eterium is going? guess that you are in for a long hold

I know, it's like they just don't understand and imediatly disregard it. BTW OmiseGO is a super amazing altcoins that I just heard about, check it out.

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Thanks, I agree. Will check it out

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I posted about it too. Tried to include all the details someone would want to know before investing in it. https://steemit.com/omisego/@jackolanternbob/omisego-low-cost-decentralized-exchange

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I checked your post and upvoted. Very informative..following you too in order to stay in touch..keep steeming

I'm new to this whole topic and never paid any attention to crypto before getting to steemit.

Can you tell me what generates the value of steem? Is is investors who convert fiat into it or something else? Thanks for any explanation.

I do understand ponzi schemes and see the differences you point out.

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Welcome. All depends on steem ecosystem which was highlighted in this post. Read about it

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Thank you for the welcome and the tip. Learning steemit is a daunting task :) I'm trying a new strategy today >>> asking @helpbot for help.

  1. Can you explain the "steem ecosystem" and how to understand it for someone who has never been involved in crypto before?

and

  1. Can you explain how changes to the steem ecosystem creates or destroy the value of steem?

Please let me know if two questions should be on two comments :) Many thanks for your help helpbot.

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that will be long to explain , and will be a topic for another post

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I will look out for that. Such alearning curve here!

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Great

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for help.

  1. Can you explain the "steem ecosystem" and how to understand it for someone who has never been involved in crypto before?
    I am still learning and have no automatic response to your inquiry yet.
    This question has been added to the @helpbot comment trail.
    If you happen to know the answer to this question reply to this comment with it.
    FYI Correct & accruate answers are rewarded! ;)
    Learn more about the helpbot...

Excellent work dear friend @ charles1, thank you very much for sharing this information, well done by the acalarcion
have an excellent week

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same here and thanks for your support.

I see no Ponzi scheme here. It still boggles my mind that someone as bright as Peter Schiff does not see the value in Bitcoin.

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I wonder too and some of his followers are disappointed that he advised them not to buy when it was very cheap.
Thanks for your comment.

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I would be disappointed too.
You're welcome.

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The same here, thanks.

I made the same mistake in 2013 when I ffirst heard of Bitcoin. If I done my research then I might not be a millionaire now but I'd have a hell of a lot more money than I currently do. The fact is, Steemit is like a smaller-scale version of life itself -- with better design rules. The map instead of the territory, if you will.

It is also considerably fairer than real life has ever been.

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You are very correct. I made the same mistake due to bad luck..heared of bitcoin last year end and steem last month (bad luck indeed) however as we know now, we will always open our eyes and ears...thanks for your coment

because snapchat has debt and they need this scheme to pay it off

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Can you elaborate on your assertion?

Ponzi scheme is the banks
Every Few Month We hear That , Another Banker Dead !!

Thanks for sharing
Great Content

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haha good point

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Thanks a lot, more success

Those are people who invest their hard earn cash into blockchain without doing a proper research. And they say all blockchain are scam.

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I agree with you..good point.

Maybe they made a post on Steemit and received no money and then they saw someone else do the same and it received a lot.

I don't think Steemit is a ponzi scheme but one man's heaven will always be another man's hell. If 2 people are doing the same thing and one receives more attention than the other, jealousy can be created at anytime.

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Correct ...thanks for your comment.

Very elucidating! Thanks for posting. I'm still an ignorant about it but I guess is due to my low knowledge on finance. But I will get there. Resteemed and following you :)

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Thanks and you will surely be a success here.

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I hope so, I'm following the right examples ;). Thanks!

They dont understand technology. They also talked against amazon when it was starting but look at where it is now. They just dont want to appreciate the achievements and progress of other people

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Point, I agree with you. Keep steeming bro

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welcome

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Very correct sir. Some people get pissed off seing others climbing at the top. Nice comment

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welcome as always...which area do you blog on?

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I mainly blog on motivation, life's issues and philosophies and sometimes touch other different areas too

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wow...same as me...am about to post new story line...do check my blog and follow for many of similar stories too and health tips..thanks

Congratulations @charles1! You have completed some achievement on Steemit and have been rewarded with new badge(s) :

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Thanks

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Haha, I want to drink some tea

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Cream & Sugar?

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with honey and citron

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Exactly haha however replace the sugar with honey

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exactly...

This is really simple Charles... let me explain. It's just like with anything else- the people who have the most to lose from the success of cryptos, the ones feeling the most threatened, start a rumor and feed it to their "useful idiots" that parrot it all over social media. QED

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Good point @richq11 I agree.

thanks for sharing your views! My friends are quite concerned that I joined Steemit and thought it was a ponzi scheme too. Though I understand it is difficult to explain to them haha

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Good point, feel free to resteem so that they can see it and read. Steemit is a gread site..see my former posts where I eleborated on why steemit is great and what you will do to get more success here. Success to you.

Ignorant people will have to buy BTC at 100,000$+ when it gets mainstream... x)

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Haha good point. It is even very expensive now and will rise mre after August first : if all goes well. Thanks for your comment

Excelent presentation !! Thank you.

