Bitcoin Core (BTC): A Pyramid Scheme? A Ponzi scheme? Multi-Level Marketing?
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
Pyramid schemes have existed for at least a century in different guises. The difference between a pyramid scheme and multi-level marketing is that multi-level marketing provides an actual product or service whereas pyramid schemes do not and only funnel the money up from recruitment costs.
While often confused for each other, pyramid schemes and Ponzi schemes are different from each other. They are related in the sense that both pyramid and Ponzi schemes are forms of financial fraud. However, pyramid schemes are based on network marketing, where each part of the pyramid takes a piece of the pie / benefits, forwarding the money to the top of the pyramid. They fail simply because there are not sufficient people.
Ponzi schemes, on the other hand, are based on the principle of "Robbing Peter to pay Paul"—early investors are paid their returns through the proceeds of investments by later investors. In other words, one central person (or entity) in the middle taking money from one person, keeping part of it and giving the rest to others who had invested in the scheme earlier.
[uncensored-r/Bitcoin] Debunking the myth that Bitcoin is a pyramid / Ponzi scheme
The following post by themetalfriend is being replicated because some comments within the post(but not the post itself) have been silently removed. The original post can be found(in censored form) at this link: np.reddit.com/ Bitcoin/comments/7mlx22 The original post's content was as follows:
04-05 19:13 - '**Is bitcoin a decentralized pyramid/ponzi scheme?** / This is *not* FUD. I am genuinely interested. From what I can see, some people got rich, but not because goods and services of value were being created somewhere (as wou...' by /u/MrManHimself removed from /r/Bitcoin within 0-8min
''' Is bitcoin a decentralized pyramid/ponzi scheme? This is not FUD. I am genuinely interested. From what I can see, some people got rich, but not because goods and services of value were being created somewhere (as would be the case with stocks in a real company). People got rich because others hoping to get rich rushed in and pushed up the price. So it has basically been money flowing from the many to the few. And now there is little new money coming in, whence the daily panics here over prices. What do people think of the situation? ''' Context Link Go1dfish undelete link unreddit undelete link Author: MrManHimself
12-22 17:12 - 'Bitcoin is a pyramid scam, ponzi scheme, Winklevoss, Chamath Palihapitiya, Satoshi Nakamoto probably desperately trying to sell off bogus BTC into real $USD before the total final crash' (en.wikipedia.org) by /u/Charbax removed from /r/Bitcoin within 2-12min
If you still think bitcoin is a pyramid or ponzi scheme simply because of the huge price moves, this analogy may help you understand.
The U.S. dollar is similar to Berkshire Hathaway stock (BRK.A (NYSE)) huge market cap, huge liquidity, percentage moves are minor. Bitcoin is similar to a penny stock traded on pink sheets. Low market cap, low liquidity, percentage moves are huge. But to take the analogy even further, we all know what happened to the share price of blockbuster as netflix rose to mainstream popularity.
11-24 05:32 - 'If something only has value if new people keep buying it in the hope it will keep going up in value, isn't that by definition a pyramid/ponzi scheme?' (self.Bitcoin) by /u/sgasgdsgbdsg removed from /r/Bitcoin within 42-52min
The bitcoin Ponzi scam that won't go away New tech, old MLM techniques. Benjamin Plackett, @BenjPlackett. May 23, 2019 50 Shares. Share. Tweet. Share. Sponsored Links. This article was produced in ... A pyramid scheme is a business model that allows a certain company to stay afloat by recruiting more members who are fed with false promises of sky-high returns. However, only early participants are able to make money with such frauds. As reported by U.Today, Euro Pacific Capital CEO Peter Schiff called Bitcoin "a Ponzi" that was running out ... Ponzi schemes and Pyramid schemes that are designed to fraud people are what cause heartache to many unassuming investors. Luring people into such frauds has been much easier in crypto as the concept of digital currencies and technology is still in its early stages and very few have the knowledge of how it all works. According to Chainalysis, Ponzi Schemes account for 92% of all scams in ... Bitcoin Max Chart. Crypto hardliners point to an environment that has evolved favorably since digital currencies hit the mainstream. Since Bitcoin’s parabolic rise in early 2017, we’ve seen ... Bitcoin is not a ponzi or pyramid scheme. In summary, bitcoin fails to meet the requirements for being classified as a ponzi or a pyramid scheme. There are no promises made on the technology that can’t be transparently verified or understood, nor any reward incentives directly available for recruiting others to join. It’s operational structure, value proposition and process to evolve and ...
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