There has been a debate in the recent weeks between bitcoin supporters and Bitcoin Cash supporters. Debate is fine and healthy, but one claim that is being tossed around is absolutely terrible. A number of people—specifically Bitcoin Cash supporters—are calling bitcoin a Ponzi scheme.
This is an inexcusable mistake. Some people think that bitcoin is a poor investment. Some people think that bitcoin may be headed towards bubble territory (or is already there). Some people think that the code has flaws. Those are all subjective opinions and each one can be debated. But it is flat out objectively incorrect to call bitcoin a Ponzi scheme. It’s wrong to even say it’s like a Ponzi scheme.
Assuming that the people who say that bitcoin is a Ponzi scheme are not simply lying, to make this claim is to show ignorance of what a Ponzi scheme is and/or what bitcoin is. So in this episode, Slappy and I explain what a Ponzi scheme is (since apparently it needs to be explained) and then explain why bitcoin cannot be a Ponzi scheme. We then discuss the question of whether bitcoin is a bubble.
We’re not trying to convince anyone to use bitcoin over Bitcoin Cash or vice versa here. We’re just asking that if you make a claim, you should first understand the basics of what you’re saying.
Links
Craig Wright says bitcoin is a Ponzi scheme
Bitcoin is a bubble, no plans to short-sell: Japan Post Bank CIO
Investopedia: Ponzi scheme
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Podcast version