In a recently published op-ed, the chairman of China’s Blockchain Service Network (BSN) Development Alliance, Shan Zhiguang, and a colleague insisted that cryptocurrencies are “unquestionably the largest Ponzi scheme in human history.” However, they have stated that “because of virtual currency, the value of blockchain technology should not be ignored.”
Virtual currency is “unquestionably the largest Ponzi scheme in human history,” according to executive director He Yifan and chairman Shan Zhiguang of the Chinese Blockchain Service Network (BSN) Development Alliance. Additionally, they asserted that this Ponzi scheme has changed over time and is “no longer just about cash.”
The BSN chairman and his colleague attacked virtual currency and bitcoin in a recent opinion piece that was published by the People Daily Online newspaper by pointing out that at least 90% of the 100 richest people in the world have “badmouthed” it. The pair also explains the factors that led them to share a negative opinion of bitcoin or other cryptocurrencies. They wrote:
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.
The BSN chairman and Yifan use dogecoin as an example elsewhere in the article to demonstrate how just one powerful person can manipulate or control the value of a virtual currency.
Therefore, it is simple to comprehend how Musk can transform his hands into a cloud to represent Dogecoin and a downpour to represent rain. The pair asserted that the price of virtual currency can be made to fall with just a tweet.
Zhiguang and Yifan argued in their opinion piece that blockchain technology, which underpins the majority of cryptocurrencies, “should not be ignored,” despite their position on virtual currency. To ensure that the blockchain plays “a huge role in various application fields,” the duo suggested that regulation technology is still needed.