Indian Government: Bitcoin Ponzi Scheme: What’s The Weight?
An Indian politician coming from the Bharatiya Janata Party, Kirit Somaiya has recently described the Bitcoin as a Ponzi Scheme and also claimed that the self-regulation is not permitted at all. On the other hand, the Indian government appeared to disagree with Kirit Somaiya’s alleges and is looking to regulate the Bitcoin.
What is the Ponzi Scheme? Let’s look back… The term Ponzi Scheme is frequently used by the conventional economists and also the politicians to describe the Bitcoin. But the utilization of the term to further explains the Bitcoin’s structure which demonstrates a high level of such incompetence and a significant lack of economic and financial knowledge.
Then what is Bitcoin? By literal definition, a Ponzi Scheme is a form of a fraudulent in which an operator pays returns to its initial investors by the means of harvesting the capital from later investors. The Bitcoin is a decentralized cryptocurrency which operates together with the absence of an operator or even a moderator. There are no investors are promised of quick returns or are scammed by its operators. The fact that it is merely is a decentralized peer-to-peer network which is established to operate as digital cash and at this generation as a digital gold.
It is quite evident that Kirit Somaiya had a little to no understanding of the structure of neither Ponzi Schemes nor the Bitcoin at all. He even presented an extremely flawed argument through comparing the self-regulation to a Ponzi fraud, as he stated that it is illegal. How can a private or a quite few numbers of individuals just stay behind the curtains that can develop their own currency? And this particular self-regulation is nonsense. In a Ponzi Scheme, all such arguments such as the multi-level marketing or the MLM and a pyramid structure have been floated.
For all intents and purposes, Kirit Somaiya intended to state that the self-regulation must not be permitted and that the populace has no right to utilize a digital currency such as the Bitcoin; and that is not developed or established by the Central Banks. However, his comparison of the Bitcoin to a Ponzi Scheme was flawed by every possible means, as the Ponzi Schemes are not even self-regulated, and they are regulated by a closed group of operators.
The Indian government and its financial regulators are taking a different approach from Kirit Somaiya. Several of the regulators have an actual understanding of the Bitcoin and its implications for the global economy and the supposed role of the regulators in enabling the local Bitcoin industry to expand and fully develop. Earlier this week, it has been reported that the Inter-Disciplinary Committee within India’s Ministry of Finance is planning to provide a set of regulatory frameworks for the Bitcoin users and the businesses in the region and moving a step forward to the Bitcoin legalization in India.
Various of the Bitcoin exchanges and businesses which include the CoinSecure had praised the efforts of the financial regulators in coming to the realization of the Bitcoin’s impact and influence on the economy and the finance industry.