Chinese Blockchain Co-Founder Calls Bitcoin a Ponzi Scheme

Chinese Blockchain Co-Founder Calls Bitcoin a Ponzi Scheme

Chinese blockchain co-founder -platform called bitcoin a ponzi scheme

Unregulated cryptocurrencies, including bitcoin, are “the largest ponzi scheme in human history”. He Yifan, CEO of Red Date Technology and co-founder of BSN, expressed this opinion in his article for The People's Daily newspaper.

He drew a parallel with a fraudulent scheme, pointing out the lack of liquidity and value, the presence of insider trading and security gaps, as well as a constant influx of new investors.

“[…] the work of all cryptocurrency projects is completely based on marketing, and technical investments are insignificant,” the author of the article noted.

In support of his position, the head of Red Date Technology cited the collapse of the Terra ecosystem:

“There are many opinions about why LUNA and UST collapsed in an instant, but one the point that not many people have mentioned is that they combine two types of Ponzi schemes based on cash and stocks intertwined with each other.”

Yifan also mentioned Elon Musk and Dogecoin. In his opinion, a “random tweet” by a billionaire could cause the price of the meme-cryptocurrency to “rise three feet off the ground.” However, he acknowledged that with proper oversight by the authorities, part of the market may not be considered as a financial pyramid.

“USDC or USDT are payment currencies, not speculative assets. Once they are fully regulated, they will be fine,” the article states.

The M2E and P2E models were criticized by Yifan. In his opinion, the developers have created a “trap” for users for the sake of the constant growth of the audience. Earlier, one of the popular representatives of the sector – STEPN – announced the termination of service to users from China.

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The head of Red Date Technology emphasized that he is not a fan of bitcoin and similar cryptocurrencies. In his article, he recalled that digital assets were criticized by Microsoft founder Bill Gates and billionaire investor Warren Buffett.

In a comment to Cointelegraph, Yifan added that BTC-legalizing governments like El Salvador are “in serious need of basic financial education.”

“Otherwise, they put entire countries at risk, unless their original intentions were to create government crypto trading platforms and scam their citizens,” the source said.

In June, Salvadoran President Nayib Bukele advised investors not to worry about the quotes of the first cryptocurrency. According to him, investments in digital gold will grow “immeasurably” after the end of the bear market.

Against the background of the collapse of bitcoin on June 13, the country's “paper” loss from BTC held in the state fund exceeded $46.1 million.

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Recall that in December 2021, the Chinese authorities announced that the metaverses and NFTs could turn out to be bubbles, Ponzi schemes, or other types of financial fraud.

For how the BSN works and why the Chinese government needs it, read the ForkLog exclusive :

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