[Sumpter]

Jan 11, 2021

The narrow Ponzi scheme definition clearly doesn’t apply to Bitcoin, some folks have used a broader definition of a Ponzi scheme to assert that Bitcoin is one.

A Bitcoin is like a commodity in that it’s a scarce digital “object” that provides no cash flow but does have utility. They are limited to 21 million divisible units, of which over 18.5 million have already been mined according to the preprogrammed schedule. Every four years, the number of new Bitcoins generated per ten minute block will be cut in half, and the total number of Bitcoins in existence will asymptotically move towards 21 million.

Like any commodity, it produces no cash flows or dividends and is only worth what someone else will pay you for or trade you for. And specifically, it is a monetary commodity, one whose utility is entirely about storing and transmitting value. This makes gold its closest comparison.

https://www.swanbitcoin.com/investing/why-bitcoin-is-not-a-ponzi-scheme-point-by-point/

swanbitcoin.com

Why Bitcoin is Not a Ponzi Scheme: Point by Point

Lyn Alden compares and contrasts Bitcoin to systems that have Ponzi-like characteristics, to see if the claim that Bitcin is a ponzi holds up.