Cryptocurrency is NOT Built on a “foundation of paying your friends”Ĭryptocurrency is an asset class that is based on mathematics and cryptographic principles. This is why we say no – cryptocurrencies aren’t pyramid schemes!Ĭrypto has become a legit asset class in today’s economy like stocks or bonds so you should be paying attention without fear if you want to invest wisely. Pyramid schemes advertise themselves as investments with great payouts for the people who get their friends and family to sign up first, which is something that cryptocurrency investors don’t do.Ĭryptocurrency is advertised because of its availability on exchanges, not because it’s an opportunity to make money off other people. Pyramid Schemes are Advertised as a “Great Opportunity” That is actual value that crypto investors get out of their investment. What value does Bitcoin provide consumers? It provides them with a digital currency which many businesses now accept as legitimate payments for goods and services. It’s important for people who have invested in Bitcoin to know that they can’t make money by convincing others to invest too – so what do you need from cryptocurrency? Value. And in some industries accepted as an official mode of payment. Pyramid schemes are illegal in the United States it is a form of securities fraud.Ĭryptocurrency, on the other hand, is legal and has been recognized by governments. With Cryptocurrency being limited in its supply (at least until 21 million Bitcoins have been mined), it’s impossible for any individual or group of individuals to benefit from another person simply by accepting Bitcoin – they must be able to provide real value through whatever service they offer. Pyramid schemes like the “Ponzi Scheme,” early investors profit from their investment as long as there are more entrants joining into the system.Īs time goes on, this becomes unsustainable because of how much effort is required for each new entrant coming in, which leads to high turnover rates where not enough newcomers keep up with those who leave. No one can make money by creating a new cryptocurrency and convincing people to invest in it. Here are 5 solid reasons why cryptocurrencies isn’t and will never be a pyramid scheme: 1). Wondering how is bitcoin not a pyramid scheme? 5 Reasons Why Cryptocurrency isn’t a Pyramid Scheme Lets buttress on some few points why Crypto is a nice form of trading, investing and means of value exchange.
This is how Bitcoin was created, as well as most other digital currencies out there today. You can also “mine” for new coins by setting up your computer to do calculations and solve complex mathematical equations in order to create more money supply. The idea behind making money with Cryptocurrency is basically simple: you buy low and sell high. There is also the matter that there are actual “pyramid scams” out there which involve recruiting peers and having them pay an upfront fee or other such cost before seeing any returns on their investment. This is not accurate at all for a number of reasons, the first being it is very easy to judge someone as a scammer simply because they can make money off of something without doing much work in return. Many people believe that cryptocurrencies are pyramid schemes. Why Cryptocurrency is NOT Pyramid Scheme? We shall dig in deeper on how Cryptocurrency works.
It can be argued that this is similar to investing in shares of stock therefore it’s NOT a pyramid scheme. When an investor buys into a cryptocurrency, they buy coins and then hold them for profit.
The idea is that when you invest in cryptocurrency, you are trying to make money from the people who invested before you. In this post, we’re going to explore some reasons why people think it might be and also why they don’t.Ĭryptocurrency is often described as a pyramid scheme. One of the biggest questions around cryptocurrency is whether it’s just another pyramid scheme or not. Cryptocurrency is a type of digital currency that exists in a decentralized, peer-to-peer network.
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