Common Bitcoin Concerns and Misconceptions

Bitcoin has captured global attention, but with that comes a lot of fear, uncertainty, and doubt. Many of the same objections to Bitcoin have been raised since its earliest days, often fuelled by media headlines or misunderstandings. Here we address the most common concerns one by one, showing why these criticisms are often misguided or overstated. Bitcoin is a new and evolving monetary technology – understanding it fully is the first step to making informed opinions about its role in our future.

Table of Contents

 

“Bitcoin Uses Too Much Energy”

Estimated annual electricity consumption by Bitcoin (blue) vs. the banking system (gray) and gold mining industry (gold), in TWh per year. Bitcoin’s energy usage is less than half of banking’s and gold’s.

Bitcoin's energy use is less than half of banking, gold sectors

It’s true that Bitcoin’s network consumes energy – but this consumption is deliberate and a key factor in its design, not “waste.” In fact, Bitcoin uses far less electricity than the systems it’s often compared to. The entire Bitcoin network draws around 114 TWh per year, whereas the banking sector uses about 264 TWh and gold mining about 241 TWh annually​.

In other words, Bitcoin consumes less than half the energy of either the global banking system or the gold industry. The energy that Bitcoin does use is what makes the network robust and secure – miners expend electricity to validate transactions and safeguard the ledger, which in turn deters attacks by making them economically unfeasible​. This proof-of-work mechanism is the reason Bitcoin has never been hacked, and why no one can counterfeit or alter past transactions.

Importantly, Bitcoin mining is increasingly powered by renewable or otherwise wasted energy. Recent research indicates roughly 61% of the energy used in Bitcoin mining comes from renewable sources​. Miners are economically incentivised to seek the cheapest power, which leads them to remote areas with surplus wind, solar, hydro, or geothermal energy that would otherwise be unused. In places like Texas, Bitcoin miners are even helping balance the grid by absorbing excess energy during off-peak times and shutting down during peak demand​. This flexibility can help finance new renewable projects and stabilize electrical grids.

Why Bitcoin Mining is Indispensable Climate Action – Batcoinz

Source: https://batcoinz.com/why-climate-action-doesnt-just-benefit-from-bitcoin-mining-it-requires-it/

Moreover, mining innovation is transforming potential pollutants into power. Specifically, methane‑based Bitcoin mining—using gas flared from landfills or oil wells—can cut GHG emissions by 50–63% compared to conventional flaring. As a result, a single 1 MW methane‑powered Bitcoin operation can remove up to 800 tonnes of methane annually, delivering greenhouse‑gas reductions comparable to those of a 140 MW solar farm. Given that the global Bitcoin network requires 20 GW of generation capacity, this approach therefore offers substantial potential for large‑scale methane mitigation.

Looking ahead, climate researcher Daniel Batten projects that, by scaling the use of stranded methane—gas that would otherwise be vented or flared—Bitcoin mining could become net carbon‑negative by 2028. In other words, Bitcoin is driving investments in clean‑energy efficiency and infrastructure in ways that legacy industries simply cannot match.

“Bitcoin Is Only for Speculation”

Sceptics often claim that Bitcoin has no real use and is bought only by speculators hoping to “get rich quick.” In reality, every economic decision involves some speculation – whether buying a house, gold, or even holding euros in a bank account, one is speculating on the future value of those assets​. Singling out Bitcoin as “pure speculation” ignores its growing utility and unique properties. Yes, traders speculate on Bitcoin’s price, but speculation also provides vital market liquidity and price discovery, which all maturing assets go through​. If short-term speculators were the only force behind Bitcoin, it would have collapsed long ago like many fad investments. Instead, Bitcoin has grown in resilience through multiple cycles, continuing to reach higher values over time, suggesting an underlying strength beyond mere trading mania.

In truth, many people adopt Bitcoin for its long-term benefits: as a secure store of value, a censorship-resistant payment network, and a hedge against currency debasement. Unlike euros or other fiat currencies that can be inflated at will, Bitcoin has a fixed supply of 21 million. No central bank or government can dilute it​. This makes it attractive for those looking to preserve purchasing power over years and decades, not just day-trade for profit. Bitcoin is also global and permissionless – anyone with an internet connection can use it to send value, which is a lifeline in places where the local financial system is unstable or untrustworthy. For example, people in economically distressed countries use Bitcoin to protect their savings from hyperinflation or to remit money across borders quickly and cheaply, something traditional banking often fails to provide. In developed countries, some view Bitcoin as “digital gold,” an asset outside the traditional financial system that protects their savings from inflation.

