Topic: Bitcoin - a financial pyramid: true or myth? (Read 185 times)

I don't get why people think that bitcoin is a ponzi scheme/pyramid scheme.

There is simply no central entity, and that is the exact thing that bitcoin is based on. There isn't anyone that is collecting investments. When you use bitcoin, there isn't any single person that benefits from it. That's the plain truth.

Also, it's important to note that bitcoin doesn't even promise any returns. Its price fluctuates due to market supply and demand. How this can be classified as a ponzi scheme is really just beyond me.

I'd say that most people would agree nowadays that bitcoin is a legitimate currency, though it was disputed in the past.

If we talk about crypto-currencies in general, it will be more correct to immediately split bitcoin and all other crypto-currencies, the so-called altcoyins.

So, it can not be denied that many ICOs today are forms of financial pyramids.

However, this does not mean that absolutely all alternative crypto-currencies are a fraud. Some altcoyins have a very clear and transparent pricing model. And in fact today, in my opinion, such crypto-currencies as Ether, Dash, Ripple, Litecoin, NEM, Monero and others really create value, and their price is due not only to pure speculation.

As for bitcoin, the fantastic increase in its value in recent times, of course, does not cease to excite the minds of critics, but in reality it's quite simple with him.

The first and most obvious difference between bitcoin and the financial pyramid is that there is no central beneficiary. Theoretically, of course, there are very old wallets with a very large number of bitcoins, which in some sense can be considered such a beneficiary. However, there was no official central beneficiary, and without its presence the pyramid does not make sense.

The second important difference is in bitcoin with the growth of the user base and with the growth of downloaded money, the value grows, because in any economic system this value is directly related to the number of participants in this system. Moreover, given the fact that the volume of the economy is always proportional to the square of the number of participants, and not to the number itself, the value of bitcoin grows much faster than the user base grows, and it is not necessary to talk about inflating a bubble.

And, at last, one more factor is that at bitcoin there are no obligations to anyone. That is, bitcoin never promised anything to anyone, so bitcoin as a pyramid, in general, can not collapse. Bitcoin is only a financial protocol for making, validating and storing information about transactions among network members. The bitcoin code is publicly available, each participant can explore the logic of the entire network, and some participants can not just grab the bitcoins of other participants.

Given all of the above, I can conclude that bitcoin does not fall under the definition of the financial pyramid.

What do u think about what do you think about my thoughts? Do u agree that bitcoin is not a financial pyramid?

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying".[1][2][3] Derivatives can be used for a number of purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard-to-trade assets or markets.[4] Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps.[1] Most derivatives are traded over-the-counter (off-exchange) or on an exchange such as the New York Stock Exchange, while most insurance contracts have developed into a separate industry. In the United States, after the financial crisis of 2007–2009, there has been increased pressure to move derivatives to trade on exchanges. Derivatives are one of the three main categories of financial instruments, the other two being stocks (i.e., equities or shares) and debt (i.e., bonds and mortgages).[1] The oldest example of a derivative in history is thought to be a contract transaction of olives, entered into by ancient Greek philosopher Thales, and attested to by Aristotle, who made a profit in the exchange.[5] Bucket shops, outlawed a century ago, are a more recent historical example.

https://en.wikipedia.org/wiki/Derivative_(finance)

Absolutely not. I'm not a big fan of cryptocurrencies, yet. It's growing pretty fast. More and more establishments are starting to accept Bitcoin as a form of payment.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns.
So, Bitcoin is legal. The problem is, cryptocurrencies are still in it's early stages and will take some time for it to develop until it's widely accepted by the masses as an alternative form of payment.

I don't know how you can call it a ponzi scheme, or a financial pyramid. And I think most here would agree with me.