Is Bitcoin a Ponzi scheme?

Wikipedia defines a ponzi scheme in the following way:

“A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.”

Now let’s see if that fits bitcoin:

Does bitcoin have central authority? No.
Does bitcoin pay returns to its investors? No.
Does bitcoin require an ever increasing flow of money to sustain it? No.

Bitcoin is not a Ponzi scheme. It’s a true innovation in computer science and solves a well known problem called the Byzantine Generals problem.

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