Quote from: titular on December 14, 2021, 07:41:09 PM

One of the largest roadblocks I have in defending bitcoin (and cryptocurrency in general) is when people compare it to a Ponzi scheme.

There is plenty of bitcoin FUD that is easy to defend, but when people pull the Ponzi-card, that is when I begin to get agitated. This is because I don't have a sound argument to combat this claim.
.....

What is the best argument against the Ponzi scheme narrative?

In what ways are Ponzi schemes different from bitcoin?

How do they generate value differently?

You are getting agitated because you are not able to handle the truth. The truth is that Bitcoin *is* a Ponzi scheme. At-least until now.

People who get in early and HODL will make way more money than those who come in later and HODL and so on and so forth.
Right now Bitcoin is valued at $47k. The only way it will shoot up in price is if more and more people get into crypto and buy more and more of Bitcoin. This includes institutional investors, Billionaires, regular people, people who switch from Alts to BTC etc.

If nobody ever buys another BTC, the price will collapse because most people (99.999%) who "invest" in BTC/Crypto are only doing so to make more money.

This is how BTC started out and how it blew up and grew like a wild fire on a hot summer day.

We have a suicide hotline posted regularly after the bubble crashes after a new batch of retail noobs get slaughtered every cycle. This is almost a meme now to sell when grandma starts talking about crypto.

Let's see the definition of a pyramid scheme as per usa dot gov

"Pyramid schemes need a constant flow of new participants to keep them going. They use new recruits’ "investments" to pay “profits” to those participating longer.

Pyramid schemes collapse when they can't recruit enough new participants to pay earlier investors."

Having said this. I also think that BTC is slowly transitioning away from no longer being a ponzi. BTC was not inherently valuable in the beginning. But now BTC is *famous* and has a rich history and will simply never ever go away. It is fast becoming a vanity asset and it akin to digital gold. Every Billionaire, Millionaire will eventually want to have some just for sake of vanity. Each BTC will be like a painting of Mona Lisa with it's rich transaction history and being a scarce asset.

A random guy spent 10000 BTC to buy a $10 pizza 10 years back. Now, most of middle class in the world cannot afford to buy even 1 single BTC. Becoming a whole coiner is kind of a big deal now. Even people who do buy 1 BTC get nervous and sell it off if it declines by 10% in a single day.

Eventually, 1 BTC will end up trading around $5 Million per coin or more for a simple reason that big players want to get hold of it and there is simply not enough to go around.