Is Crypto a Ponzi Scheme?

One of the main characteristics of a Ponzi scheme is the ability of its founders and promoters to offer mouth-watering returns 'with
little or no risk.'

Many of them also assert that they will deliver positive returns regardless of market conditions.

Due to the volatility of cryptocurrencies, many people believe and see them as Ponzi schemes, a bubble that will burst one day.

𝐇𝐨𝐧𝐞𝐬𝐭𝐥𝐲, 𝐢𝐭 𝐦𝐚𝐲 𝐛𝐞 𝐭𝐫𝐮𝐞 𝐨𝐫 𝐟𝐚𝐥𝐬𝐞 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐥𝐚𝐬𝐭𝐬 𝐟𝐨𝐫𝐞𝐯𝐞𝐫.

Remember, there was a time we used cowries, metal, cows, and
gold as a medium of exchange. Today we use fiat currency (paper money) as a medium of exchange.

We also used gongs, but today information is transferred
efficiently through emails and SMS. How many of the first search engines are still in use?

This stage in the blockchain and Crypto industry may be
likened to the gold-standard era of money evolution before we had fiat currency in its form today.

𝐇𝐞𝐫𝐞 𝐢𝐬 𝐰𝐡𝐚𝐭 𝐲𝐨𝐮 𝐬𝐡𝐨𝐮𝐥𝐝 𝐤𝐧𝐨𝐰:

Don't focus on volatility, instead focus on the utility of cryptocurrencies.

If you don't understand the specific use case of the cryptocurrency, then it is likely to be a scam. The crypto market is similar to traditional markets. It is also entirely dependent on the hope of returns.

The crypto market is relatively young when compared to FOREX. Factors such as wars,  historical events, and policy reviews also affect it.

However, unlike the FOREX market, the price fluctuates owing to amateur players and regulatory concerns. Many criminals in this promising and amateur industry prey on the ignorance of the unsuspecting public and introduce scam projects.

These scam projects are more prevalent in places where
people lack basic crypto knowledge fueled by the idea of Get-Rick-Quick.

These scam projects work like Ponzi schemes promising very
high returns with little or no risk. Their marketing is also very aggressive with social media and sometimes influencers.

Despite these issues and flaws, new technologies and policies are being deployed in the crypto space to prevent rug pulling, track
transactions, and capture criminals.

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