A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.
According to this description, a Ponzi scheme has three characteristics:
- 1. It is run by an individual or an organization.
- 2. The operator of the scheme claims to earn profits on investments, but does not. This is the fraudulent part.
- 3. It pays returns to its investors from their own money or the money paid by subsequent investors.
Bitcoin fails #1 because it is not run by an individual or an organization.
Bitcoin fails #2 because the non-existent operator of the scheme does not claim to earn a profit that is paid to investors.
Bitcoin is not and can not be a Ponzi scheme. Anyone that says that Bitcoin is a Ponzi scheme either does not know how Bitcoin works or does not know what a Ponzi scheme is.
You misunderstand the definition you quoted. The part after "rather than" explains what legitimate investments do, not what Ponzi schemes do. Legitimate investments have individuals or organizations running the operation who earn a profit that's distributed to investors. Ponzi schemes
don't have this.
If what you quoted was in fact a defintiion (it's not, but that's another story, then Bitcoin would be a ponzi scheme if it paid returns to investors from their own money or money paid by subsequent investors, which of course it does. When you sell bitcoins, the money you make comes from other people who buy bitcoins, many of which are also investors. As you point out, bitcoin has nobody running it who makes a profit they distribute to investors, they key sign of a ponzi scheme by the "definition" you repsented.