Myth #1: Bitcoin Is A Ponzi Scheme

Since its inception, Bitcoin has very often been accused of being a Ponzi Scheme by its critics. On the last day of the year 2019, Tendayi Kapfidze, the chief economist at America’s largest online lending marketplace LendingTree, wanted to make a name for himself by declaring:

“I am convinced that Bitcoin is nothing more than a pyramid scheme. You only make money based on people who enter after you.”

This attack is nothing new, as it frequently occurs when economists or politicians wish to criticize Bitcoin and find no real argument against it.

In order to put an end to this myth now, I suggest you refer to the detailed report on Ponzi Schemes published in 2014 by the World Bank.

This report was written by the highly respected Kaushik Basu, former Chief Economist of the World Bank but also Professor of Economics at Cornell University.

In his report, Kaushik Basu says in particular:

“Contrary to a widely-held opinion, Bitcoin is not a deliberate Ponzi. And there is little to learn by treating it as such. The main value of Bitcoin may, in retrospect, turn out to be the lessons it offers to central banks on the prospects of electronic currency, and on how to enhance efficiency and cut transactions cost.” — Kaushik Basu

I think there’s nothing more to add. Just read what Kaushik Basu says in his report, and even more so what he demonstrates.

The people who continue to think that Bitcoin is a Ponzi Scheme in 2020 are clearly misinformed people with whom you should not waste your time.