Topic: Isn't Fiat the Real Ponzi (Read 574 times)

I also have thoughts like you. Historically, haven't the global elite and their bankers created Ponzi schemes, where fiat, which is essentially just numbers, is used as a means to employ people around the world to enrich them (a small group).

Yes, even though we all need fiat because it has become a legal instrument in a country, the more I understand that this can be said to be a real Ponzi. That's why now we have to switch to bitcoin which has been proven to be the currency of the future, especially as it can be a way to prevent inflation.

I never said that Fiat currency is a Ponzi scheme. Brother I would blame people for using it as a mean to do Ponzi schemes. I agree with you that currency has been used for decades if not centuries for a mean of transaction and exchange for goods. But recently people are using it for their own advantage and making it bad. Everything that could be exchanged for goods could be used for Ponzi schemes.

It's not the things that people are using for Ponzi schemes are bad rather it is the people who are using it for bad purposes and make it bad. You cannot just replace traditional things that have been used for centuries. Instead, when to find alternative to it in order to fix the situation. Let's not go to a war with Fiat and Bitcoin. We need to learn to use both of them simultaneously so that they both can coexist.

Do really know what a ponzi scheme is(and how a ponzi scheme operates)?
Fiat is not a ponzi scheme. Fiat currencies are a legal tender with a decreasing value. The value is decreasing simply because the governments can't take financial responsibility and completely balance their budgets. It's easier to earn less and spend more. It's also easier to get into more and more debt, which is supposed to be paid by the future generations. The central banks are simply buying all this debt(in the form of government/treasury bonds) by printing more money. Those newly printed money aren't backed by more products(or assets), therefore the overall value of the money goes down(bigger money supply growth and less product supply growth).
The actual ponzi schemes are the national debts, created by the governments. This is basically borrowing money from the future generations in order to artificially maintain the high living standard of the current generation.

I think you may need to know the difference between the fiat money and the Ponzi scheme. The fiat currency is governed by the government while the Ponzi scheme was by hackers or fraudulent type people. You can not compare fait money with the Ponzi scheme. People sometimes time confused and call it a Ponzi scheme and I think this is because of inflation. In inflation the government prints more currency and the price of goods increases as a result people need more money to buy something. And some people get lost in this, those who save money, and those who have large assets are getting lost in all this situation. With the fiat currency, you can locally do anything purchasing or selling but in a Ponzi scheme you can not do so, so don't be confused about it.

In any event that befalls and involves Bitcoin, it is indeed illogical to blame Bitcoin completely or completely. Because this arises through the actions of the fraudsters themselves to carry out this action, even though it can also make Bitcoin's image bad in the view of a small number of people who just like Bitcoin. Even though Bitcoin is now worthy enough to be called digital gold due to several factors that have been seen in Bitcoin so there is no reason whatsoever to blame Bitcoin for anything that has happened.

As for economic inflation, it is quite clear that it will involve fiat as a whole because the disruption is so clearly felt by fiat users that it will not disturb Bitcoin as much. Although economic factors can also have a bad effect on people who want to use their money to buy Bitcoin in conditions of inflation, because when inflation occurs everyone thinks more about how to fight difficulties by trying to remove inflation from their own lives.

Yes fiat can not be associated with ponzi, because it is a means of payment for ponzi and any other item or services anywhere in the world. You can not put blame on fiat currency for Inflation, devaluation or mismanagement in any economy, because as I said earlier it is just a means to to exchange goods and services. Blames for any negatives that affects any fiat currency is as a result of other factors that determines it's value, and these factors can be by minting of excessive new currency into an economy that is stagnant, and the excess money released will devalue it's worth, where excess money will be chasing few commodities. Another is when a country so much dependant on other countries for imports of it's goods and services, it's currency will be devaluing while enriching the currency of the exporting country.

I also agree with you that fiat is better invested than holding it in a bank account, where it is not adding any value to the economy. If a lot of money is hoarded and doesn't circulate, it causes artificial scarcity that will cause the prices of goods and services to increase. So in all you can not blame fiat for any inflation in a country.

Indeed, many people still depend and use fiat on a daily basis but it is difficult to understand why they call it ponzi or trash. That means they are using garbage and are participating in ponzi even if they already know about it. Furthermore, why don't we make our own judgments, why should we believe what Elon or anyone else says. Is what Elon said completely true?

People who have used fiat for centuries began to criticize and slander fiat when bitcoin was born. I fear that one day, these people will also speak ill of bitcoin if the world invents something newer and more perfect than bitcoin.

You might be right thou. Economic inflation made Fiat to become scam instead of bitcoin. Although the tag given to Bitcoin as scam is not Bitcoin fault, but due to high level of online fruad with the friquent use of bitcoin as an alternative to cash out. The intemedation received by Bitcoin is never a threat to it growth. And this has given me an insight to aquare it. Bitcoin is the new digital gold with a great store of value.

Point with the gold is a good one, government can and will take actions to secure the nation in their eyes.   Gold at that time of the compulsory order was exact money and yet everyone had to give it up.  The same can occur with a forced pension buy in scheme for government failed treasury market imo.   It seems very harsh and over the top but comparatively vs the extremes of a failed nation and by implication the failure of US forces and even NATO strength the implications are massive.

