Cryptocurrencies, since their birth, have faced accusations of fraud. And it is that, for those who do not know how currencies like Bitcoin and the Blockchain technology that allows it to work, they seem like some kind of ponzi scheme. However, when the usefulness of BTC and other crypto assets in the real economy has been more than proven. Scott Melker considers fiat money to be the true ponzi scheme, as he comments in the Tweet of the day:
Fiat money, a ponzi scheme?
Understanding cryptocurrencies is not easy. And it is that, for the millions of people who have lived their entire lives under the financial system dominated by fiat money. The concept of a decentralized virtual currency can seem very strange. Especially when a myth has been created around it, which points to Bitcoin and cryptoassets as fraudulent ponzi schemes.
However, over the years, the value that cryptocurrencies have for the economy has been increasingly demonstrated. Serving not only as a potential replacement for fiat money. But also as a mechanism for the creation of applications of all kinds. Including the development of decentralized finance, which is booming today.
Therefore, for analysts like Scott Melker, it would not be cryptocurrencies, but fiat money, which would have all the characteristics of a ponzi scheme. Well, as Melker explained through his Twitter account, the Coronavirus crisis has made clear the discretionary power that governments have over their national currencies.
«People love to call #Bitcoin and cryptocurrencies a Ponzi scheme, which is patently false. Endlessly printing dollars and increasing a debt you never intend to pay is a true Ponzi scheme«.
With this message, Scott Melker would show his vision on fiat money. And especially, I would compare the operation of cryptocurrencies during the pandemic with that of fiat. Showing, according to him, that they have a much greater resemblance to ponzi schemes than Bitcoin.