Is Bitcoin a Scam? Is Bitcoin a Ponzi Scheme?

Is Bitcoin a Scam?

Bitcoin is presented as a currency that bypasses banks and is said to liberate us all from the throes of centralized banking. Some refer to it as a cryptocurrency, but no government in the world recognizes it as a currency. Bitcoin is not currency. It’s not money. It has no intrinsic value. It serves no purpose and it is backed by nothing.

We might live in the Information Age, but that doesn’t mean the information is accurate. Most of what we see, hear and experience through the media is designed to achieve a purpose. That purpose is usually to transfer money from our pocket to the pocket of someone else.

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Is Bitcoin a Scam?

Bitcoin is the perfect vehicle to quickly and effortlessly turn your money into someone else’s money. If you buy into the bitcoin mania, you will lose. Many people have. Many people have lost their life savings.

Most of the hype surrounding bitcoin relates to getting rich quick. It’s doubtful you will get rich with bitcoin, quickly or otherwise. You’ll be lucky to break even.

What is Bitcoin?

Bitcoin is a snippet of code and nothing more.

 “To cut through some of the confusion surrounding bitcoin, we need to separate it into two components. On the one hand, you have bitcoin-the-token, a snippet of code that represents ownership of a digital concept – sort of like a virtual IOU. On the other hand, you have bitcoin-the-protocol, a distributed network that maintains a ledger of balances of bitcoin-the-token. Both are referred to as “bitcoin.” (CoinDesk)

In this article, I’m discussing bitcoin the token, the virtual IOU, that snippet of code, as described by CoinDesk, not the protocol ledger, otherwise known as blockchain.

Bitcoin is Not a Currency.

Bitcoin is not a currency. No country in the world recognizes bitcoin as a currency. No major financial institution will accept bitcoin. Since it’s inception financial institutions have actively avoided it for reasons that will soon be made clear.

Is Bitcoin a Scam? 1 Is Bitcoin a Scam?

Bitcoin is a snippet of code.

In fact, contrary to popular belief, very few businesses accept bitcoin. The few businesses that appear to accept bitcoin are using a third party to exchange bitcoin for dollars or Euros. They do not accept bitcoin directly.

In other words, using bitcoin to buy stuff complicates a process that is normally very simple. It usually also adds expense to the process as well.

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Bitcoin Has No Intrinsic Value.

Intrinsic value is the underlying value of an asset. That value is determined by how well it solves an essential problem. In a grid down situation, food and water have high intrinsic value, because they solve the problem of survival.

Gold has intrinsic value because it is beautiful, has industrial uses and has been a store of wealth throughout recorded history. The US Dollar has intrinsic value because it is backed by the United States Government and it is the only thing you can use to pay taxes in the US.

In prison, cigarettes have intrinsic value, because they can be smoked or traded for other goods.

Bitcoin does not solve anything, and it has no intrinsic value. As mentioned earlier, it’s just a snippet of code. Its value is based on hype and nothing more. Because it’s value is determined by hype, it can only be sold to the greater fool.

Theory of the Greater Fool.

“The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. In other words, one may pay a price that seems “foolishly” high because one may rationally have the expectation that the item can be resold to a “greater fool” later.”(Wikipedia)

In other words, if you hope to make money with bitcoin, you will have to find someone who is willing to pay a higher price than you paid for it. As I will show in a moment, this will be very difficult because you cannot influence the price.

In fact, if you get into the bitcoin market, YOU are probably being played as the greater fool.

Is Bitcoin a Ponzi Scheme?

“Bitcoin prices have shot up, not because of underlying value but because of misinformation, concentrated market power, hoarding, opaque and unregulated exchanges, insufficient trade reporting, elevated marketing hype and greater opportunities for market manipulation.  . . . Bitcoin is in a hyper-bubble and will implode.” Mark T. Williams, Former Federal Reserve Bank Examiner, as quoted in ‘Bitcon.’

Most bitcoins are owned by a small group of people. In his book “Bitcon,” Jeffrey Robinson refers to this elite group of bitcoin owners at the “aristocracy.”

The more buzz the bitcoin aristocracy can create about bitcoin, the higher the price goes, and the more investors will ScamAvenger Girl giving thumbs downclamor to buy. It’s a situation ripe for exploitation. Bitcoin is the perfect “Pump and Dump” Ponzi scheme.

The Bitcoin Pump and Dump.

To be clear, bitcoin is a high-tech variation of Charle’s Ponzi’s original scheme where he was central to the operation and paid original investors with money from the newest investors. Bitcoin is slicker.

It only takes one bitcoin aristocrat to initiate the pump and dump. The returns are staggering when they do.

Here’s how it works; the bitcoin aristocrat pumps up the price by creating a buzz in the media. This draws in new investors hoping to get rich quick. The aristocrat dumps his bitcoins on the new investors at the higher price.

When the price falls, as it naturally will do because there is no intrinsic value in bitcoin, the aristocrat buys back his bitcoins at the deflated price and starts the process over again, pumping the price to new heights.

This same scheme is being played out will nearly all cryptocurrencies. It’s the reason they were created.

Why Bitcoin is Doomed.

A nation must control its economy. Years, if not centuries, of power, laws, agencies, and contracts have evolved to give government absolute control over all trade within its borders and between it and other nations.

Control over the economy is backed by an absolute monopoly of force carried out by police and the military. Bitcoin, a snippet of code, cannot compete. It lives because they let it live.

When no more new investors can be found to fuel the pump and dump scheme, bitcoin will die, because it has no intrinsic value, it serves no purpose and it is backed by nothing.

Is Bitcoin a Scam? 2 Is Bitcoin a Scam?

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Want to Make Money?

If you are searching for a way to make money online, I caution you to avoid cryptocurrencies. It’s a game of musical chairs you cannot win. Any offer that promises get rich quick is probably a scam, even if it is endorsed by a celebrity.

The more desperate and impatient you are to make money, the more vulnerable you will be to scams.

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The Greatest Opportunity of Our Time.

The greatest opportunity of our time is not bitcoin or any of the other cryptos that are popping up like weeds across the internet. The greatest opportunity is the internet itself.

The internet is your invitation to participate in the global marketplace. You won’t get rich quick, but you can get rich if you’re patient and commit to your success.

If you want to know how to succeed in the global marketplace with your own internet business, I recommend the the FREE Starter level of Online Entrepreneur Certification Course. No credit card needed. Also, when you signup for the FREE TRAINING through the link below, I’ll personally mentor you at no cost.

Learn more about the Online Entrepreneur Certification Course and how to start for free, Click Here.

If you found this article helpful, or have experience with bitcoin please leave a comment below. 

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