Price of things are determined by demand and supply. People were able to buy more thing with less money back in the past which is not possible right now. We are paying more to get less. But that's how it works. There are more mouths to feed but fewer hands to make those foods. No wonder price will go up. There are also other things such as inflation that could decrease the value of money.

Fiat money has been around us for a long time. We have always paid with Fiat to get whatever we need. We are not losing but we are getting something in exchange. The amount we get can become less with time. But that doesn't make Fiat a Ponzi scheme. Imagine using Bitcoin to buy something with the same price as Fiat.

I am not on the side of Fiat but it is wrong to say that it is a Ponzi scheme. We can control the inflation if we take the right approach and follow right strategy. But the government is not willing to do that because they want to manipulate people. The government is the real culprit here and they are using Fiat to execute Ponzi scheme. Neither Fiat nor Bitcoin is a medium of Ponzi scheme, rather people are using them for bad thing and for this reason people assume that they are part of it.

Talking about 100 years you dont mention this:

In 1933 people in the United states of America were forced to sell their gold at fixed rate of $20.67 per ounce of pure gold.
In 1944 the  Bretton Woods system is implemented between 44 countries


In 1971 Nixon replaced the Bretton Woods system for the current FIAT system...

If you don't see any scam there there I am done talking with you.

The point with the countries with high inflation that i mention before is that it can happen to any country.

If you think fiat is a Ponzi, try to avoid it, don't use fiat in everyday life to buy anything. Use options that you think do not fall into the fiat category. So, if you have success with other methods, let me know. On the other hand, if you don't really understand how fiat still has a role in meeting life's needs. Don't be fooled by the talk of successful people like Elon Musk because he already has everything, therefore adjust it to your situation and don't use Elon's thoughts too much as the basis of your life because you won't be able to.

So what about USD? It is also currency and has been the world currency for over 100 years. What is happening in Venezuela, Zimbabwe or Argentina is because governments are corrupt, corrupt, and do not think about their people. But not all governments are like that.

You are still living under their management, without them, where would you get a job, where would you get daily consumer products, or your safety...Governments aren't perfect, but without them you wouldn't be able to survive. Bitcoin is just a financial game, it will bring profit to some people but will also take money from some people, money from one person to another. Nothing is perfect in this world, man.

I am trying to do that, i am exchanging almost all my fiat for bitcoin. I can't do it 100%, but i am trying.

Fiat still have value because most people still believe that their money will have value tomorrow.. but ask about that to some people in Venezuela Zimbabwe, or Argentina to see if they still have faith in their local currency.

Government scam people with inflation, they steal the value of the people's money. if that is not an scam then i don't know what it is.

This doesn't sound right to me; Fiat money is not a ponzi scheme because it resembles the economic output of a country. The government ensures the strength of their Fiat currency by the potential tax income they can generate in a country. As long as a country has natural resources to sell, or advanced products to export there is a strong value in the currency. It sounds a bit like you are confusing the high inflation we face at the moment with a ponzi scheme. It's not like everybody is losing at the moment, people with a well-paying job that got a decent raise to offset the inflation are happy and look forward to their Christmas bonus. A ponzi scheme would mean that the Fiat currency is worthless eventually because too many people got promised things that weren't true, but I don't see this happening in the big Fiat currencies like Euro or the Dollar.

What you said is true. In those early years you mentioned, even if we say that many bad scammers took advantage of the ignorance of the majority who entered the crypto space, it cannot be denied that the name bitcoin quickly became resounding or noisy because of the Ponzi schemes used here.

Apparently the Ponzi scheme has added to the average popularity of Bitcoin, though it is known for its poor technique. So many people did not have a good impression of Bitcoin either. Its bad image was only reduced when they saw the value of Bitcoin rising in the market.

This is so untrue. You don't necessarily lose money with fiat. Yes, with fiat, they keep on printing new money and adding to what is already existing which then adds to the drop in value, However, Ponzi is an investment scheme and it never lasts long. It is always built on nothing but a cycle of people who eventually get unfortunate. On the other hand, fiat is issued by governments and central banks and It has value because these authorities declare it to be legal tender for conducting transactions and settling debts. Unlike Ponzi, fiat is backed by the trust and stability of the government that issues it; it doesn't rely on a continuous inflow of new investors or participants to maintain its cycle.

Bitcoin became popular during the era when we had a whole lot of Ponzi schemes in the country where I come from, (2017-2019), and as such, it is very okay if Bitcoin may have been mistaken for one of these Ponzi scheme due to the writer's lack of knowledge about what Bitcoin is, how it works and what makes it unique and different from the rest Ponzi schemes that came and ran away with people's hard earn money.
Henceforth, I don't see in any way how is fiat now a Ponzi, as it's literally not an investment scheme who robs Peter to pay Paul.

Local currencies are controlled by a single central authority and don't have any maximum supply or reserve requirements. This, of course means that local currencies carry risks but it would not be right to make an analogy with the Ponzi system. Yes, one day this system will change and perhaps fiat currency will disappear from our lives completely but in this case I still think it isn't right to compare it to a ponzi system.

