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.

For those who are not readily familiar; A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds.

People compare bitcoin to a Ponzi scheme because the price increases when more money flows into the underlying asset.  If I buy for X and sell for X+100 that 100 profit of mine came from another person who bought into the scheme after me. In the eyes of many, this is dangerously close to how Ponzi schemes generate value.

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?



Great forum!! I think

Ponzi scheme requires a constant flow of new money to survive
It offers high investment return as compared to BTC.
Value is market is demanding the Bitcoin supply.