Bitcoin is a Ponzi scheme. It’s highly overvalued, and it’s not true that anyone who buys in will receive money from investors buying in later.

Recently, I’ve seen a lot of highly flawed arguments in favor of Bitcoin floating around. The one I’ve noticed most often is that Bitcoin, unlike real currency, is deflationary — which supposedly means that it has a lot of value. Bitcoins are limited to 21 million. And I guess the argument is that because of that, the price will constantly go up, so if you buy in now you can sell later at a higher price.<br><br>But there have been plenty of other examples of deflationary currency in history, and those currencies did not have high value. For example, if you have a couple thousand or maybe tens of thousands of VEB, that’s the highly deflationary currency of Venezuela, then you’re not rich. If you have thousands of LBP, that’s the highly deflationary currency of Lebanon, that means nothing. <br><br>There’s also the argument that Bitcoin is not controlled by any government. But this isn’t true. Bitcoin is controlled by thousands of governments; it’s just that they’re all in Asia. There’s also the problem that you can’t trust the networks in Asia to safe guard your money.<br><br>The other argument is that Bitcoin is considered a store of value by some people. But it’s not true that Bitcoin is widely considered a store of value. If Bitcoin were a widely accepted store of value, then stores would widely accept Bitcoin as payment. But that’s not the case.<br><br>Likewise, if Bitcoin is considered a store of value by the wealthy, then it should behave something like gold. But Bitcoin is really volatile; it has been going up and down constantly. Gold is much more stable in value.<br><br>There’s also the argument that people widely use Bitcoin for ordinary transactions, and that anyone can convert it to fiat money. This is also not true. As I said before, stores don’t widely accept Bitcoin. And because Bitcoin is so volatile, no one who wants to keep value safe would buy it. This is why people don’t widely use Bitcoin for ordinary transactions. If you’re looking at a highly fluctuating curve, do you really believe that it won’t go in the downward direction? The argument that you can convert Bitcoin to fiat money at any time also isn’t true. If you earn income in Bitcoin, then you have to pay capital gains tax on it. And if you buy something with Bitcoin, then you have to pay a sales tax on the value of the Bitcoin in fiat currency. There are some Bitcoin networks that offer to do these conversions automatically. The problem with that is that Bitcoin prices fluctuate highly, so you can’t trust the networks to do the conversions accurately.<br><br>The other argument I’ve noticed is that Bitcoin is self-sustaining. That whatever happens to it, value will always be stored in Bitcoin. That’s not true. In the past, there were many other different value systems. For example, there used to be a widely accepted system where value was stores in bars of salt. A long time ago, you could pay your taxes with salt. But most countries don’t accept payment in salt anymore. There used to be a widely accepted system in North America where value was stored in beaver skins. But nobody accepts beaver skins as payment today.<br><br>There used to be widely accepted systems where value was stored in precious metals, such as gold, silver, and copper. There used to be a gold standard in many countries, where any dollar or pound or other unit of currency could be exchanged for a fixed amount of gold. But today those standards don’t exist anymore. <br><br>Another thing I’ve noticed about Bitcoin is that many Bitcoin advocates actively discourage anyone else from participating in the Bitcoin system. Bitcoin advocates will often say that Bitcoin is going to moon (go to the moon), but only after the price goes down for a while. And then when the price starts going up, they’ll say it’s a bear trap (a trap that bears fall into). What they’re saying is that the price has gone up before, but then it goes down. So we can buy up all the Bitcoin now, drive up the price, and then when the price goes back down we’ll buy it again.<br><br>They’ll also say you need to do your own research. You need to do your own research before you invest in Bitcoin. But that’s not true. That’s just an excuse to prevent others from participating. In reality, Bitcoin advocates don’t want others to participate. They’re legally required to be honest about the dangers, and to give others good advice. But they’re not doing that. They’re just spreading misleading information.<br><br>In reality, Bitcoin is highly overvalued. Bitcoin is not a safe way to store value. It’s not widely accepted as payment, and there’s no widely trusted way to convert it to fiat money.<br><br>That means that it’s possible that the price of Bitcoin will go down to 0. Bitcoin is also highly volatile, so we can’t trust that the price will go up. The only reason the price of Bitcoin has gone up in the past is that new investors have bought in. But if there’s no one to buy Bitcoin from you when you want to sell it, then you might as well have 0. And if the price goes down, then you have less than 0 because you lose money.<br><br>In reality, Bitcoin is a Ponzi scheme. A Ponzi scheme is when someone creates a highly successful company. They pay investors in the company by paying them money from other investors, and they tell them that their money came from the company’s revenue. They keep doing that until eventually they run out of investors and shut down the company.<br><br>But Bitcoin is legally not a Ponzi scheme because it’s not a company. The people running the Bitcoin system are not the same as investors. And Bitcoin is not a company because it is a currency. But legally, Bitcoin has many of the characteristics of a Ponzi scheme. There is no widely trusted way to convert Bitcoin to fiat money. The price of Bitcoin is highly volatile, and it’s possible that the price of Bitcoin will drop to 0. Bitcoin is not widely accepted as payment. <br><br>Bitcoin investors don’t receive money from revenue; they receive money from later investors buying in. Any revenue generated from Bitcoin is very small compared to the value of the Bitcoin system. Bitcoin is not self-sustaining; it requires constant buy-ins from new investors to survive. In the past, there has been other currencies that were once widely used but are no longer widely used today. Bitcoin is not a widely accepted store of value. <br><br>In reality, Bitcoin has many of the characteristics of a Ponzi scheme, and it’s not true that anyone who buys in will receive money from investors buying in later.