Far from being a get-rich-quick scheme, there’s a popular saying in the Bitcoin community: “Bitcoin isn’t about getting rich quick, it’s about not getting poor slowly.” This reflects a mindset of saving for the future in a form of money that can’t be debased. Over 16 years, Bitcoin’s network effect and utility have driven a remarkable increase in value – an outcome of growing adoption and trust. Bitcoin’s price rises because millions of rational participants recognise its fundamental innovation in monetary technology. Ultimately, Bitcoin’s resilience and “immense staying power”​ show that it has moved well past the stage of being a novel gamble – it is here to stay, and its uses are expanding.

“Bitcoin is Used by Criminals”

Because Bitcoin can be sent pseudonymously without the need for a bank to approve the transaction, some propagate the idea that it’s a paradise for criminals and money launderers. The data shows the opposite: illicit activity is a tiny fraction of Bitcoin usage, and in fact cash and the traditional banking system are still number one for criminality. All Bitcoin transactions are recorded on a public ledger that anyone can inspect, making it far more transparent than cash. This transparency means authorities find it easy to track and trace illicit funds. In recent years, police forces around the world used blockchain analysis tools to catch high-profile criminals – something virtually impossible with untraceable paper money. 

According to Chainalysis, a leading blockchain analytics firm, only 0.24% of cryptocurrency transaction volume in 2022 was associated with any illicit activity​. In other words, 99.76% was lawful. For comparison, the estimated share of global fiat money involved in illicit activity is 2–5% (in the trillions of dollars)​ – orders of magnitude higher. Criminals, it turns out, strongly prefer cash and banks over Bitcoin when breaking the law.

Map Source

Real-world figures bear this out clearly. In 2023, an estimated $3.1 trillion in dirty money flowed through the traditional financial system globally (funding everything from drug cartels to human trafficking)​. By contrast, the total illicit cryptocurrency transactions that year were measured in the low tens of billions​ – a rounding error next to fiat-based crime. Bitcoin’s ledger being public is a feature, not a bug, when it comes to crime prevention: it creates a digital paper trail that agencies can follow. Europol and the FBI have repeatedly noted that using Bitcoin for crime is high risk for criminals – blockchain transactions are permanent and thus leave a permanent footprint. Sophisticated analytic tools are used regularly to trace such transactions. Indeed, there have been numerous cases of authorities seizing Bitcoin from criminal enterprises by tracing transactions (for example, the FBI’s recovery of Bitcoin from the Colonial Pipeline ransomware attack in 2021). Meanwhile, physical cash remains essentially untraceable and is the medium of choice for money laundering and illicit trade by a wide margin​.

It’s also worth noting that as Bitcoin has matured, the legal use cases vastly eclipse illicit ones. Everyday people, as well as respected companies use Bitcoin and related technologies for legitimate purposes: merchants accept it for payments, charities use it to reach donors globally, and activists use it to circumvent authoritarian capital controls. The growth of compliance tools and regulated exchanges has further shrunk the space for criminal misuse. No one can “erase” a Bitcoin transaction or hide it from the network – which is why some criminals have actually been caught years after the fact. In short, while Bitcoin can be used by bad actors (just like any form of money), doing so is risky and cumbersome. The myth of Bitcoin being a haven for criminals is not supported by the evidence. By volume, criminals still vastly favour the old-fashioned banking system and cash, because Bitcoin is too transparent and traceable to be their first choice.

“Bitcoin Is Not the Best Cryptocurrency”

Since Bitcoin was created in 2009, millions of fly-by-night cryptocurrencies have emerged, and those who have vested interests in those projects, market them as being faster than Bitcoin and therefore will overtake Bitcoin. This “Bitcoin is outdated” argument misunderstands what Bitcoin is trying to do and what makes it unique. Bitcoin isn’t a tech gadget or social network that can be easily replaced by a better version – it’s a foundational monetary protocol and network, much like the underlying protocols of the internet. The Bitcoin protocol communicates via the application layer on the TCP/IP stack, enabling the internet to have finally have native currency, a view shared by Jack Dorsey (founder of Twitter and Block) and Marc Andreeson (founder of Netscape). Stability, security, and broad adoption are far more important for a base money than having the flashiest bells and whistles. Bitcoin was deliberately designed to prioritise being the most secure, decentralised, and immutable form of digital money – and it still does that job better than any alternative​.

Competing coins (often called “altcoins” or even “memecoins”) may advertise higher transaction speeds or smart features, but they always sacrifice decentralisation or security to achieve those. 

