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Neither "ponzi" nor "pyramid" are perfectly accurate descriptions for how crypto-asset systems like Bitcoin and Ethereum actually work. Ponzi schemes are usually administered by a central operator, and they fall apart when demands exceed deposits and the scheme promoter is unable to satisfy investor requests, causing a loss in confidence or a run which first ruins the scheme's liquidity. In contrast, pyramid schemes are more decentralized in character. Each victim of the scheme, to recoup their funds, is required to become a principal in the scheme and recruit further victims, who then pay the principal and earlier principals above him. The Nakamoto Scheme is an automated hybrid of a Ponzi scheme and a pyramid scheme which has the strengths of both and (currently) the weaknesses of neither.

Matt Levine entertains the possibility that all money is a ponzi: "But of course crypto people will happily tell you that fiat currency is the biggest Ponzi scheme of all, and they are not really wrong are they?" JP Koning disagrees...

Robert McCauley, an economist at Boston University, wrote an op-ed stating, "Bitcoin is worse than a Madoff-style Ponzi scheme." His case? People buy bitcoin with the expectation of a profit. Because bitcoin is a "zero-coupon perpetual" rather than a "income-generating" digital asset, the only way to profit is to "cash out" to someone else - the salutary greater fool. Bitcoin is worse than your everyday pump-and-dump penny stocks for McCauley. If the economic project fails, it's not just zero-sum for investors who lose their money, but "negative-sum" for society because of bitcoin's steep power bill. However, he's off-base in stating that mining bitcoin "represents a real cost" for the world. It's simply not for any individual to decide what power switches to flip on or off in a free market, especially given that many people willingly enter into the economic arrangement of securing this largest of decentralized, digital monetary networks (sometimes profitably).

"The crypto system's need to persudade more and more people to part with their savings to maintain the ponzi makes false promises and mis-selling endemic. Nor has a swathe of high-profile failures, culminating in the recent collapse of Sam Bankman-Fried's empire, in any way deterred the survivors. Indeed it makes it even more imperative that they attract new deposits. If they don't, the whole thing will implode. But implode it will, eventually. Because ponzis always do. "

Amid a downturn in the cryptocurrency markets, the apparent swathe of Bitcoin sell-offs from a $3 billion Chinese Ponzi scheme could be to blame.

A Ponzi scheme is a type of investment fraud with five features; (1) people invest into it because they expect good profits, (2) that expectation is sustained by such profits being paid to those who choose to cash out, but (3) there is no external source of revenue for those payoffs which come entirely from (4) new investment money, while (5) the operators take away a large portion of this money. Investing in bitcoin (or any crypto) checks all these items. The investors are all those who have bought or will buy bitcoins; they invest by buying bitcoins, and cash out by selling them. The operators are the miners, who take money out of the scheme when they sell their mined coins to the investors.

Coin Metric's latest state of the network shows stablecoin usage statistics across issuers and networks. Roughly 40% of all PAX volume is tied to ponzi schemes. The report also demonstrates how stablecoins from the same issuer may be used differently across networks.

PlusToken's intake of BTC, EOS, and XRP since the beginning of the scam in mid 2018 is still being calculated by our team. Once this data is finalized, we expect that PlusToken will easily emerge as the largest crypto Ponzi scheme in history, surpassing both BitConnect and OneCoin by a handsome margin.

Last year, more than $4.3 billion in digital currencies was stolen in various crypto scams, according to Chainalysis. The majority of the scams were linked to Ponzi schemes including the PlusToken and OneCoin scams.

The most active Tron contracts are Tether, Ponzi schemes & high yield online investment programs (HYIPs)(Elipcity, MMMDefi, Rextron, Tronadz, Bankroll Flow), and unregulated betting games.

"The recent surge in the price of Bitcoin has reignited debates about a cryptocurrency bubble, many of them based on intuition. This column takes a formal approach to the beliefs underlying both sides of the debate by introducing a model that builds on the classical framework for rational bubbles. If the price of a cryptocurrency can be justified from transactional demand, it may be a sound investment. However, if future investment inflows are needed to explain the price, that indicates a bubble, with payoffs resembling a Ponzi scheme."

Quadriga cofounders Michael Patryn and the now-deceased Gerald Cotten worked together for a period at Midas Gold, a digital currency exchanger that ran from 2008 until May 2013, when it was pulled offline. Now it appears their connections stretch back even further.

In August, BTC/USDT represented 71.23% of total volume traded into both fiat and stablecoin. Despite controversies, USDT continues to be the most popular stablecoin for Bitcoin trading, followed by USDC, PAX, and TUSD. Bitmax, a trans-fee mining exchange, constituted roughly half of all USDT trading volume across all exchanges. Unlike regular cryptocurrency exchanges, trans-fee mining exchanges refund the fees paid by traders in the form of the exchange's native token. While popular with traders, these exchanges have faced criticism from industry experts and were often compared to Ponzi schemes. These exchanges also incentivize wash trading.

Last year, more than $4.3 billion in digital currencies was stolen in various crypto scams, according to Chainalysis. The majority of the scams were linked to Ponzi schemes including the PlusToken and OneCoin scams.

Cryptocrime is expanding. Ponzi schemes and other frauds involving bitcoin and cryptocurrencies lured at least $4.3 billion from investors in 2019, according to Chainalysis. That was a bigger haul than the combined $3 billion in 2017 and 2018.

"Bitcoin has mutated into a monstrous, unethical ponzi scheme that utterly fails to live up to what was described in the original whitepaper. Instead of peer to peer cash-like payments, it is now being used for speculation, as "digital gold", with holders of Bitcoin egging others on to buy Bitcoin at increasingly ridicolous prices, with little to no regard for those who will be left holding the bag when the music stops."

"What's the trade? You buy GBTC in the daily offering and short free-trading GBTC. Six months later, it all nets out and you are left with your profits. Of course, you take on a multitude of operational risks like securing term borrow and balance sheet risk if the spread blows out, but the pros know how to handle that. You can recycle your capital twice a year and on an unlevered basis, even after paying borrow fees, you're making north of 40% a year (FYI-I left out a few other steps and a bunch of legal wrinkles to overcome)."

"I am realizing Lebanon is in a situation where there is an implied currency control but the government cannot control bitcoin which is a good thing because people have no trust and the ability of the central bank which really causes the ponzi style collapse and the bitcoin does not have that," said Taleb.

CoinMetrics has found extreme wealth centralization among many top stablecoins, with at least 80% of the total capitalization for five top stable tokens being held in less than six accounts. And most at least 20% of transfers made using most stablecoins are valued at less than $100, showing significant stable token adoption as a means of payment. The report also found that more than 40% of transactions made using the Paxos Standard Token are directly linked to a single multi-level marketing, or MLM, Ponzi scheme.

Indonesia's Financial Services Authority has prohibited financial firms from using, marketing, and/or facilitating crypto-asset trading. In addition, the financial regulator reminded the public to always beware of fraudulent Ponzi schemes under the guise of crypto. The OJK does not supervise or regulate crypto-assets. The regulation and supervision of crypto assets in Indonesia are carried out by the Commodity Futures Trading Authority and the Ministry of Trade.