Today i read @clayop post about Is Bitcoin a Ponzi too? which inspire me more and i decide to explain little more the Ponzi scheme and resolve the conclusion as some confusion are yet set in some Steemit community minds.

What is Ponzi scheme?

First of all put on mind that what is ponzi and how it works.

A ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by the new investors, rather than from profit earned by the operator. Operators of ponzi schemes usually entice new investors by offering higher returns than other investment programs,in the form of short term return that are either abnormally high or unusually consistent.

The perpetuation of the high returns requires an ever increasing flow of money from new investors to sustain the scheme.

Now have a look if that above statement fits to Steemit or Bitcoin.

Does Steemit or Bitcoin have central authority?No

Does Steemit or Bitcoin pay returns to its investors? No

Does Steemit or Bitcoin require an ever increasing flow of money to sustain it by new users?No

Steemit or Bitcoin is now cleared are not Ponzi schemes, It's a true innovation in computer science.

@clayop do his best to convey the better easy and authentic statement to steemit users but some confusions are still in users minds as i have read the comments on that post.

but as in above ponzi definition maximum confusion will be removed from my steemit community minds but may some points still in their minds.

As every one know Bitcoin is new type of monetary system based on mathematics and rare numbers,That's why it's a game changer. same like Bitcoin Steem dollars or STEEM are also a rare numbers currency.

That's why 5 to 10 million investments to bitcoin start up every week and now in steemit thousand of people joining this great crypto currency social reward community.

In crypto currency neither the product(product value) nor the money(financial value) come in nor out the system. try to understand the below simple equation.

Lets say person A has a product X,person B has product Y and person C has product Z, here we have initial scenario T0

A X 0

B Y 0

C Z 0

T1- A buys y from B for 1 unit of money

AXY-1

B 1

C Z 0

T2-B buys Z from C for 1 unit of money

A X Y-1

B Z 0

C 1

T3- C buys X from A for 1 unit of money

A Y 0

B Z 0

C X 0

You can observe that neither the product (product value) nor the money(financial value) comes in nor out the system.

Let say you mind gold, each time you bring new gold into the system, all the money is getting a little more valuable.

it mean the value of the money is not something everybody just agree on.it represents real value and sometime it is backed by other values.There are a lots of currency today that is backed by dollars, i mean if people don't trust that currency ,they can trade for dollars(direct value x currency),so their value float together with dollar value.The value that money have today is based in the market as a whole.

That is what makes Bitcoin,Steem dollar and other crypto currency weak and strong.

The major difference between Bitcoin and Steem is

Bitcoin Rewards miner only while Steem rewards contents creators too.

The total supply of Bitcoin is increased by 4.3% while Steem supply increasing trend is about 317% in a year.

Conclusion:

Bitcoin or Steem are not the ponzi schemes. Steem is a social rewards platform that rewards the content creators and curators through redistributions from STEEM and STEEM POWER holders,

I try my best but i have little knowledge as i compare myself with the Steemit stars so if i have put any wrong in my post please post it in comments for improvement as whole.

What is Ponzi scheme? Bitcoin or Steemit are ponzi scheme?

What is Ponzi scheme?