Does Bitcoin meet the definition of a Ponzi scheme? That is the topic of the newest Cointelegraph Crypto Duel, the place Bitcoin strategist at Kraken meets professor of pc science on the College of Campinas, Jorge Stolfi.
Just like different Bitcoin skeptics, Stolfi repeatedly outlined Bitcoin as a Ponzi scheme. The core of his argument is that Bitcoin doesn’t produce any money flows and the cash with which Bitcoin buyers are paid comes solely from new buyers shopping for Bitcoin.
“Each time you put money into Bitcoin, the cash that you simply make investments goes to the earlier buyers or to the miners and disappears”, Stolfi stated.
Responding to Stolfi’s argument, Rochard identified that Bitcoin is a peer-to-peer money system and, like different types of cash, it’s not supposed to provide a money stream.
“It is only a common property of cash as a result of it’s money. So it would not have money flows and that does not make it a Ponzi scheme.”, Rochard stated.
Rochard additionally identified that Bitcoin is completely different from Ponzi schemes in that it doesn’t assure mounted returns, and is well-known to be a extremely dangerous asset.
“Bitcoin’s promoters repeatedly emphasize that there’s a threat of loss and that if we take a look at the empirical knowledge, this threat has repeatedly been realized”, stated Rochard. “That is not how Ponzi schemes work”, he added.
Stolfi, nevertheless, is satisfied that efficient Ponzi schemes don’t promise return since that might be “a useless giveaway.” “The S.E.C. would come knocking at your door the following day”, he argued.
For example, the pc scientist talked about the infamous Madoff’s Ponzi scheme, which defrauded hundreds of buyers for $65 billion. “He did not promise something. […] The explanation why individuals invested in it’s that he was paying everyone who wished to money out”.
Choose your facet and watch the complete debate on Cointelegraph’s Youtube channel!