On the other hand, when we think of fiat currencies it shouldn't be forgotten that although there is a possibility that they may lose value, their supply is increased to an unlimited extent because they are controlled by a single central authority. In other words, since the probability of the value of fiat currencies being equal to zero in today's conditions is very low, there doesn't seem to be a point where this system will be blocked, just like the Ponzi system.

Moreover it is not the problem of fiat but the government that fiat is inflated. Government policy affect fiat and government know the right kind of policy to implement that will boost fiat more and get it stable and not inflated but most times government shy away from those policy. Again when there is war here and there it tends to cause some negative outcome to the economy both for the individual economy and global economy because different countries have contribution to deliver in the world economy and when this begins to drop because of the war it also affect fiat. So fiat is not a Ponzi and Ponzi is scam.

Not the definition of a Ponzi but it is the definition of a scam.

a scam would be the master set

a ponzi scheme is a subset of it.

Whatever you country is I am sure you leaders are scamming but not via ponzi.  It is a subtle difference.

By now it has become obvious that all countries are just kicking the can down the road. making all fiat worth less with bigger inflation on the picture.

Correct. Fiat is not a Ponzi, it only reduces value due to inflation but is not a form of Ponzi scheme. The way Ponzi works is by definition completely a scam where if you are not caught holding worthless fiat when everyone realizes that fiat is just useless paper, not much different from useless paper. But so far fiat is useful for transactions within a country. Yes the way fiat works is a little bad at the moment because creating new money to pay back old debt promises sustainable economic growth. Hence the presence of bitcoin as an alternative to fiat.

People whom claim that bitcoin is a ponzi typically have absolutely NO CLUE about it and how it works.  I work in finance so bitcoin comes up a good bit in conversation.  The last few people I've spoken with about bitcoin who claimed it to be a scam had no clue either.  I simply ask this "do you know what the blockchain is?"..typically I get a "no, I don't" which I respond with "then you have no right to call bitcoin a scam/ponzi as you're not even versed on how it actually works".

Fiat money in many ways is a scam.  The fact the the central banks can print as much money as they want is a serious issue.

Bitcoin has not been accepted in the whole world so you still need fiat to exchange bitcoin before you can us e it unless you front the country that have legalized bitcoin as the legal tender. I don't think that theory of fiat being the Ponzi is correct because in Ponzi you are not getting anything in return and you lost your money like that but in fiat you exchange the money with something but in higher price.

I think the inflation is affecting everyone plus the bitcoiners since we can't use bitcoin to buy whatever we want, we must change the bitcoin to fiat first before we can buy things so for now we can't just call fiat as Ponzi. Though the capitalist (business owners) exploiting us from the Fiat Currencies and that is why they fighting bitcoin to be stopped by it is too late for them.

Fiat is not a ponzi, because it's what we have been using before bitcoin arrives, now we discovered that bitcoin is more needed than the way we all opt in for fiat after realizing all we are missing already, fiat is just a traditional currency, everyone can have access to use and there's a lot of scam and intransparencies in using it, bitcoin now is taking over and people are realizing the fact that it's only the alternative to fiat, but the central authorities wouldn't want that because of loss in power, they now have to create diversion in calling bitcoin all manners of names.

I've always want to be this cruel with Fiat currencies but we can't call them ponzis because they are really not, you can't do anything with Ponzi honestly,  or can you? Since the government is backing up the Fiat why is it Ponzi? That will just make you look stupid, because it the end of the day we really can't do without Fiat.

Even as I invested all my Fiat into Bitcoin to avoid inflation I will still need to swap some part of it back into Fiat for me to use in the real world, off online, so Fiat is really not a Ponzi it won't be working still if it's truly a Ponzi.

The only thing that's bad about Fiat is the inflation part and also the centralization power and rulers behind it, there are other Ponzi scheme that the government are using to take from the public, and it's even available in the region aspect too, but Fiat itself is a important in the world.

Fiat is a proof of protection, it is a derivative (aka a receipt, a piece of paper written and is valid proof to show that you earn/pay it, obviously it is worthless piece of paper, but backed by a trust, a trust that you are protected now!) created by the lord of the tribe, the lord of the tribe is biggest bully and rule the land with brute force, you exchange your valuable harvest to fiat to receive protection. When you are being confronted by the bully again, as long as you can reveal the fiat to the bully, they would let you go totally unharmed, but occasionally the bully would confiscate your fiat because they deemed you no longer worthy to receive protection anymore, so you have to earn your protection again by working hard for it. So you would pay for protection over and over again in your entire life, without protection you would live in fear, and your property getting invade left and right, your wife and kids getting kidnapped and held hostages, also the protection has very short expiration, it only last for few weeks at best, until the next payrolls if you don't quickly pay the protection your entire life would quickly turn to shit since you are totally unprotected and getting invaded and crops and land destroyed by tribe members of the bully, so you must keep paying the protection over and over your entire life and pray hard you would be protected until your last breath. Also the bully now decide to create nuclear bomb, if you insist and don't pay the protection you would be full of regrets! You would get nuked into dust, the bully now no longer fancy kidnapping woman and kids as hostage since it is too abundant.

What is the difference? But even if some consider it, we shouldn't deny the fact that it was still helpful and it's not bad as the real scam because you can not get anything out of them but they are only the ones who will get money out of you. Yes, fiat money is not a source of money even though it is also a money. What source of money mean is your daily job.

