Is bitcoin a scam?

Is Bitcoin a Scam or Ponzi Project? Before I answer that question, let's look at four general features of a Ponzi scheme.

Firstly, there must be a promoter for this project. It could be a single person or a corporation.

The main point here is that a single team (and thus benefit) is promoting the scheme. The second characteristic promised return.

This project promises immaterial sky-high returns to attract perfect investors. This sentence can be "true if it is true, but it is probably" always in this situation.

The third character is related to the liquidity of investment, which is the easiest way to get out easily. Using promotor discourages withdrawal from investors and using these three methods in one or more ways.

A stick method is where the investor loses a portion of his investment if he withdraws early

On the contrary, the Gaza system enters the investor even with the promise of higher returns and contributes to long-term investments.

Finally, the investor needs "very good-no-share" approach to find a new investor for his investment. In short, he needs to find new fools to find him.

Yes, the simplicity of the Ponzi project is at the introduction of the evolutionary and the mystery of fancy.

So we come to the fourth character. New investors need a constant flow for reintegration schemes (read: new money) to pay for funding to initial investors.

Before the promotor disappears in thin air, a small number of initial investor actually receives cash and enjoys a ridiculous return. This promotor intentionally applies to maintain confidence in this plan as these initial investors will help bring new investors.

Let's apply these four features to Bitcoin. Decentralized nature of Bitcoin does not mean that there is no party to promote Bitcoin.

One can argue that Bitcoin has lots of people to promote the virtues

However all these unrelated groups, promoting the virtues of gold as an investment, correspond to various investment advisers.

What about returns?

Yes, Bitcoin gave spectacular profits to some investors last year.

But this profit is not promised at first place. Indeed, people have lost Bitcoin in exchange for money, although its meteorite has increased. It is due to the extreme instability of the price.

Bitcoin has enough liquidity, can you get it? The crypto-related transaction accounts have been downgraded by regulatory regulators and all the bank's latest headlines that you've been hard-to-get-out at once.

However, nothing could be further from the truth. Decentralized nature means there are many options for selling Bitcoin, although not all are convenient

Finally, do Bitcoin investors pay for the benefit of initial investors by delaying the group?

In that note, Bitcoin may look like Panzy Schema.

Then again the same investors who might be asked to enter the market at the top of the dot bubble or housing bubble.

This is a zero sum game.

I do not accept the existence of numerous proven scams if I use Bitcoin or references.

In tackling that point, this scam really does make money in Bitcoin, indeed, remember never hitching a journey on Bitcoin bandwagon and hip.

Before the emergence of cryptocarbaal, ponzi schemes already existed. These schemes claim the use of special techniques for making various asset classes such as products or real estate to create spectacular profits. Do you hear someone in the real estate label as a Ponzi?

That said, I must of course be certain that one can easily lose money in a fortune or bitcoins or a Ponzi scheme must be lost. However, Bitcoin is not a scam or ponzi scheme, as shown on the top points.

Chong Jin Yoong, CFA, is a financial market coach and mentor.

In a speech titled "Bitakayen: Dive In or Stay" on February 10, the reader will learn more about Bitcoin and Cryptocurrence Saga.