As reported by the Sunday Times, the CEO of Ryanair, Michael O’Leary, commented on news about a Ponzi scheme that is promoted on several questionable newspapers, and which refers to the already known ‘Bitcoin Lifestyle‘ scam, saying:
“I have never, and would never, invest one cent in Bitcoin, which I believe is equivalent to a Ponzi scheme.”
The words of the CEO of Ryanair leave no room for interpretation, explaining not only how he did not invest a penny in Bitcoin, but that Bitcoin itself is a Ponzi scheme, which is absolutely not true.
Why Michael O’Leary is wrong about Bitcoin
Many of the scams in this sector are part of Ponzi schemes, named after an Italian immigrant, Carlo Ponzi.
The scamming system promises the victim significant returns on investment, which convinces them to invest in the project.
The typical elements of this system are:
- The designer of the scheme, which can be a person or a company, promotes the financial product;
- The promise of a really important growth rate or ROI that can reach 100% of the investment made, thus doubling the amount that the victim deposits;
- The product is offered to everyone through a simple website;
- A word of mouth referral system where people can sign up to the platform and buy a phantom package. This creates a pyramid scheme so that those who sign up will always have to find other users so that the system doesn’t collapse.
With these elements, it is easy to understand how Bitcoin is far from a Ponzi scheme, because:
- First of all, there is no company or someone who wants to make a direct profit, while in Ponzi schemes the money goes directly into the coffers of a company;
- Nobody guarantees the return on the investment made, albeit considering the limited supply of bitcoin it is understandable how the concept of scarcity can be applied in the long term, leading to a price increase;
- The asset does not have to be bought, as it can be mined and anyone can do so without any limit whatsoever;
- Each address is separate and therefore there is no profit from those who recommend investing in bitcoin,
- BTC is a free asset and anyone can buy as much as they want, even just 1 satoshi.
Unfortunately, criminals often use the names of famous people to promote scams of all kinds, as happened in the recent attack on Twitter.
So, no matter what the CEO of Ryanair may say, Bitcoin is not a scam and saying it is only misleading information.