A business, being a trader, investor, or anything which produces you money can also be considered as that. We are now on the era where cryptocurrencies have existed and some of them are decentralized, so it is now possible for us to not rely on the government's/banks' own creation which is fiat.

Fiat only reduce in it value of purchase both you have something to quantify with what you have in fiat but Ponzi is as good as scam. With Ponzi no value is placed but anguish, fiat can be made more valuable by more investment and diversification is a sure way to help reduce the harsh effect on you. Don't rely on Ponzi because it is all a bubble waiting to burst but fiat always will have something to measure with.

A Ponzi scheme takes money from people to pay other people and it does not generate any income from that system. Fiat currencies are printed by the government, so they are not taking the money from the people to pay the people... they simply print it out of thin air.

Yes, it creates problems like hyper inflation and the general public suffer as a result of that, but you cannot call it a Ponzi scheme. The same can be said about Bitcoin, because Bitcoin are created from "code" and it does not generate any income other than the increase in the value over time.

People should properly research the working of a Ponzi scheme, before they start spreading nonsense like this. 

Seems yes, fiat looks like the Ponzi scheme we ever heard before. The dollar is the king of Ponzi scheme because they can print it like they print paper. We know, too many fiat out there don't have underlying anything. The government always backs up it and tells if the fiat money is safe for use to use forever. Sometime ago, before 1971, where the dollar still have gold as underlying, I still believe it (dollar). But, after Nixon closed the gold as undelying dollar, I never believe fiat money anymore, why we have to believe the goverment and fed?.

Your comments are valid, but fiat is not a Ponzi scheme; if it were, we would have all been labelled as scam victims for the whole period that we have used fiat currency. The government backs fiat currency, and fraudsters back a Ponzi scheme. So, what's the connection here? You'll believe me when I say they have nothing to do with each other. There are other unlawful ways that fiat is employed, but the government nevertheless defends its own from being exploited or misused and always wants it to stand out among all currencies, especially against its most formidable competitor, digital currency (bitcoin).

Argentina and Turkey have just had their currency disbarred from shop used by a little company called Valve who are international but no longer willing to run to keep up with a standard of value that is entirely compromised.    Its actually true of maybe a dozen currencies that they are potentially unable to honor all calls to repay debt but those two countries are the most obvious with inflation over 100%
  Valve is only a gaming company so it is quite ironic they would be the ones to declare this form of FIAT unpayable.   The opposite is also true that if all rules and promises are followed FIAT can be valid currency, what happens is politics devalues money in its own favor.

Your claims are correct, but I do not agree with your point that Fiat is a Ponzi. Inflation and the government monetary system are the causes of all these currency devaluations; nowadays, the money you can use to buy foodstuffs for your upkeep is equivalent to the money you will use to purchase a car or a motorcycle back then, but the government keeps printing money, which caused the devaluation because of its too much availability.
That is why I like the idea behind Bitcoin technology of having a limited supply of Bitcoin, and no one can create fake Bitcoin to defraud people, which is why Bitcoin value keeps increasing.

First, let's find out What is Ponzi? Before we ask such a question, let's also define Fiat so that we can discuss this topic here.

Ponzi is a type of fraudulent investment operation. This is the type of business where the income of the members also comes from what the new members pay; in short, the income is based on recruitment. And often in Ponzi, you will hear promises of a high return on the capital that will be put in by investors, which in this situation should be avoided immediately.

From the OP's perspective, do we need to reconsider what Ponzi is?

First, try asking yourself whether you should invest in fiat or not.Confusing concepts in finance is not the way to connect an issue, and above all, if Elon Musk says that money is sh*t then is it true? More sober than before regardless of statements from someone, and especially Elon Musk, and I think such comparisons are completely disconnected when the nature of fiat operates in connected life and convenience for transactions. More epidemic, as for manipulation or even a type of fiat of a country, it is related to other macro issues such as politics, economics, people,...

After all, we should not get attached to things that have nothing to do with each other. Even bitcoin is misunderstood because we ourselves do not really understand it or have false prejudices.

No, FIAT currency has never offered any benefits... in fact, it has suffered losses due to inflation. I can't see from where you're coming when you label FIAT as a Ponzi scheme. Is this a response to others calling Bitcoin a Ponzi scheme? If you're retaliating in this way, trust me, this isn't the right approach. A Ponzi scheme has no connection to the systems in place for FIAT and Bitcoin. It's all just FUD created by people who can't appreciate Bitcoin.

And abusing Elon's name without providing evidence of the statements he has made only makes this statement less valid. Many people are indeed influenced by what Elon says, but unless you can provide a post link from Elon stating that FIAT is a Ponzi scheme, it seems forced. This isn't valid and makes your intentions seem like an attempt to undermine FIAT with FUD as well.

I think you need to get a better understanding of what a ponzi scheme is because the allegation is a bit ridiculous. Trying the "I'm not x, you're x!" defense is pretty childish. Currency has been around since the beginning of time, so people could indirectly trade items - a baker might cook a loaf of bread but a blacksmith might not want a hundred loaves in order to build a horse harness for the mill. Elon manipulates people all the time and few people will be on the same wavelength, he is a multi billionaire and is not relating to the average person. It's in his interest, as he has done many times before, to manipulate - whether for fun or even personal gain, his hordes of blind followers.

