Cryptocurrency is considered 'the biggest ponzi scheme in history'

 The Chinese expert assesses that Bitcoin and the cryptocurrency market in general is a large-scale multi-level model and should be avoided.


The senior leaders of BSN - China's blockchain-based service network - digital wallets and Web 3.0-based businesses are multi-level ponzi models, recommending people to be careful with this type of business.

A store that accepts Bitcoin payments in El Salvador. Photo: Reuters
A store that accepts Bitcoin payments in El Salvador. Photo: Reuters

In an interview with People's Daily on June 26, BSN experts Shan Zhiguang and He Yifan commented that cryptocurrencies are "the biggest ponzi scheme in human history", backed by communities "trying to by all means keep the cheating going".

According to the two, all digital currencies currently have no intrinsic value, relying entirely on two factors: the confidence of those who are participating and the number of new entrants - the typical characteristics of the model. ponzi - use the money of the latter to pay the former.

Zhiguang and Yifan also emphasized that money-making models such as play to earn or move to earn are now loosely structured, only tricking new players and quickly collapsing after a while. short time. "They have a delicate balance, maintained only by the trust of the participants," said Zhiguang.

In fact, critics of cryptocurrencies have long considered this type of scheme to be a sophisticated multi-level scheme where scammers use funds from new investors to pay back their previous investments. Skepticism has increased sharply in the past time, after the plunge of the market, leading to the so-called "crypto winter". This term refers to the gloomy period of the market when the prices of cryptocurrencies continuously fall and are difficult to recover for a long time, along with a series of bad news such as theft, fraud and orders. prohibited by managers.

Investors who poured money into cryptocurrencies last year are suffering huge losses, while an increasing number of crypto lending platforms, hedge funds and stablecoin issuers are mired in dire straits. . Many other platforms also struggled with cyberattacks that caused hundreds of millions of dollars in damage.

Among the most vocal opponents of cryptocurrencies is Microsoft co-founder Bill Gates. Recently, he suggested that cryptocurrencies and NFT are a "find the fool" game. Meanwhile, billionaire Warren Buffett calls Bitcoin "rat poison" and does not create any value.

Earlier this month, a group of computer scientists from companies and organizations such as Harvard University, Microsoft and Google signed a joint letter to US lawmakers, urging them to resist lobbying efforts. lang of the cryptocurrency industry and "regulate risky, flawed and unproven digital financial instruments".

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