I was watching "Betting on Zero" the other day, a 2016 American documentary directed by Ted Braun. It investigates the allegation that Herbalife is a pyramid scheme. And then it got me thinking.

Is Bitcoin a pyramid/ponzi scheme that only the latest joiners will stand to lose?

I will not answer that question directly, as I do not believe that it would be as effective. Before I delve into it, I also like to clarify that these are my opinions. I am writing this because I would like to justify, mostly to myself, the legitimacy of the claims made about Bitcoin, thus, allowing me to make more informed investments decision in this new and highly volatile market.

What is a pyramid/ponzi scheme?

Wikipedia:
A pyramid scheme (commonly known as pyramid scams) is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.

I would like to break down my opinions and thoughts from the definition of Wikipedia as follow:

1. Is Bitcoin a business?
2. Are there any recruitment that is ongoing or mandated by a central executive board?
3. Are there any promise of payments or services after "enrolling" into Bitcoin?
4. Is Bitcoin a pyramid scheme?

Bitcoin Corp Ltd?

According to Wikipedia, "It (Bitcoin) is the first decentralized digital currency, as the system works without a central bank or single administrator." No one owns Bitcoin's Blockchain.

As highlighted in Bitcoin.org, "Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part." This means plainly that ANYONE can dive into its core and improve it, either on the core blockchain or create a fork (more of this in subsequent posts).

There are no KPIs, there are no sales targets (not considering roadmaps) and there isn't an executive board that is dictating any self-serving agendas onto the network.
Note: 51% attacks and other claims of centralization are not part of this discussion. It is only about Bitcoin in general at the basic level.

Therefore, Bitcoin, in my opinion, cannot be classified as a business.

Can Bitcoin evangelism be considered a recruitment tactic and strategy to deceive new joiners and followers?

We first need to define what "recruitment" is. Wikipedia shares that "Recruitment refers to the overall process of attracting, shortlisting, selecting and appointing suitable candidates for jobs (either permanent or temporary) within an organization."

Bitcoin is, in my opinion, definitely an organization. Its intention was to be a decentralized network and to serve as a payment system for the world economy. While it does not have any CEO or executive boards, there are interest groups/parties that would want Bitcoin to succeed. They include the miners and developers among others.

It is clear that pyramid/ponzi schemes directly incentivises the one who does the recruiting. The more he recruits, the higher he climbs. The earlier he joins, the better the remuneration.

While you can argue that there are incentives to get more people into the network, eg. adoption usually translate to increase in Bitcoin's price, I believe most of those who are sharing about Bitcoin is because of its revolutionary technology underlying Bitcoin.

I would see them as evangelist than recruiters.

They share about the good and potential Bitcoin can bring to the world, and most of the time, they do not equate a new believer as an additional income stream.

Having said that, as with all organization, Bitcoin gets its value from the number of people who believes in the change it can bring. But I do not believe it is fair to say that it is the same as the recruitment done in a pyramid/ponzi scheme.

To be continued...