An associate participant of the University of Oxford’s Faculty of History – Robert McCauley – has asserted that notwithstanding considerable promotion of Bitcoin as the most prominent asset during 2021, the primary cryptocurrency is even notorious than a Ponzi. In an article published on the behalf of the Financial Times, it was noted by McCauley that a comparison between Ponzi and Bitcoin is an underestimation because both of them do not share a similar endgame as well as a severely negative-sum.
The scholar recommended that the investors having the intention to buy Bitcoin do not have adequate guidance for making income, and this type of investment does not have anything in return. As per McCauley, there are no fundamentals set by Bitcoin regarding the investors until they sell the holdings thereof to someone else. In addition to this, he anticipated that the collapse of Bitcoin would turn out to be more devastating than the Ponzi.
Stablecoins might participate in Bitcoin crash
It is noteworthy that he referred to the crash of dollar-pegged stablecoins as it would be a significant weak point in the case of Bitcoin. McCauley suggests that the stablecoins’ collapse with a considerable market size can conveniently disrupt the whole crypto ecosystem. He added that the funds in an unregulated market have been traded as the substitute for dollars with the assets that are safe and match the outstanding liabilities thereof. As per the scarcity of disclosure and regulation, it is easy to foresee a large stablecoin opposition, as mentioned by McCauley.
Also read:He moved on to state that the cash flow of Bitcoin is like that of a pump-and-dump project having its foundation laid on a Ponzi. The scholar pointed out that the investors waste their money on worthless Bitcoin in the hope to make a profit. Otherwise, McCauley considers that the pumping and dumping cycle of Bitcoin will go on. As a result, the endpoint of bitcoin would be dissimilar to the Ponzi.
A benefit only for miners
He emphasizes that a handful of people are benefited from the ecosystem of Bitcoin. In his viewpoint, miners are the only people who befit that category. Until the operations of the network, miners will acquire guaranteed profits. Due to the anonymity of Satoshi Nakamoto, the lost funds of people cannot be pursued as no one is centrally controlling the network.
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