Bitcoin News
By Steven Anderson
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Twitter Stephen Diehl expresses: Let’s talk about how pyramid schemes like Bitcoin have historically exploded and the public damage that happens when they do.
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A pyramid scheme is a type of fraud whereby investments are solicited from the public on the pretense (implicit or explicit) of offering high returns on their investment.
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The secret sauce that makes it all spin is that returns are paid to the early investors out of the funds received from those who invest later.
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From an accounting perspective, the scheme is insolvent from start. The assets exceed liabilities and since the scheme has no cash flow, other than bringing in new investors, the…
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Later investors are drawn in by cherry-picking anecdotes about the returns of early investors while ignoring (often due to obfuscation) the macro cash flows of the entire scheme.
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Eventually, when late investors try to get their money out of exchanges or brokers they discover the truth about the scheme being insolvent.
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Several large "funds" emerged that promised to take retail investment and use the funds to invest in other developing enterprises and infrastructure in the nation.
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People who are personally invested in a pyramid scheme will fight tooth and nail to legitimize it. They want to believe. Conmen don't sell you facts, they sell you emotion.
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Not surprisingly, these schemes were indeed nothing but thinly veiled pyramid schemes that kept soliciting more and more public money until they eventually broke the entire…
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All throughout this era, the corrupt government stayed silent about the scams (just like the SEC and the federal government does today), adding fuel to the meme that the pyramid…
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In today's crypto "market" there is no longer a stigma associated with pyramid schemes. You shill your dog token of choice because you want it to go up, and that's pretty much…
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The moral of this story is that a competent government, strong regulation, and a financially literate public are the only forces that can stem the frenzy before pyramid schemes…
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We need more people with the audacity to call out crypto pyramid schemes for what they really are: Economically unsustainable investment fraud that hurt innocent people and…
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Congressman Patrick McHenry back in 2019 when talking Bitcoin (BTC) stated it was “unstoppable,” adding: “We should not attempt to deter this innovation, and governments cannot…
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