Blockchain Trilemma — Decentralization, Security & Scalability

Many are effectively experimental startups run by small teams or backed by venture capital, whereas Bitcoin grew organically and has no central authority. With Bitcoin, there was no pre-mine or founders’ reward – Satoshi Nakamoto released it and disappeared, and no one controls it. This origin and Bitcoin’s 16-year track record has fostered a culture that fiercely resists changing the fundamental rules (especially the 21 million supply cap). That makes Bitcoin exceptionally credible as a sound money – people trust that no insiders will suddenly inflate the supply or change the system for their own benefit​. Newer cryptocurrencies, by contrast, often have leaders or companies that can and do alter their rules (or even censor transactions), meaning they function less like public money and more like highly experimental fintech testbeds. Furthermore, according to CoinGecko Research, 50% of altcoins are already dead, the rest are following the same trajectory.

It’s also vital to recognise Bitcoin’s powerful network effects. It is by far the most widely held and used cryptocurrency: Bitcoin still accounts for about 60% of the entire crypto market’s value​. It has the largest and most decentralised network of miners and nodes, making it extremely resilient. Competing coins might offer niche innovations, but they are usually less battle-tested and far more centralised (many rely on a foundation or small group for maintenance). History has shown that almost all “Bitcoin killers” fade away and almost never gain substantial and sustained market share against Bitcoin. Bitcoin’s simplicity (often criticised as lack of sophistication) is actually a strength: by doing one thing well – being a secure, scarce digital asset – it avoids the attack surface and complexity that have brought down many other projects.

Finally, Bitcoin can improve and does evolve, though cautiously. Innovations can be built on top of Bitcoin (so-called Layer 2 solutions like the Lightning Network) without changing the robust core protocol. This layered approach is similar to how the internet scaled – you don’t replace TCP/IP every time you need a new feature; you build on it. Likewise, rather than abandoning Bitcoin for a shiny new coin, developers have created solutions like Lightning, Ark, Liquid and Fedimints to enable instant, high-volume payments while Bitcoin’s base layer remains a rock-solid settlement network. No other cryptocurrency has achieved Bitcoin’s combination of scarcity, security, decentralisation (Blockchain trilemma), and global recognition. 

It’s telling that even regulators and institutions often separate Bitcoin from the rest – the U.S. government has officially classified Bitcoin as a digital commodity, acknowledging it as fundamentally different from the thousands of speculative tokens out there.

“Bitcoin Will Undermine the Euro”

Some worry that Bitcoin’s rise means chaos for traditional currencies like the euro, perhaps even threatening the stability of fiat money. However, Bitcoin is better viewed as a complementary alternative rather than an immediate replacement for national currencies. Think of the early internet: it didn’t replace postal mail overnight, but it introduced a new paradigm that eventually transformed communications. In much the same way, Bitcoin has emerged in response to vulnerabilities in the existing financial system, but it’s not going to make the euro obsolete in the near term. Instead, Bitcoin offers a neutral, global option alongside the euro – especially valuable as a hedge or escape hatch in scenarios where fiat systems are faltering.

It’s important to recognise why Bitcoin came about. Modern fiat currencies, including the euro, rely on trust in central banks and governments to manage money supply. History has shown that this trust can be shaken – for example, through inflationary policies or financial repression. The euro itself, while relatively young, is not immune to these pressures: Eurozone citizens have seen savings eroded, in some countries they have faced bank freezes, or are now warily watching proposals for central bank digital currencies, which could give authorities unprecedented control over private spending. 

Bitcoin arose as an alternative in an era of quantitative easing and mounting debt, with a monetary policy that no central authority can change. If the euro were perfectly sound – no supply inflation, no risk of bank bail-ins or political misuse – then Bitcoin’s appeal would indeed be more limited. But in reality, the euro and other fiat currencies do face self-inflicted structural challenges: since 2008, trillions in new euros have been created to manage crises, and inflation in Europe hit multi-decade highs in recent years. Bitcoin’s fixed supply of 21 million coins makes it immune to inflation by design, which is why many view it as digital gold or a “safety net” for the long term.

Rather than undermining the euro, Bitcoin could serve as a pressure release valve and catalyst for positive change. Its presence encourages competition and innovation in the monetary space. For instance, the European Central Bank’s exploration of a digital euro (CBDC) is arguably spurred by the rise of Bitcoin and Diem/Libra (Facebook’s attempt to create money)  – an attempt to modernise fiat to keep pace with public expectations. But a key difference remains: a digital euro would still be centrally controlled, whereas Bitcoin is decentralised and permissionless. In practice, Europeans can use Bitcoin as a store of value or for cross-border transfers without undermining the day-to-day role of the euro for pricing and wages. Over time, if Bitcoin continues to gain traction, it might impose discipline on central banks (as gold once did) by providing people an opt-out. Coexistence is likely: Bitcoin can be the long-term savings vehicle and inflation hedge, while euros handle local transactions and government functions. For consumers and policymakers, this can be a win-win – increased financial sovereignty for citizens, and an impetus for authorities to maintain sound policies to keep the euro attractive.