I think governments are the ones that make money out of it because they release funds into circulation that are pegged to some other form of valuable asset like gold or dollars. Which means if they are releasing 100k PKR, which is my local currency, then it means it is backed by the same amount of gold that can be bought with 100k PKR, and when that money is given to the public or to some single individual, the amount will go up or decrease due to inflation, but due to the inflation, that gold, which they still have, will be making them money.

And if the fiat system is really manipulative, then they might buy gold or dollars after issuing the local currency, but only in a manipulative way because, literally, that's not possible.

At the end, I don't think Fiat is really a Ponzi scheme because Fiat is not something new and it has been among us from the very start, and it really made our lives easier. At first, we had to give some kind of product or service in exchange for one, but now I don't have to get a skill that can help others so others can exchange it with me. I can simply give them Fiat to make them do their work, and they can pay me to do their job.

Ponzi scheme comes with strong revenue at first then collapses after some time.

You cannot compare money and ponzi scheme basically, because money is a centralized currency within any country unlike ponzi which is a scheme or a method of getting revenue from new investors, technically a fraud. Fiat is governed, you cannot magically changes its value and ponzi is an ultimate magic of quick rich and quick burn.

If fiat is ponzi, so then the crypto which is powered by fiat as well.

According to oxford it is a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

Critically examining that definition it's doesn't present fiat as a Ponzi scheme, not the less, fiat suffers a harsh limitation on the grounds that it doesn't possess resistance against inflation. When inflation hits fiat becomes helpless concurrently losing value while price of goods and services rises.

It's unfortunate that at periods of inflation hit the government pushes the burden on the citizens by raising interest rates and taxes  stead of galvanizing better solutions that would suppress and subside the effects of inflation and in all of these the banks are not exception being a tool in the hand of the government.

Unlike that, fiat is not a ponzi scheme and only people who hate fiat would say that because they see high inflation year after year.

I know how people are now burdened by inflation while foodstuffs are always soaring high their income is not proportional to the inflation rate even though the government always provides solutions to this but never thinks about how their income was before, as a result many people cannot afford to buy basic necessities with the money they get may only be mediocre.

It is actually difficult to fight the government to tell the truth because they have regulated the continuous printing of money.

I think so. And money printing is the fuel of this ponzi scheme. Anyway, it's a kind of ponzi scheme we are forced to join, different from every other ponzi schemes that attract the attention only from greedy and naive investors. Fiat is an institutional ponzi scheme ran by governments to keep an unsustainable economy working. In order to do that, they have to sacrifice common citizens who don't even know how their economical systems work.

Fiat money is not to be seen as ponzi but as scams and fraud. They are only backed by the government and securities.  Fiat currencies are not sound source of money because of all these attributes they have.
They are after power and control as they monitor how money comes in and goes.
They can't not be snubbed for we all need fiat currencies even if people think they don't  need fiat money. Government policies and banks are the real ponzi.

Technically speaking fiat is "I have the money, and you can use this money as I see fit" by the governments. Its not that you actually have it, you have a piece of paper that says that you are allowed to use it, so its definitely a ponzi without a shred of doubt. Governments figured that out years ago, because back in the day gold was what people used for payments, and then people would get piece of paper showing how much gold they have in vaults, and over time it became not connected to gold, so right now people just use paper that is backed by nothing, and they do not actually own it neither, they just have the right to exchange it. Get gold, get bitcoin, get real estate, get something that actually worths something.

If you know how the banks and the governments work, you will start to think that they are indeed running a Ponzi scheme.

Imagine the governments creating bonds, selling it to banks, then the banks selling it to the fed reserve for a profit. This bonds is just 'promises' at best--a glorified IOU that carries no monetary weight to us mere citizens but to them, it is something. The fed reserve pays this bond through IOUs, again, and whatever the difference is, that's the money that is created out of thin air. The cycle goes on and on and on, and the burden is passed on to the tax-paying citizens. It will eventually implode, but unlike Ponzi schemes, the perpetrators don't go to jail - they get bailed out to carry on the cycle for years to come.


Here is a good short description of how this Ponzi scheme works: https://www.7thgenerationdesign.com/wp-content/uploads/2020/06/Fiat-Currency-Pyramid-Scheme-Diagram.pdf

The current monetary system is not fully transparent and is partially fraudulent. At first you have to understand what your paper bill represents. If you have a 100 INR then that means this 100 INR is backed by some assets held by the central bank that are worth that much (they can be reserve currencies, bonds, physical assets etc). Usually a country's supply should be fully backed but this doesn't happen.

Contrary banking systems use fractional reserve systems to circulate more money than they have. Suppose you have 1000 INR in your savings account in a bank The bank will use 90% of that balance of 900 INR to give loans and keep 10% as reserves. Now that the borrower who takes a 900 INR loan deposits this money into his savings account so bank gets another 900 INR from which they keep 10% as reserve and use 90% to give the loan. Now banks net worth is 1000+900 = 1900 INR when it is backed by 1000 INR. This process continues indefinitely. A partial reserve system gives banks the power to generate money from thin air and keep circulating money that they don't have. This thing seems fraudulent, but it is what it is. 

