The chairman of China’s Blockchain Service Network (BSN) Development Alliance Shan Zhiguang, and his colleague, insisted in a recently published op-ed that virtual currency is “undoubtedly the largest Ponzi scheme in human history.” However, they have said the “value of blockchain technology should not be ignored because of virtual currency.”
This type of Ponzi scheme can be classified as ‘equity-type,’ and it has three main characteristics: first, it is based on equity that can be denominated; second, the equity can be traded and circulated; finally, and most importantly, this equity is not Associated with any asset, productive labour, or social value, but is entirely fictional.
According to the duo, the equity in virtual currency equity Ponzi schemes is not linked to any real asset or labor hence the risk is “close to infinity.” When looking at the characteristics of virtual currency, Zhiguang and Yifan said it is apparent that these are consistent with those of a so-called equity Ponzi scheme.
Elsewhere in the article, the BSN chairman and Yifan use the example of dogecoin to show how just one influential individual can manipulate or control the value of a virtual currency.
“So it’s easy to understand that Musk can turn his hands on dogecoin as a cloud, and turn his hands into a rain. Just sending a tweet can make the price of virtual currency flat,” the duo claimed.
Despite their stance on virtual currency, Zhiguang and Yifan insisted in their opinion piece that blockchain technology, which anchors most cryptocurrencies, “should not be ignored.” The duo, however, suggested that regulation technology is still needed to ensure the blockchain plays “a huge role in various application fields.”
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