Indian Politician Thinks Bitcoin Is a Ponzi Scheme

A recent statement made by one of the Indian politicians shows the lack of awareness about the digital currency among many. The politician in question is Kirit Somaiya, a Member of Parliament from the ruling party. He was reported calling Bitcoin a “hypothetical currency” and a “Ponzi scheme”.

Bitcoin is one of the first and most widely used cryptocurrencies in the world. The decentralized digital asset is known to have both the properties of money as well as assets. With no central governing body, there is no single person or a group that will benefit out of the success of cryptocurrency, except for the whole community. But the lack of understanding of the cryptocurrency has got many trying to draw parallels between Bitcoin and Ponzi schemes.

The use of Bitcoin in India accelerated last year after the government decided to demonetize high-value currency notes overnight without having proper measures to ease the transition. The government’s ill-conceived decision had a widespread effect on the population, reducing trust and confidence in India’s legal tender. Many realized the drawbacks of centralized currency at this moment, which in turn led them to opt for Bitcoin as a safer alternative.

Kirit Somaiya was quoted by the publications saying,

“”The use of bitcoin, a hypothetical currency, is increasing at a rapid speed in India as well as in the world. Experts have expressed concern that Bitcoin is a pyramid Ponzi-type scheme.”

He has called for the country’s regulatory bodies — the Reserve Bank of India and the Securities Exchange Board of India to introduce regulations to control Bitcoin related activities.

This is not the first time someone has called the cryptocurrency a Ponzi scheme. There are few Ponzi and pyramid schemes that make use of Bitcoin and other cryptocurrencies. At the same time, there are plenty more that operating using traditional fiat currencies as well. But that doesn’t make the cryptocurrency itself a Ponzi scheme. The price of Bitcoin is controlled by actual demand and supply of the digital currency which is indirectly controlled by the whole community and painting the cryptocurrency bad is neither correct nor good.

Ref: MoneyControl | Image: NewsBTC