Neither fiat nor bitcoin is ponzi. People will say multiple things but that doesn't make it true. I remember back in 2014 one of the big politicians in my country claimed Bitcoin as a ponzi scheme in the parliament. Such kind of statements come from ignorance and no knowledge.

Fiat money is not ponzi either. Without Fiat how would you derive the value of a cryptocurrency? Without Fiat how would you conduct the local businesses?

As I understand it, Money is like a Knife. On the one hand, it is useful for cutting this and that (transactions within a country) but on the other hand it can kill.

Because historically, haven't the global elite and their bankers created a Ponzi scheme, where money, which is essentially just numbers, is used as a vehicle to employ people throughout the world to enrich them (a small group)?

The writer does not literally mean that fiat is a Ponzi scheme, rather he meant that fiat posseses an attribute of a Ponzi scheme which is its ability to make you lose money. Or its tendency to reward early commerce at the expense of late commers. When you look at this more carefully it is correct.

What the holders of fiat currency were able to buy 10 years ago, the holders of the same amount of fiat will not be able to buy those things now. Inflation has grown to a very large extent and to finally justify the Ponzi mantra, the government will keep printing more fiat into the system.

If it really is a ponzi and you think the government created it to scam you, you should stop using fiat and stay away from it. But if you continue to use it and still can't live without it, don't just talk bad about it.

Fiat has many disadvantages and cannot be compared to bitcoin. I know you're trying to say this, but there's no denying that we're still using fiat money every day, and today we couldn't survive without it. We should stop bad-mouthing it, because it's like when you go out with someone but still talk bad about them behind their back.

Fiat has limitations and we have bitcoin to overcome those limitations, but it is still essential to us, so what we need to do is balance the two.

While we may have a preference for Bitcoin over fiat currency, it's essential to clarify that neither of them is a Ponzi scheme. To address this question, it's important to have a clear understanding of what a Ponzi scheme is.

So here's the definition fromwebster.com/dictionary.


Fiat isn't an investment, bitcoin is an alternative currency and could be an investment but it's not a "investment swindle " so the answer for your question is no.

Ponzi schemes are usually synonymous with unpredictable returns and the general system is multi-level marketing. In this system there will be victims, namely new members. And the one who benefits the most is the owner or the person at the highest level. Meanwhile, Satoshi has never cashed out his Bitcoin and it is still stored in his wallet, but he doesn't know whether Satoshi still has his wallet's password or not. Finally Satoshi lost control of his email.

Fiat can never be Ponzi, you can say that it is been dealt with by inflation and this is because of the Government's poor policies, if not for the economic woes that have befallen many nations, we can do without fiat, for us to purchase anything in our locality we need fiat do such, to an extent fiat has its advantage and we can do without it, a Ponzi is a scam but fiat unless you are taking in terms of printing if fake currency by individuals, the Government is exempted in this act, you can also say that fiat is regulated and this is because it is in control of the Government and its institutions, you have to consider so many features of money before you can pronounce it to be a Ponzi, money being a Ponzi is no for me.

Fiat on itself is not a Ponzi scheme some economies of certain countries are Ponzi schemes though.
The best match is the United States economy that has been a Ponzi scheme for some years now. They keep printing money out of thin air and sell it to any idiot (including countries) who would buy that debt so that they can cover their ever increasing expenses and cover the massive budget deficits. Then because of interest rates they get themselves deeper into debt so they print more money to pay that debt too hence turning the whole thing into a Ponzi scheme.

This is exactly why the biggest fear that US regime has is dedollarisation!

I disagree. Fiat is not ponzi if it holds real value and is able to buy you things with it. Fiat is being run by the government and on top of that we understand how it works. Everything is valued in denominations of fiat as per the countries, you work to earn, you then circulate it in the market as an exchange value and you get products-services in return. The perfect product and services are valued just about right as per that year's economic conditions in the market. Let us not get into inflation and deflation in this conversion but it is evident that fiat survives the worst and those who hold it the most are always securing their lifestyle.

If you even look at the history of mankind then there were different ways of exchanging things. From stones to vegetables, from stone-carved coins to gold coins, and other merchandise mankind has seen everything. Today we are in modern economics, we have high-value fiat notes and coins with the security of reserve banks. There is also more authentication as compared to what our older mankind had. There are hundreds of things to think about before we can call this as ponzi.

I have heard and read before that some people suggest the whole Fiat system is nothing but a huge Ponzi scheme, but I generally tend to disagree with such comparison.
If there is something within the FIAT instruments in the ecosystem of the financial instruments in USA is the treasury bonds and the debt acquired by the United States, which seemingly can only be paid with the money of new investors and the approval of the congress to print more money or acquire even more debt to pay old investors.
It sounds like a Ponzi, but there are several differences: the Federal Reserve will never run out of money and the government of USA could eventually close the gab of their spending deficit, so they can slowly start paying their investors fully what they are owned.

a ponzi scheme is built on promises with no strong revenue,, but fiat money are regulated by banks with actual revenue like investments and projects in short banks always have a way to pay current holders even with no new deposits that is just not the same with a ponzi scheme that will collapse once there is no new investors

Fiat doesn’t promise any fixed potential return to its holder but rather a constant decrease of buying power due to inflation. Fiat is worst than ponzi since they have negative valuation in the long term while printing unlimited worthless of paper money put of thin air.