In summary, Bitcoin doesn’t spell doom for the euro; it shines a light on the euro’s weaknesses and offers a technologically advanced complementary currency. European governments could even benefit by embracing Bitcoin’s innovation – for example, attracting investment and tech talent, or using Bitcoin’s growth as an opportunity (as some forward-thinking jurisdictions are doing). Like the internet and fax machines, Bitcoin and fiat might operate in parallel for quite some time. If anything, ignoring Bitcoin carries greater risks: countries that lag behind may miss out on the economic opportunities of this new monetary network. Meanwhile, those that thoughtfully adopt Bitcoin can enhance the financial stability and freedom of their citizens, without “destroying” their national currency. In Ireland’s context, recognising Bitcoin as a parallel option could ensure we’re not left behind in what many see as the next evolution of money.

“Bitcoin Doesn’t Scale and Is Too Slow”

Bitcoin’s on‑chain throughput—roughly 5–7 TPS with a 10‑minute block interval—is slow by design, not by accident. The small block size and fixed timing keep node requirements modest, preserve decentralisation, and deliver near‑absolute settlement finality. By contrast, under SEPA (and most legacy rails) payees must wait an 8‑week window—for both final settlement and refund rights—before funds become irrevocable. Once a Bitcoin transaction is confirmed, it cannot be clawed back, making it paradoxically faster at delivering irreversible settlement than any legacy payment network.

This apparent limitation is actually a core security feature. Bitcoin’s consensus mechanism enforces both its fixed monetary supply and the capacity within each block, rather than leaving those decisions to any single authority. By making block space a scarce, market‑priced resource, Bitcoin ensures that every transaction competes for inclusion—optimising capacity use and safeguarding decentralisation over raw speed.

Data Shows That Bitcoin's Lightning Network Has Solved The Scalability Problem

Once we accept that base‑layer throughput is intentionally constrained, scaling naturally occurs via layers. Everyday payments flow through the Lightning Network and similar layer‑2 protocols, where transactions are instant and pennies‑cheap but ultimately anchor to the base chain for security. One on‑chain transaction can batch many Lightning settlements, letting the base layer operate as a global clearing house while retail volumes stay off‑chain. Raw TPS is therefore the wrong yardstick; what matters is whether the system can handle billions of economic events without sacrificing decentralisation or trustlessness. By combining a rock‑solid settlement layer with high‑speed payment layers, Bitcoin already does—and the capacity is only expanding.

Further reading: Bitcoin Is Not Too Slow – Parker Lewis 

“Bitcoin Is Too Volatile to Be Useful”

There’s no denying that Bitcoin’s price in euros fluctuates – sometimes dramatically. Critics argue that this volatility makes it impossible to use as a currency or a reliable store of value. It’s true that Bitcoin’s price swings can be wild in the short term; however, volatility is natural in the early phase of any new asset as it finds its market value, and Bitcoin’s volatility has been trending downward as it matures​. Early on, when Bitcoin was very small, even modest buying or selling could move the price a lot. Today, with a market capitalisation in the trillions of euros, it’s more stable than in its infancy, and as it grows further, it will likely stabilise even more relative to other things.

Why do we expect volatility to decrease? Liquidity and adoption. Bitcoin’s total market value is still a tiny fraction of global wealth (roughly €1.6 trillion, compared to approximately €900 trillion in global assets). As more participants enter the market, holding and transacting Bitcoin, the order books deepen and wild swings become less frequent. This is a common market pattern: smaller cap assets are more volatile, large cap assets (like gold or major currencies) are less so.

Bitcoin Total Addressable Marketcap chart, by Jesse Myers.

As a thought exercise, consider Bitcoin in 2025 to be at a similar point in time to the internet in the late 1990s, where growth is rapid and speculation is rife. Gradually, it became part of the mainstream, and it seemed obvious with the blessing of hindsight. As with the early internet, each year, new institutional investors, companies, and countries get involved, which increases the market cap and overall stability.

