Bitcoin – A Ponzi Scheme or A Good Investment?

Born in early 2009, Bitcoin became known as the world’s first cryptocurrency. A form of currency that is generated and verified by the solution of complex mathematical puzzles being solved. Once solved, all the data is collected into the form of ‘blocks’ that are linked together forming a chain of blocks. The chain of blocks is known as the ‘blockchain network’. This is essentially the ledger of all the transactions ever done using Bitcoin.
What’s the Big Deal?
All of that sounds so complex or simply disinteresting to someone unaware of what Bitcoin is. This revolutionary new currency has made a significant shift in the financial market worldwide with its price soaring higher and higher. Those who invested in it early on have seen completely unprecedented returns on their investments.
Why that’s so?
Bitcoin is a decentralized, digital, peer-to-peer payment system. The word ‘decentralized’ is key here. This means that Bitcoin does not fall under the regulations our every day fiat currencies do. The same laws do not apply to cryptocurrencies (that’s digital currencies using blockchain networks are called). No central authority controls the flow and generation of this currency. In its stead, the generation and flow of Bitcoin is managed by the Bitcoin community itself, hence the value of it is also in their domain as a democratic collective.
Meteoric Rise
Unless you’ve been living under a rock, you will have heard that Bitcoin is the most successful digital currency right now. Looking back just one year ago, the value of a single Bitcoin was equivalent to $637.01 USD and at the time of writing, its value is at $5,560.90 USD per Bitcoin.
Remember The Tulip Mania?
In the 1630s Holland, a similar phenomena took place. Tulips were considered an alternate form of currency and everyone entered a frenzy of investing in tulip bulbs an amassing them. A sort of economic bubble formed due to the tulip mania and at one point, the worth of a single tulip bulb was 10 times more than the annual income of a skilled craftsman. Their value increased exponentially.
That type of growth in a revolutionary financial system had never been seen before or after – Until Bitcoin came along. Bitcoin’s growth has dwarfed even that.
Ponzi Scheme or Good Investment?
The tulip mania showed much initial promise but when the speculative bubble burst, many people lost entire fortunes to it. Much like the Tulipmania, Bitcoin is a speculative bubble. Currencies that are successful have some sort of backing to them. They have a tangible form, a way to exist in the real world. The Bitcoin bubble is inevitably going to burst regardless of its continuing growth.
For all those who got into the action early, it is a good investment. That is, if they manage to get bail out of it before the bubble bursts and Bitcoin collapses. At this point in time, I would say investing in Bitcoin any more than you can afford to lose would be the same as being a victim of a Ponzi Scheme. There is no clear answer to this question. Let’s see where things go.

Related posts
BitcoinBitcoin NewsbtcusdBTCUSDCBTCUSDTETFNewsxbtusd

Bitcoin May Never Go Below $50k Once An ETF Is Approved, Declares On-Chain Analyst

Bitcoin may never drop below $50k asserts on-chain analyst Ki-Young Ju. But as usual, there are conditions that follow this possibility. In a tweet, Ju analyzed that Bitcoin could follow the same path that gold took in 2004 when the first…
BitcoinBitcoin NewsbtcusdBTCUSDCBTCUSDTNewsxbtusd

Quarterback Star Tom Brady Breaks Internet After Showing Interest In Bitcoin

Tom Brady, the American athlete who is widely regarded as the “greatest” quarterback in NFL history is the latest celebrity to show interest in the world’s most valued cryptocurrency Bitcoin. Brady who has a massive Twitter following of 1.9 million…
BitcoinBitcoin NewsbtcusdBTCUSDCBTCUSDTNewsxbtusd

Almost $200 Billion Worth Of Bitcoin Is Currently At Risk – Report Warns

A recently published 2021 crypto report by Opimas LLC, a finance-based management consultancy firm, has revealed that approximately 3,480,000 out of the world’s mined 18.5 million Bitcoin, stands vulnerable to attacks as a result of improper safekeeping. The 36-page report…