I believe you use the wrong description since Ponzi is way different than fiat even though it has a really negative feature. Ponzi is an investment scheme while fiat is just a plain currency.

Money itself cannot be a Ponzi scheme because it does not generate a return. Bitcoin is money. It does not generate a return so it can't be a Ponzi scheme.

Ponzi is not the right word to apply to fiat, indeed fiat will always experience a decrease in value but that is because of inflation and we will not be able to fight inflation by saving as much fiat as possible because no matter how much money you have in the next year or in other future years its value will keeps going down, so that you don't get stressed and end up saying that fiat is a Ponzi, then start by investing in the type of investment that can give you a better life in the future even though inflation continues to rise in your country.

I guess when you really hate the financial system, you just have to plaster in that it's a Ponzi scheme without a care about the very definition of that so you can generate reactions from other who don't like to think too much and just sympathize that fiat is bad and central banks are just an evil organization (which I agree they are but that's not the point). Maybe next time, try to direct the hate in a way that it's informative and not just a senseless rant about why the government and the current is oppressing the people, no one listens to the crazy homeless guy, make your statements presentable OP.
I don't have all the info on this and it's just a conjecture but I believe the reason why Madoff has got away from the sniffing of forensic accountants is probably the fact that he's a reputable and influential investor in the Wallstreet and if there's someone snooping then he can just use his connections to stop the snooping or even discredit the investigations but it seems these didn't last long, after all that investment scheme like any Ponzi out there, is a house of cards.

The blogs that call bitcoin a ponzi scheme simply don't know the difference between bitcoin and altcoins. It is common to see different altcoins been presented to the public as a scheme to that brings instant and high returns on investment.

A Ponzi scheme is an investment that is built to deceive investors. My country's fiat currency could be said to be a legalized Ponzi scheme because politicians will always make promises of how they will make the currency stronger and more valuable. One politician in my country promised to make our local currency to be equal to the USD. Many people believed him and kept their investments in the local currency. Today the currency has lost almost half of its value and the money is gradually becoming worthless.

Fiat is a scam but it’s not considered a ponzi. Ponzi is what Madoff did and it’s where he took the money from his newest investors to pay off the oldest investors which were cashing out.

The fact that he got away with this for years is what’s crazy. You would think some accountant would find something off sooner than later.

Eventually when too many people tried to withdraw at once it’s when the ponzi crumbled and he was exposed.

Everything is an individual perspective and what Elon said is a criticism of inflation or the conventional financial system where the value of fiat also fluctuates due to inflation. Inflation itself is an economic phenomenon that is different from a Ponzi scheme, especially now and this looks like a Ponzi scheme.

So, what must be noted for BTC is that there is no element of fraud. If the Bitcoin exchange rate fluctuates wildly, that is normal cause it is traded on the open market, and its price is influenced by supply and demand.

Fiat isn't ponzi, unless there's someone is offering send $5 and get $10 after a day, is there any banks or government use that kind promotion? nope.

But fiat is scam because the banks and government are convincing people to use save their money in banks where the inflation rate is higher than the interest rate. Theoretically if you save your money in banks, you're not make your safe (due to centralization) and you're not earn more money (inflation > interest).

Is Bitcoin a Ponzi scheme?

It is not if you read the definition of Ponzi.

Ponzi scheme (wikimedia)
To do this, Ponzi operators have make promises to their potential victims that by investing money into their scheme, investors will get profit that usually is high enough to be attractive. To get money paying for first investors, it is easy but any Ponzi scheme has to rely on flow of money, inflow and outflow. If inflow is bigger than outflow, newcomers keep coming and spending money, the scheme will continue to work smoothly and operators can pay for late comers.

Unfortunately, all Ponzi schemes will end with inflow break by that outflow will become bigger than inflow and the scheme will come to a point of collapse. The whole Ponzi system will collapse quickly at that time.

There is no promised from anyone that you will get 10%, 20%, 50% APY with BTC, nobody pay you in any scheme so Bitcoin basically is not a Ponzi scheme but you must aware that some scammers will create their Ponzi schemes and add Bitcoin as one of their used assets for scam.

Be definition it is not and can not be a ponzi.  But in reality if a country gets in a hyperinflation cycle it looks like fiat was a ponzi for that country.

I think of fiat as fuel for the military industrial complex.

I am 66 and I can remember 30 plus wars since I was a kid.

Nicholas Cage’s movie “the lords of war” shows the relationship of fiat and weapons.

Fiat is not Ponzi; Ponzi is something that cannot work for a long time; it's something that doesn't last longer than the pioneers have speculated. Fiat was never like this in the past; the devaluation of Fiat was not as crazy as it is now, and the volume of printed money was not like it is then. So, because of the situation with Fiat now, we cannot still call it Ponzi. We are living in a world where you can exercise your freedom of choice. If you love Bitcoin, acquire it; if you love Fiat, acquire and save; if you like both, keep it, so long as it doesn't cause problems for you. That's what I think.

Some countries don't allow the free use and adoption of Bitcoin, and if you find yourself in such a country but you want to invest in Bitcoin and you have means of doing so, as long as it won't cause you trouble, then go ahead. Some people also see Bitcoin as a Ponzi, but that doesn't mean that's what it is.

