December 22, 2023
A think-tank called Gravel Institute believes that Bitcoin is a scam. Credit: Onov3065/Wikimedia Commons/CC BY-SA 4.0

An American think-tank called the Gravel Institute recently released a new video explaining why it believes Bitcoin is a scam akin to a Ponzi scheme.

Writer and economist Doug Henwood spoke in the video explaining why he believed Bitcoin resembled the structure of a Ponzi scheme and other historical scams.

Henwood quickly outlines the format of Ponzi schemes, where criminals take money from their victims and promise to invest that money, while actually cycling it back to earlier investors. Henwood said what was key to note about the relationship between Ponzi schemes and Bitcoin was that Ponzi schemes tend to fail because they run out of money to move between investors — something he compared to Bitcoin’s limited supply of tokens, capped at 21,000,000.

Henwood also highlighted the fact that bitcoin is not backed by anything at all, and it is infrequently used as actual currency as crucial parts of his argument.

The economist said that once bitcoin began to really accrue value after 2017, the token became almost entirely speculative — people’s interest in buying bitcoins was in holding them in the hopes that their value would increase: “Why use bitcoin as currency when it might be worth more money later?” was the logic Henwood espoused.

Gravel Institute video outlines why they think Bitcoin “is a scam”

But he claims that this dynamic has a…

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