It’s also worth noting that volatility cuts both ways – yes, Bitcoin can drop sharply, but it can also rise sharply. Over the past decade, its upward moves have more than compensated for the downswings, for those who held through them. But even if one is uncomfortable with the swings, that’s not a reason to dismiss Bitcoin outright; it’s a reason to size one’s exposure appropriately. And as the market continues to grow, the expectation (and data trend) is that Bitcoin will eventually become a more stable store of value – not pegged to any the euro or the dollar, but in the sense that its value in real terms may fluctuate within a tolerable range once global adoption plateaus. Remember, even gold – now considered relatively stable – had periods of extreme volatility when it was redefining its role in the monetary system. Gold’s role is once again changing, reflected in renewed buying by central banks and a soaring price. What’s less known is that Bitcoin is following a remarkably similar path—but on a compressed timeline. That speed can feel excessively volatile today, which is fine; volatility is not a permanent flaw, it’s a stage. Each cycle so far, Bitcoin’s swings have dampened as its market cap reached new plateaus. Should Bitcoin reach the significantly higher capitalisations that many predict, and its daily moves could become as mundane as EUR/USD. In the meantime, those who understand its long‑term promise are willing to weather the bumps, and there are strategies to manage the risks.

“Bitcoin Is a Bubble (Like Tulips or the Dot-Com Bust)”

Every time Bitcoin’s price surges, skeptics claim it’s a bubble about to pop. They compare it to things like the 17th-century Dutch tulip mania, the South Sea Bubble, or the dot-com crash of 2000. It’s true that Bitcoin’s price has risen very quickly at times – but rapid price increase alone doesn’t equal a bubble.

chart showing historic bubbles

Chart Source

A bubble is typically characterised by an asset’s price far outpacing its intrinsic value, followed by a sudden, permanent collapse when reality catches up. Bitcoin’s history of booms and busts is different: it has crashed spectacularly and quickly recovered to reach new highs each time. This repeating cycle suggests Bitcoin is following an adoption curve rather than a one-and-done bubble. After each Bitcoin drawdown, buyers eventually returned in greater numbers, believing in Bitcoin’s fundamentals and scarcity. This pattern has repeated roughly every four years, coinciding with Bitcoin’s programmed supply cuts (the “halvings”) which create new supply shocks followed by increased demand​.

Historically, Bitcoin has experienced several pronounced peaks and troughs: for example, a run-up in 2013 followed by a crash, again in 2017/2018, and again in 2021. Each time, detractors declared it over, yet Bitcoin not only came back but surpassed its previous highs, supported by ever-growing user adoption, network infrastructure, and investor interest. Contrast this with the dot-com bubble: many internet companies in 2000 went bust and never returned, though the internet itself obviously kept growing. In Bitcoin’s case, Bitcoin is both the network and the asset – and it has kept growing despite volatility. If Bitcoin were truly a worthless bubble, it wouldn’t have survived multiple 50-80% price collapses. The fact that it’s still here – and more robust than ever – indicates something more durable.

Another key difference: bubbles lack informed buyers. They rely on the “greater fool” theory, where people pay high prices only because they hope to unload on someone else before the crash, without understanding or caring about the asset’s actual value. While certainly some uninformed speculators exist in Bitcoin (as in any market), a large portion of Bitcoin holders deeply understand what they own. Far from deception or mass delusion, there are reams of research, education, and transparency around Bitcoin’s function. The entire code is open-source; every aspect of its monetary policy is known and public. This is unlike a classic bubble where risks are glossed over. The continued investment by serious institutions and long-term holders indicates that many see fundamental value, not just a greater fool to sell to. They see Bitcoin as digital gold, as a hedge, as an innovation. When markets correct, these strong convictions hold a floor under Bitcoin’s price, and eventually renewed accumulation combined with exhausted selling ushers in a new cycle.

It’s also instructive to look at metrics beyond price. During each “bubble” cycle, Bitcoin’s underlying health – such as the number of active addresses, hash rate (mining power), and number of developers or companies building on it – has kept increasing. Even when price retraced, these fundamentals often did not, or quickly rebounded. This suggests that each peak wasn’t purely speculative froth; it drove real network growth that persisted. Bitcoin’s adoption is thought to follow a power law, a short period of exponential growth, return to mean, consolidation, and then another expansion. We should expect volatility in such early stages. But calling Bitcoin a bubble after it has “popped” and recovered multiple times is increasingly untenable. Bubbles don’t expand and re-inflate larger than before – but Bitcoin has, due to its built-in scarcity and expanding base of users who value its properties. If anything, one might say there have been multiple mini-bubbles in Bitcoin, but each one has been part of a broader secular rise. As of now, Bitcoin has far outlasted the shelf life of a speculative craze and is steadily integrating into the global financial landscape. That’s a strong indication that its value isn’t just based on irrational hype, but on real and growing demand for what the Bitcoin network provides.

