Bitcoin is not a Ponzi scheme
According to the SEC:
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.
OK, that does sound a little like Bitcoin, but wait:
Ponzi scheme organizers…use money from new investors to pay earlier investors and may steal some of the money for themselves.
In other words, in a traditional centralized Ponzi scheme, there are organizers who hide the nature of the scheme and secretly siphon off some of the money for themselves. (According to this definition, therefore, there’s no such thing as an “open Ponzi scheme.”*)
Bitcoin, in contrast, is decentralized and its workings are completely transparent. It’s more like a pyramid scheme or, more simply, an asset price bubble.
But pyramid schemes and bubbles do share this last bit in common with Ponzi schemes:
With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.
