Is Bitcoin a financial pyramid? Automatic translate
Bitcoin suddenly burst into our lives. Many are suspicious of cryptocurrency and consider it a financial pyramid. Are such concerns true? Is it safe to buy cryptocurrencies on bitcoin exchanges ? (By reference - rating of such exchanges). Coinitcoin is neither a hoax nor a financial pyramid and should be bought on specialized exchanges. Now about everything in more detail.
What is a financial pyramid?
The financial pyramid is a fraudulent organization. She, like an ordinary bank, attracts money from the population, promising to pay income to investors in the future. At the same time, incredibly high interest is promised, which can reach 100% per month. Often a special legend is written for clients explaining where such incredible profitability comes from. For example, recently, the organizers of the pyramids say that they use robots to trade currency.
In reality, the first customers are paid interest at the expense of the money that other investors follow. As long as more and more people carry money into the financial pyramid, it can function. But inevitably there comes a time when the incoming money is not enough to pay interest. Then all the organization’s offices are closed, its “managers” cease to communicate, and the organizers of the pyramid disappear with the money of customers.
Comparison of bitcoin with a pyramid
Any pyramid is an organization. But is there any company that produces bitcoins and sells them to people? Not. Bitcoins can either be purchased on the exchange from other people, or obtained through mining. The whole system is absolutely decentralized, there is no single organization responsible for the circulation of bitcoin. All owners of bitcoin wallets are in an equal position.
But did someone create a system of bitcoins? Yes, its creator is a certain Satoshi Nakamoto. Most likely this name is just a pseudonym behind which not only one person is hiding, but a group of people. They created the necessary software. Maybe there are some loopholes in the program that give their creators privileges and opportunities for fraud? No, because the source code for these programs is open. Every person who is pretty good at programming can familiarize themselves with the code and find loopholes in it. If they were, then they would have long been discovered.
The next feature of the pyramids is a guarantee of high interest. But in this case it is not. Bitcoins in general were not initially positioned as a means of generating income, it is only a convenient tool for money transfers around the world, and no more. When a person buys bitcoins, he simply receives a digital product. No interest is credited to his account. You can earn on the sale of bitcoins, but none of the creators of the cryptocurrency has ever guaranteed that its rate will grow!
Also, the pyramids are distinguished by an aggressive advertising campaign - this is how they attract investors. The growing popularity of bitcoin has caused an abundance of publications about cryptocurrency, but are there any advertisements among them? Does any company offer Bitcoin related services? No, such advertising is almost never found.
At its core, bitcoin is simply a commodity traded on exchanges, such as gold, silver, platinum, oil, grain. Critics say that, unlike ordinary goods, cryptocurrency has no real value, but it is not. Bitcoins are an incredibly convenient means of payment. Already, many US migrants from Mexico are transferring money home using cryptocurrency. Even when transferring without commission, the money will reach the recipient in just a few hours.
Bitcoin is not a financial pyramid, but a convenient means of payment. Most people use it to transfer money, and not as a source of enrichment. The possibility of earning on fluctuations in the cryptocurrency rate is only a secondary feature of bitcoin, which is also characteristic of more familiar currencies.