“Bitcoin Is a Pyramid/Ponzi Scheme”

At first glance, Bitcoin can sound like a classic pyramid or Ponzi scheme: early adopters benefit massively while latecomers can lose money if the price drops. However, the Ponzi scheme accusation fundamentally misunderstands Bitcoin’s structure. A Ponzi (or pyramid) scheme involves an operator paying returns to early investors using funds from later investors, all the while lying about the source of returns – it inevitably collapses when new money runs out. 

Bitcoin has no central operator, no promised payouts, and no deception about its nature. There is no entity saying “give me €100 and I’ll guarantee you high returns from new investors’ money.” In fact, Bitcoin makes no promises at all – its only “advertisement” is an open-source code and a whitepaper on how it works. The system is completely transparent: everyone knows new bitcoins are minted only via mining (not via some operator’s sleight of hand), and there’s a public ledger of all transactions. Early buyers profit only if demand grows, yes – but the same is true of gold or real estate or stocks. If that alone defined a Ponzi, then almost every investment (and every form of money) would be a Ponzi by default. The critical element of a Ponzi is fraudulent intent and lack of transparency, and Bitcoin simply doesn’t have that.

Consider gold: People who bought gold decades ago for €300/oz can sell it today for around €3,300/oz because others now value gold more and are willing to pay for it. Early gold buyers “benefited” from later ones – does that make gold a Ponzi scheme? Of course not, because gold is a globally recognised commodity with no central issuer and no promise of returns. The value comes from the collective belief in gold’s properties, which held true over millennia. Bitcoin is analogous: early adopters took a risk on a new technology; as Bitcoin proved itself and more people saw its utility (or at least scarcity), demand increased, rewarding early believers. There’s nothing nefarious in that dynamic – it’s how all successful investments play out. Ponzi schemes collapse because they have no real product and depend on endless new entrants. Bitcoin, by contrast, has a very real “product”: a decentralised monetary network that provides censorship-resistant, inflation-proof value transfer. That utility is why people keep coming, not just blind recruitment. Notably, Bitcoin would continue to function even if no new users joined – it wouldn’t “collapse” Ponzi-style; it just means the price wouldn’t rise further. It doesn’t require an ever-expanding pool of participants to avoid implosion. If adoption stagnated, you’d simply have a stable niche asset changing hands among existing users. All else being equal, it would continue to gradually appreciate against inflationary fiat currencies. 

No one is being misled about how Bitcoin works. In a Ponzi, the victims usually don’t understand the scheme; they’re promised safe, steady returns, and the fraudster hides the fact that payouts come from new deposits. With Bitcoin, everyone is aware that the price is market-driven and can go down as well as up – there’s no guaranteed return at all. In fact, Bitcoin’s volatility and risk are openly discussed (as we did in the section above). People buy Bitcoin not because someone is deceiving them about risk, but because they’ve decided its potential outweighs the risk. Furthermore, Bitcoin has no centralised “upline” siphoning value – there’s no Bernie Madoff skimming off the top. Yes, early miners or buyers have large holdings, but they took on huge risk and in many cases contributed effort (securing the network or spreading awareness). Many early adopters also lost or spent their bitcoins before they became valuable – it wasn’t a guarantee of riches. Most importantly, late adopters are not paying early adopters directly; they’re buying from whoever offers to sell in an open market. Early holders profit only by selling their Bitcoin – but for every seller cashing out, there’s a buyer entering the market or adding to their existing lot, presumably because that buyer sees long-term value. That’s a voluntary market transaction, not a bilking.

breakdown of a ponzi scheme

Source: https://www.investright.org/news-and-insights/fraud-articles/5-investing-traps-to-watch-out-for-in-2020/

Finally, the pyramid scheme label implies a hierarchical recruitment where those at the top (early) benefit from fees or commissions off those below (late). Bitcoin has no referral program, no marketing commission, nothing of that sort. If you convince a friend to buy Bitcoin, you gain nothing (except perhaps the indirect satisfaction of seeing the network grow). Given the size and global nature of the asset, the expected value of such an effort makes it an entirely illogical use of time. This is the opposite of an MLM scheme structure. People evangelise Bitcoin not because they earn a cut from new buyers (they don’t), but because they genuinely believe in its benefits – ideological or financial. 

