Is Bitcoin a financial pyramid?

Bitcoin - the first cryptocurrency was created in 2009 to this day raises a lot of controversy and the fact that there is no financial supervision over it does not help it gain the trust of the majority of society. At the same time, a lot of people wonder if Bitcoin is a pyramid scheme? Is Bitcoin a Scam? The answer to the question that is very often asked by people who are just starting to be interested in cryptocurrencies and Bitcoin itself is unequivocally - no! Bitcoin is not a pyramid scheme. To understand that Bitcoin is not a pyramid scheme, you first need to know its definition.

Financial pyramid - Ponzi scheme

“The mechanism of operation of financial pyramids consists in their founders attracting as many participants as possible, who, encouraged by the promised profits, pay them money. In practice, financial services are rarely provided. The organizers usually persuade the participants of the financial pyramid to recruit more people. For this reason, financial pyramids are doomed from the start, because the system requires an avalanche of new participants, and such a possibility is limited. - source wikipedia.org

We immediately notice that the Ponzi scheme has a pyramid structure. The top character starts selling something to a certain number of people, and those people are instructed to sell that "something" to even more people, and so on. In a Ponzi scheme, the leaders or those who initiated the pyramid get huge profits, newcomers lose everything.

Bitcoin is not a pyramid scheme

Today, anyone who bought at least part of Bitcoin and became interested in blockchain technology knows that it is not a financial pyramid. The basic argument is the reason for the purchase, even if it is purely speculative, most users or investors after selling their Bitcoins do not ask buyers to sell them further, promising a fraction of profits - it is simply physically impossible. It is just a simple exchange and anyone who has already made such an exchange knows that you do it through an exchange office, cryptocurrency exchange or bitomat and in each of these cases you do not even know to whom you have sold it.

The second, but no less important issue is the cryptocurrency society. If you want to talk about cryptocurrencies, learn about the principles of operation, everyone will explain the basics of blockchain technology, the future of digital currencies and the fall of fiat money. There are a lot of meetings and events about cryptocurrencies and blockchain and no one will ask you or persuade you to buy, while offering constant profits and increasing profits for "drawing" other people into this "business". The main reason for such meetings, a large number of groups or internet forums, YouTube channels, etc. is to educate the public on blockchain technology and how not to be cheated when investing - because you can be cheated, but I will write a separate article about it. The next aspect is availability, you can buy Bitcoins on any cryptocurrency exchange, in thousands of Bitomats around the world, personally from another person or at online exchange offices. This is also the reason to deny that Bitcoin is a pyramid scheme. Pyramids are characterized by a monopoly, you can buy a product / service from scammers and only from them, and intermediaries who, consciously or not, participate in the pyramid by reprimanding other people are just walking, living marketing and a self-winding machine.

Price - in a financial pyramid, the price is imposed in advance, from the creators of the pyramid, no one else has any influence on dictating price or commercial conditions, you just have to agree to it. In the example of Bitcoin, it is exactly the opposite, Satoshi Nakamoto did not price Bitcoin, in the initial phase of development it was not possible to buy it at all, you could only mine it. With the increase in interest and Bitcoin mining machines, SOCIETY adopted the cost of the currency based on the cost of mining. In October 2009, an exchange rate of $1 = 1309 BTC was set. From the very beginning, the price of a single coin is dictated by demand - the more people want it, the more they are willing to pay for it.

Is the dollar a pyramid scheme?

However, the blame for the existence of Ponzi schemes based on the properties of Bitcoin is certainly not on his side. So far, tens of thousands of Ponzi schemes based on fiat currencies have been launched around the world. So why is no one blaming the dollar or the euro for these Ponzi schemes?

The lack of traceability and speed of transactions are features, not disadvantages. Bitcoin is superior to fiat currencies as a means of allowing greater privacy and greater transaction speed, but these are just two of its advantages.

Are you sure?

It can be said that the structure of the pyramid is still identifiable: the creator of Bitcoin, Satoshi Nakamoto, was the first and only one who started the spread of Bitcoin. After that, a very small number of people became interested in it, and as time went on, more and more people became familiar with this technology. But none of them ever asked for interest when people bought bitcoins. There was only the normal exchange rate. The "Bitcoin Pyramid" is only advertising, i.e. the dissemination of knowledge.

However, we still hear about many scams using cryptocurrencies and Bitcoin, but it is the people who are dishonest, not the cryptocurrency itself. Bitcoin, like any other technology or currency, can be used honestly or dishonestly, and Bitcoin itself is not responsible for human actions. Dynamite can also be used for a terrorist attack or in mines, but it is not withdrawn from circulation due to its usefulness - this is also the case with cryptocurrencies.

No, but many companies create pyramid schemes using BTC as they do with any existing currency.

Bitcoin itself is not a pyramid scheme, however, many platforms create pyramid schemes based on Bitcoin, which are simply a SCAM in the world. Since Bitcoin became popular and the so-called "street" began to find out about it, more and more scammers are trying to take advantage of this situation. They create platforms or programs that offer quick money, which turns out to be a scam after time.

Bitcoin is not a pyramid scheme, but it can be used to create one. Bitcoin has several utilities.

No bitcoin is not a pyramid scheme. It may seem so to people who have lost the middle due to their own stupidity. Bitcoin is a cryptocurrency that has several different functions. Thanks to it, users can make peer-to-peer transactions. It allows you to move funds from one wallet to another without intermediaries such as banks or financial institutions with low transaction fees.

Bitcoin, like gold, is viewed by some investors as a store of value or alternative asset. Many people diversify their investment portfolio in order to keep as little money as possible in inflationary fiat currency.

Others point to the speculative nature of Bitcoin. Bitcoin is a very volatile asset. Its fluctuations are frequent and strong, which is why investors try to make money from price increases. However, some movements are unpredictable, people who do not take into account the high investment risk often lose their savings by making hasty and ill-considered decisions.

Of course, there are also scams based on bitcoin, which are pyramid schemes. You just have to be reasonable and let yourself be tempted by a quick, big profit. If someone offers you big profits in a short period of time, take a look at such a program and read the opinions on the Internet.

It is definitely not a financial pyramid, and one of the coolest things that speak for it is its transparency. In financial pyramids you know how much you pay, but you can't check other people. And here in the blockchain you can check other people's deposits and withdrawals.