Why do people say Bitcoin is a pyramid scheme?
Answer: Because people who own bitcoin (or PWOBs) are so often found trying to convince other people who don’t own bitcoin that they should.
And because it’s easy to see there’s a self-serving incentive in play which might explain why — PWOBs make money whenever more of the world decides it wants to buy bitcoin.
As new people buy into the game, the whole structure gets lifted higher and higher, making the earlier buyers richer and richer. And, once recruited, the new PWOBs are often found trying to convince other people who don’t own bitcoin that they should.
This repeating pattern makes a pyramid — a largely pointless-seeming structure into which an enormous amount of work has been poured, intensively mining and placing many blocks, with a mysterious guy at the centre of the whole thing.
Undeniable Usefulness
If it were an undeniably useful product that the new recruits were buying into — let’s say Photoshop or Spotify — you might call it a viral loop.