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welcome, thanks for your comment

Generally those who are whining are those who want to make "quick cash". They think about investing their money into the platform. Instead they should focus on investing their time and their energy to create and share ideas. There is no such thing as a "Ponzi scheme of ideas"

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Point, however Ponzi scheme exist in Rev share segments

You said it in the title, because they are "ignorant"
Nuff said!

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Exactly. Thanks for your comment

This was extremely well written and I am a believer of the power of Steem however I do feel that their may be people operating on steem and BTC as if it were a pyramid. In short the block chain technology isn't a pyramid scheme but the huge gains have brought out the hackers and manipulators in droves.

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Good point, a lot f hackers and greedy players in the industry

I agree with gduran and steemblake. With any new idea comes risk so I would say weigh the risk against the reward and then determine how much to invest. and some people call everything a scam (as steemblake said).

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Good point, thanks for your comment

very good brotherrrrr see u on the top

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Same to you my buddy...success to you

It indeed takes only ignorance to make one think that steemit is Ponzi. Go steemsteem!!! It is the real deal👌

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Goodone, I agree. Welcome

Couldn't agree more! Very Informative,.. thanks for sharing =) @charles1

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welcome and more success to you

Hello people :D. This is a very good article, but can somebody tell me how can I manage to lead people into steemit? It seems I should sharpen my charisma or learn to debate :D

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@drago18121996 thanks for your comment. Each person has financial needs and steemit is the only social media site where people are rewarded according to their efforst and quality of their contents..I stated all these points in my former blog posts .

very true

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Thanks..

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Thanks

100% agree. When people see a huge increase in value, the easy conclusion to jump to is that it's a ponzi. It's the popular thing to say these days at the water cooler.

I'm an admittedly pessimistic investor and I did think Steem could be a ponzi when I first heard about it. Once I did some research on the platform, math behind the currency, and inflation rate, it was clear to me that it wasn't a ponzi...and I needed to join Steemit asap before the real growth kicks in!

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@financialcritic your point is very good, thanks for your comment and great posts here, bless you.

Those quick enough to call bullshit on everything always miss out @charles1.

Great post, I'm now following!

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Same here , thanks for your comment.

👍😃

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welcome, thanks for the visit

Most people, if they don't understand how a certain investment work, and this investment can potentially give a high return, they call it as scam or ponzi scheme. They need to educate themselves.

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Good point, I agree.

FIAT Currency and the Fractional Reserve Banking SYSTEM are the biggest PONZIS..

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Haha , good point indeed. Thanks for your comment.

Cool! I see we do some posts about the same topic, I wish you would write a longer one tho... 8days ago I talked about this stupid idea some people have, that's it's a scam... LMAO

Good job

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Welcome. It is ok to write long post however many people prefer it short and interesting due to many other posts to read and thus no need to spend too much time in a post.
I agree that some people should do their reseach before they lose out in crypto space.

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I agree...

But as you say brotha... "some people should do their research before they lose out in crypto space."

giphy (5).gif

"most" do get lost ::)

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Haha , lost inspace is bad because no more hope unless alliens rescue you and accept you in their territory hahaha

good post

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Thanks for your comment...

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welcome, keep steeming

some people don't axcept changes too well, they like living in world they understand, without new things, and cryptocurrency is a big change
nice article @charles1, following you

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welcome, I agree. Thanks for your comment.

Hey @charles1 , I have started a podcast recently where I interview other entrepreneurs.

The podcast is on my youtube channel, and here is the playlist: https://www.youtube.com/playlist?list=PL5CpCNPna6p95oJfKPew0N3ZT0k-khdgg

We talk about what you are currently doing in life, your business as well as your journey and any lessons or advice you want the world to know.
A casual conversation about entrepreneurship, and, about you.

Would you be interested in appearing on the show?

If so, then it is an audio only interview and will be done over Skype.
Please go to this link and pick a time that best suits you: https://calendly.com/adriannantchev/entrepreneur-podcast

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Great, I wish you success. Will check out your channel

I believe that some people prefer to be in the spotlight as the devil's advocate for the attention and press. People love to engage in debate and prove that they are right, no matter how wrong they can seem from outside. Stubbornness is blinding.

For example, Peter Schiff might want the bad publicity because any free publicity is good for his business. It also may fuel his ego or be because he's afraid of the old ways coming to an end. He also may want to be the hero who was right when everyone else said he was wrong. Worth the upside to him, perhaps.

Instead of being open-minded to embrace it and start to see the writing on the wall of a new age in front of them, they elect to dig themselves into a hole they can't get out of.

Not sure if comments on older posts will be read, but I'll put my thoughts out in play. Thanks.

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Haha @steemmatt I read all my comment if the comments are relevant. You are absolutely correct, I agree with you. Thanks for your comment

Peter Schiff can't see anything other than gold because that's all he's been spouting for the past thirty years. The whole time he's rallying on about how the dollar's gonna collapse and thirty years later we're still waiting. I'm not saying the economics of this country (and the world at large) are by any means solid, but this guy has tunnel vision. Rest assured, if he'd predicted the rise in cryptocurrencies he'd be shouting it from the rooftops.

This is interesting. I'm only beginning to learn about crypto currencies and blockchain technology.
This cleared up some of the confusion I had about steem.
Thank you for sharing. Greatly appreciated.