For more information: The Bitcoin Ponzi Scheme Paradox 

“Bitcoin Isn’t Backed by Anything”

When people say Bitcoin has no “backing,” they typically mean it isn’t redeemable for a physical asset (like gold) and isn’t legal tender by government decree – so they conclude it has no value. It’s true that Bitcoin isn’t backed by a commodity or a government promise. But neither is modern fiat money. 

The euro itself is no longer backed by gold since the end of the Bretton Woods system; its value comes from collective trust, military force and government mandates (taxes, legal tender laws). In fact, most of today’s currencies are just as “unbacked” in the classical sense – they are worth something because we believe they are, and because they have certain useful properties (like being widely accepted and relatively stable). Bitcoin’s value arises from its useful monetary properties – scarcity, durability, divisibility, portability, and security. It’s a form of sound money engineered to excel in those properties. Gold wasn’t “backed” by anything either; it was valued for its innate qualities (it’s rare, doesn’t corrode, is divisible, etc.). Bitcoin can be viewed similarly to gold, as both are scarce and costly to mine.

Only currencies that lack inherent monetary qualities need to be explicitly backed by something else. For instance, in earlier eras paper banknotes were redeemable in gold because the paper itself had no value – it was just an IOU. Gold was the base money. Bitcoin doesn’t need an external backing because it is itself a base money in digital form. It has a provably fixed supply of 21 million, which no other asset or authority can manipulate – this scarcity alone gives it value in a world where all national currencies are inflationary. Additionally, Bitcoin’s network security is “backed” by perhaps the most powerful computer network on Earth: millions of miners collectively doing quintillions of calculations per second (expending real energy and resources) to maintain the integrity of the ledger. In a sense, Bitcoin is backed by energy – the energy invested in mining is what gives Bitcoin its cost of production and its resistance to attack. No one can conjure new bitcoins without incurring massive cost, just as no one can magically create gold. This proof-of-work backing is more transparent and robust than a government’s promise. Governments can (and do) break promises – e.g. printing money far beyond targets. But Bitcoin’s protocol simply cannot be cheated in that way due to how it’s built.

Some argue that Bitcoin is just bytes and thus inherently worthless. Yet in the digital age, information itself can have value – consider domain names or software code. Bitcoin takes this a step further by ensuring those bytes are unique, scarce, and transferable without a central party. That combination is unprecedented. It means Bitcoin effectively monetised trust in mathematics. What “backs” Bitcoin is the social consensus and cryptographic proof that those 21 million coins are the only units that will ever exist on the network. Thousands of independent nodes verify every transaction and enforce the supply. This decentralised consensus is arguably more reliable than any central reserve. Furthermore, Bitcoin’s value is reinforced by its growing adoption – millions of users and thousands of businesses attribute value to it, creating a network effect. You can’t easily break that collective belief, just as one can’t easily convince the world that gold is suddenly worthless shiny rock or that Picasso paintings are just canvas. In economic terms, Bitcoin has utility value (for fast, permissionless payments or as an inflation hedge) and network value (the more people use it, the more useful it becomes). Those aspects form its “backing,” even if there’s no warehouse of gold or government vault underwriting it.

“Governments Can Easily Shut Down Bitcoin”

The notion that the government can easily shut down Bitcoin is unfounded. Bitcoin has no CEO, no Ltd Company behind it, and its creator, the pseudonymous Satoshi Nakamoto, walked away many years ago. This means governments have no central point they can pressure to shut down the network. Bitcoin operates on a global network of computers, making it extremely challenging for any single government or authority to shut it down. The network’s resilience comes from its distributed architecture, where thousands of nodes across various jurisdictions maintain and verify the blockchain. As long as at least two nodes are operating anywhere in the world, Bitcoin remains operational.

Nodes can be run on anyone’s home computer, and miners and developers can be located anywhere in the world, often obfuscated by cloaked IPs. This makes any attempt by governments to shut down Bitcoin comparable to a game of whack-a-mole. While governments can regulate or restrict the use of Bitcoin within their borders, this does not equate to shutting down the network itself. Any regulatory actions would only affect the use of Bitcoin within specific jurisdictions and cannot halt the global network. The decentralised nature of Bitcoin means that even if one country were to impose strict regulations, nodes and users in other parts of the world would continue to keep the network running.

Moreover, game theory plays a significant role in the global adoption of Bitcoin. If one country decides to shut down Bitcoin, other countries may see this as an opportunity to grow their foothold in the emerging monetary network. As Bitcoin continues to monetise, countries that initially banned Bitcoin may be forced to unban it to avoid falling behind economically. This dynamic is evident in how China has banned and unbanned Bitcoin numerous times and has now resigned itself to embracing it.

