Bitcoin is often compared to a pyramid scheme; however, there are several key differences between the two that prove that bitcoin is not a pyramid scheme. For one, a pyramid scheme requires an initial investment and promises returns based on the recruitment of new members, while bitcoin does not have an initial investment.
Furthermore, in a pyramid scheme, the returns are not based on any underlying product or service; in contrast, the return on investment for bitcoin comes from the appreciation of the cryptocurrency. Finally, pyramid schemes are illegal, while bitcoin is not.
While there are some similarities between bitcoin and a pyramid scheme, the key differences prove that bitcoin is not a pyramid scheme. Bitcoin does not require an initial investment, the return on investment comes from the appreciation of the cryptocurrency, and it is not illegal.