Elon Musk brainfarts a lot of stupid things. Fiat currency system has no characteristics of a Ponzi scheme. Early holders of fiat don't benefit from being early, in fact they lost the most. Someone who decided to put $1M into cash 50 years ago is a lot more today than if they put it into real estate or gold or nearly any other asset.

The previous generations didn't benefit from fiat, they benefited from technological progress, post-WW2 rebuilding, urbanization and other things. Nowadays the living space is becoming more saturated, maybe even hitting its limits, and the previous economic growth rates of the boom period can't be repeated.

   Some people will believe what you say, and some will not. That means a long, debatable matter. Maybe Fiat really has similarities with Ponzi in other things, but in reality, it's not really. And we also know that Fiat is made through the central bank, where it can lead to inflation.

  Ponzi is not that much like Fiat. In addition to this, Ponzi is not used by people to pay for the products or items they want to get; instead, fiat is used in situations like this. So if there are people who believe that Ponzi is also Fiat, it still remains an opinion or speculation.

In my opinion, the fiat money system is not a Ponzi scheme. I think if you have different views or don't agree with the fiat money system, that's fine but it's too much to think that fiat money is a Ponzi scheme. However fiat money has a big role in human life and trade, if there was no fiat money then maybe we would still use gold and silver to trade and that is quite difficult to do, especially if we buy goods in large quantities then we need to carry a lot of gold , and it will be more troublesome than putting fiat money in the wallet

It cannot be said that it is Ponzi because it was a revolutionary idea when it was created. Today the facts has changed and the solutions of the past are no longer valid for nowadays problems/needs. Fiat money could be used safely in the days of feudalism until the beginning of the victory of capitalism, but it is no longer valid today. this is what i think.
Today we need to re-establish a new financial system that responds to the requirements of the times. Fiat money has been making successive failures since the late 18th century, and in fact we need to reconsider the entire global financial system, not just fiat money.
In this context, various experiments appear, including Bitcoin.

First I believe we must know what ponzi scheme is and it said:
source: https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme#

According to the article the following list are the signs that the investment is more likely a Ponzi scheme:

1. High returns with little or no risk
2. Overly consistent returns
3. Unregistered investments
4. Unlicensed sellers
5. Secretive, complex strategies
6. Issues with paperwork
7. Difficulty receiving payments



So from the definition, fiat is far from being a Ponzi scheme, Bitcoin is more likely nearer to the explanation but we all know that Bitcoin is not a Ponzi scheme.  The reason for this is that Bitcoin is in the open market free from any centralized authority that can control the trend of the Bitcoin price.

The system is rigged to favor people who have positioned themselves properly to be the people that majority of other people at the bottom of the pyramid lose money to. Anyone who the system is currently not favoring should try to change the position they occupying in the pyramid to a better one so that they are not at the bottom of the chain and do not get to fell the effect of the economy the most.

The Ponzi scheme is just a tool to use in Fiat. The same goes with Bitcoin or crypto. And the people who use the Ponzi scheme are the people who have bad intentions to cheat and get a large amount of money from the investors who will be victimized. There is no Ponzi scheme that only takes a small amount from investors.

And another thing is that the inflation rate also has nothing to do with the Ponzi scheme, because inflation is always there and always faced by all countries around the world. The Ponzi scheme will appear suddenly when a scammer is ready to prey on investors.

Inflation does not make something a Ponzi scheme. Bitcoin is wrongly labeled a Ponzi or a pyramid scheme a lot of the times, I will not want to throw the same assertions at fiat when that is inaccurate.

Fiat is a system that was created to solve the problem of exchanging value but has progressively gotten worse over the past 50 or so years. The system is greatly broken now and is just being held together by government backing.

It is a legal ponzi   

All the bankers are the top of the piramire and all outside of it are paying with inflation.

In as much as I don’t like the things surrounding the use of fiat currency, it is never a Ponzi scheme because Ponzi scheme is something you invest in with high hopes of getting lots of profits off it, but at the end nothing to show for it. The thing is fiat is a currency to be use for transactions and not to be hodl on to as an investment asset because of deflationary effects of it. Treat it as a currency that it’s suited for and look for better asset to use as investment tool and you wouldn’t address fiat as a Ponzi scheme

Without a local currency, you can not be able to run a business in a country. But you can not run a business with a ponzi scheme as it will later collapse.

Fiat is backed by the government. Ponzi scheme is not back by anything but it may remain hidden until it collapses.

You can do a business with fiat but fiat become like a scam if you hold it. Why would you hold fiat when their are assets that you can go for.

You know everything about fiat and that makes it not a scam.

I've seen many blog posts describing bitcoin as a ponzi scheme, but looking at the current inflation of fiat it now looks like a Ponzi. Don't know who is the beneficiary in this kind of fiat Ponzi. The earlier generation had enough to buy with few amounts that can't buy anything reasonable today. I also saw Elon in a tweet saying or calling fiat a Ponzi scheme. People suffer to get fiat and lose it on high food prices and products. In a Ponzi, everyone end up losing money, same with fiat. A good number of people around me complain of not being able to purchase product with a fair sum of money they feel is big.