industry:
If you want the whole world to know that you know nothing about Bitcoin, the best way is to use the metaphor of " tulip bubble ", and the second is to say that Bitcoin is a A "Ponzi scheme".
Today, let’s talk about why Bitcoin is not a “Ponzi scheme”.
01
What is a "Ponzi scheme"?
"Ponzi scheme", as the name suggests, is a scam invented by a person named "Pang". The protagonist's name is Charles Ponzi (Charles Ponzi), who was born in Italy and immigrated to the United States in 1903.
In 1919, he designed an "investment plan." He claimed that this "investment plan" could achieve a return of up to 40% within 90 days. Moreover, he also gave evidence that "seeing is believing": the first batch of "investors" in this "investment plan" did get the promised returns within the specified time.
As a result, a large number of Americans began to follow suit.
In August 1920, Charles Ponzi went bankrupt. The reason is very simple. This "investment plan" was a scam from the beginning. There was no investment at all. It just used the money invested by subsequent participants to pay for the money invested by previous participants, resulting in " investment return rate is very high" Illusion. Because the promised rate of return was too high, the newly absorbed funds were not enough to cover the funds that early participants needed to redeem.
Since then, "Ponzi scheme" has become a proper term, specifically referring to those schemes that promise high returns, but actually use the money invested by new participants to pay interest and short-term returns to early participants to create the illusion of making money, thereby deceiving more people. Participate in the scam.
Therefore, we can summarize the three characteristics of a "Ponzi scheme": there is a central figure or institution to operate; it promises high returns; and it uses the money invested by new participants to pay interest and short-term returns to early participants.
02
Why is Bitcoin not a "Ponzi scheme"?
Next, let’s take a look at the three characteristics of whether Bitcoin has a “Ponzi scheme”.
First of all, "there is a central person or institution to operate from."
We all know that Satoshi Nakamoto invented Bitcoin in 2008 and retired two years later. Since then, Bitcoin has been maintained by a group of top programmers from all over the world, known as "Bitcoin Core Developers".
Looking at it this way, it seems that Bitcoin has a "central institution", but this is not the case. The main job of these core developers is to maintain the Bitcoin code and how to improve the Bitcoin system, not to fool ordinary people into buying and investing in Bitcoin.
The second point is "promise of high returns".
In the Bitcoin white paper released by Satoshi Nakamoto in 2008, there was no word "promising high returns", and Satoshi Nakamoto did not publicly declare that investing in Bitcoin could bring huge returns.
Bitcoin itself is open source, so anyone can view and contribute to the Bitcoin code. All Bitcoin transaction records are stored in the Bitcoin network and can be viewed by anyone in the world.
If there really was a "promise of high returns", no programmer would have exchanged 10,000 Bitcoins for 2 pizzas worth US$25 in 2010 (these 10,000 Bitcoins are now equivalent to 1.36 billion yuan, the highest worth RMB 4.6 billion at the time).
The last point is, "Use the money invested by new participants to pay interest and short-term returns to early participants."
Since there is no "central institution" in Bitcoin and there is no "promise of high returns", it is impossible to "use the money invested by new participants to pay interest and short-term returns to early participants".
You may say, right? Buying at a price of 44,000 yesterday and selling at a price of 45,000 today is using the money invested by new participants (those who bought 45,000 today) to pay interest and short-term returns to early participants (44,000 yesterday) 45,000 people who bought and sold today). What's wrong with
?
As we all know, buying and selling Bitcoin is an individual’s freedom.One is willing to buy and the other is willing to sell. There is no forced buying and selling behavior, and there is no induction of new people to participate, so it cannot be called "using new participants' money to pay interest and short-term returns to early participants."
Besides, the price of Bitcoin does not keep rising, but fluctuates violently. No one can guarantee that after buying it, it will be sold to the next investor at a higher price. In the circle, the number of Bitcoin speculators who have lost money or even gone bankrupt far exceeds the number of investors who have made profits and achieved financial freedom.
03
Conclusion
After reading today’s article, if someone tells you that “Bitcoin is a Ponzi scheme” in the future, do you know how to respond?
Yes, ask him directly: Does Bitcoin "have a central person or institution to operate", does it "promise high returns", and does it "use new participants' money to pay interest and short-term returns to early participants"?
『Statement: This article is the independent opinion of the author and does not represent the position of vernacular blockchain. This content is only for popular science learning and communication among crypto enthusiasts. It does not constitute investment opinions or suggestions. Please treat it rationally, establish correct concepts, and improve risk awareness. . The copyright and final interpretation rights of the article belong to Vernacular Blockchain. 』
