Pyramid trap? Pyramid quagmire? IDK, but "scheme" implies something I don't think is there - control.
People buy it because they expect the price to go up. The price goes up so more people buy it expecting further gains. The fundamentals arguably don't justify such a high price, and so you have a speculative bubble. Eventually, the bubble will pop and most investors will lose money.
I suspect BTC is a bubble because everything it does can be done better by other things. I also suspect that Lightning is fundamentally insecure. If you analyse the true intentions of the people who use it, there's no sober purpose; they just want it because they expect the price to go up. It's not about helping the developing world; because if it was, then there are better but more boring ways of doing it. Hence, it's a bubble built from speculation.
But similar things can be said about many things, and some commodities are able to sustain their bubbles for decades or centuries. Gold is going strong for millennia, with a price far exceeding its practical value. BTC probably won't last that long, but unless it's disrupted by legislation it might still have decades left in it.
The bitcoin network is extremely valuable. Trustless money is important in a world where all other currencies are created, controlled, and manipulated by governments. We know humans are prone to make poor choices, commit crimes, etc. Especially governments. Why do we allow them to create money when and how they want?
Some* people buy it because they expect the price to go up.
Other people are switching to bitcoin because it is better money than their local currency.
> everything it does can be done better by other things
Like what? Trustless transfer of money governed by a protocol that is highly decentralized and secure.
USD, EUR, GBP and CHF are less volatile. The countries that manage them all have good credit ratings. Compare to BTC which has lost >55% of its value in the last 6 months. And you're calling that a currency?
Using safe fiat, or even gold, would be the "boring" solution because it doesn't go up in value much. If anything, it slowly loses value, but nothing among those 4 beats the >55% / 6mo drop of BTC.
If you're concerned about inflation, a finance expert might give you a "boring" lecture on how to counter it.
Maybe there should be a guide to the "boring" solutions to the problem that crypto supposedly solves in an "exciting" and (for now) lucrative way.
The phrase is "financial market"
Edit: I was being overly general with the term "pyramid scheme"
And does paper fiat have intrinsic value?
Bitcoin is trustless money. It's mindblowingly amazing that we now have trustless money. We've never ever had that before. That is the value.
Yes, to the extent that people with guns will enforce its value (as I mentioned above).
> Bitcoin is trustless money. It's mindblowingly amazing that we now have trustless money. We've never ever had that before. That is the value.
You'll have to forgive me if I disagree that "mindblowingly amazing" constitutes "intrinsic value".
100% agree. I did not mean to argue that the value is in the fact that it is amazing. The value is in the trustless money network.
Bitcoin requires you to trust at least three things: Others will exchange it with you. Governments will not make holding/using it illegal. It will not lose it's value overnight. There is absolutely no reason to believe these will continue to be true.
I believe that bitcoin began as a straightforward "pump and dump" scheme, dressed up in a techno-libertarian narrative to appeal to its intended marks, young tech males with disposable income. As the size of the market has grown, I suspect the original cartel holds a smaller percentage of the outstanding supply, but I'll bet it's still enough to move the market deliberately when they choose.
It's trustless, sound money and therefore better than my bullshit fiat.