{"id":30734,"date":"2018-02-09T07:39:30","date_gmt":"2018-02-09T12:39:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30734"},"modified":"2018-02-09T07:39:30","modified_gmt":"2018-02-09T12:39:30","slug":"is-cryptocurrency-a-ponzi-scheme","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30734","title":{"rendered":"Is Cryptocurrency a Ponzi Scheme?"},"content":{"rendered":"

Is Cryptocurrency a Ponzi Scheme?<\/a><\/h3>\n
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Just three weeks ago Bitconnect announced it was shutting down after being accused of running a Ponzi scheme.\u00a0 <\/span>Techcrunch<\/i><\/span><\/a> chronicles Bitconnect\u2019s decline noting how the term \u201cpyramid scheme\u201d was not an unfair assessment as to what was going on:<\/p>\n

\u201cBitconnect was an anonymously-run site where users could loan their cryptocurrency to the company in exchange for outsized returns depending on how long the loan was for. For example, a $10,000 loan for 180 days would purportedly give you ~40% returns each month, with a .20% daily bonus. Bitconnect also had a thriving multi-level referral feature, which also made it somewhat akin to a pyramid scheme with thousands of social media users trying to drive signups using their referral code.\u201d<\/p><\/blockquote>\n

Typically a Ponzi scheme is characterized by first by promising large, unrealistic returns such as the ~40% monthly return. The promise of these sorts of returns largely regarded as both suspicious and impossible, even under even the most aggressive market conditions.<\/p>\n

Another point of critique aimed at Bitconnect was the fact that those who sign up for its service are encouraged to share its affiliate marketing and affiliate links. If you look online for any discussion of BitConnect you will find the comments riddled with affiliate links<\/span><\/a>. The reason for this is that those who spread the affiliate links were allegedly to be rewarded with higher returns on their original deposit if the link they posted is later used to sign up a new customer.\u00a0 <\/span>Best Bitcoin Exchange<\/span><\/a> chronicles how one user is reported to have lost over $400,000 in the demise of Bitconnect.\u00a0 <\/span>And many others have made a legal challenge in a class-action lawsuit<\/span><\/a> about their losses in this market.<\/p>\n

All this, however, begs the question that many of us have been asking for some time: are cryptocurrencies an elaborate Ponzi scheme?<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Is Cryptocurrency a Ponzi Scheme? Just three weeks ago Bitconnect announced it was shutting down after being accused of running a Ponzi scheme.\u00a0 Techcrunch chronicles Bitconnect\u2019s decline noting how the term \u201cpyramid scheme\u201d was not an unfair assessment as to what was going on: \u201cBitconnect was an anonymously-run site where users could loan their cryptocurrency […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1733,1269,18443,1806,5493,15611,18442,2942],"class_list":["post-30734","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-for-international-settlements","tag-bis","tag-bitconnect","tag-bubble","tag-counterpunch","tag-cryptocurrency","tag-julian-vigo","tag-ponzi"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30734","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30734"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30734\/revisions"}],"predecessor-version":[{"id":30735,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30734\/revisions\/30735"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}