“I Missed the Boat – Bitcoin Is Too Expensive Now”

Seeing Bitcoin’s price go from a few cents to tens of thousands of euros can make newcomers feel like they’re “too late” to participate. It’s a common misconception that if you didn’t buy Bitcoin years ago, the opportunity is gone or it’s now only for the rich. Several points dispel this notion. First, Bitcoin is highly divisible – each bitcoin is divisible into 100 million units called satoshis. You don’t need to buy a whole bitcoin. This means anyone can start with a small amount, like €20, and obtain a few thousand satoshis. In practical terms, Bitcoin can be used and held in tiny fractions, so it’s accessible at any budget. The experience of owning 0.001 BTC is proportionally the same as owning 1 BTC, just on a smaller scale. This divisibility is important, as it allows everyday people to accumulate Bitcoin over time (a strategy known as “stacking sats”), and it means Bitcoin can function as a currency even at high valuations per whole coin. If someday 1 BTC = €1 million, it doesn’t price out small users – it just means €1 = 100 satoshis. In contrast, one can’t easily buy 1/1000th of a stock share in many cases, giving Bitcoin an edge in inclusivity. So no, you haven’t missed the boat – you can always climb aboard with whatever amount you’re comfortable with.

Second, price alone doesn’t tell you if an asset is overvalued or not. An asset isn’t “expensive” or “cheap” just by its unit price; it depends on fundamental value versus price​. Bitcoin at €30,000 could actually be cheap if in the future its widespread adoption justifies a price of €300,000 or more. Conversely, a stock or crypto token priced at €0.10 could be “expensive” if it’s fundamentally worthless. Many people felt Bitcoin was expensive at €1,000…then it went to €10,000. Then they thought it was surely too late at €10k…only to see it reach €100k. This isn’t to guarantee it will keep rising tenfold, but it illustrates that “missed the boat” calls have been premature repeatedly. Bitcoin is still in relatively early stages of adoption – certainly only a fraction of the world population. Some analysts compare Bitcoin’s current market penetration to the internet’s penetration in the mid-to-late 1990s. If that analogy holds, there could be significant growth ahead, potentially translating to higher value in the long run. The total addressable market for Bitcoin is enormous: it could suck in value from multiple areas – a slice of gold’s €20 trillion market, a slice of offshore assets used as wealth hedges, remittances, store-of-value holdings, etc. In other words, it may feel too expensive now because we anchor to how cheap it once was, but that past price is gone precisely because Bitcoin proved itself more valuable than once thought.

Moreover, thinking you “missed it” often leads to chasing dubious alternatives. Many people who felt Bitcoin was too high got lured into buying much cheaper-looking altcoins (“why buy 0.001 BTC when I can get 100,000 tokens of XYZ for the same money?”). But price per coin is irrelevant – what matters is percentage gain and survival of the asset. Whilst some of those tokens are increasing in Euro value, they are all consistently decreasing in value vs. Bitcoin, as they lacked Bitcoin’s fundamentals. Unit bias is a cognitive trap​. One shouldn’t confuse affordability per unit with investment value. Bitcoin’s proven longevity and network strength give it better prospects of still being here (and higher in value) in a decade than every newer crypto project selling for fractions of a cent. In fact, many later investors have eventually circled back to Bitcoin after learning this the hard way.

From a practical standpoint, even if Bitcoin’s price seems high, you can approach it gradually: buy a bit, learn, maybe set up a regular savings plan (dollar-cost averaging) to mitigate short-term volatility. Many who thought it was too late at one price later wish they had started with even a small amount. Owning some Bitcoin, however small, often changes one’s perspective; you start following developments and understanding why others value it. If ultimately Bitcoin does well, even a small holding now could grow significantly. If it doesn’t, a small holding won’t hurt you badly. In short, it’s not all or nothing. The notion of having “missed it” also ignores that Bitcoin’s story is still being written. We might be early in the global monetary transition it could catalyze. Should Bitcoin fulfill even a fraction of the bold predictions (like becoming a major reserve asset or global settlement layer), today’s prices will, in hindsight, look like a bargain. But even if those lofty goals don’t fully materialise, Bitcoin could simply become a permanent fixture in portfolios, much like gold – and there’s still significant potential upside in that scenario as well.

One more point: Bitcoin adoption is not yet widespread. There is considerable room for growth through education and sensible regulation. The “too late” narratives have consistently been proven wrong with Bitcoin. It is designed for the long term, and each day it survives, it gains a little more trust and integration. Rather than thinking of Bitcoin’s entire rise as something you missed, it may be more productive to think: Bitcoin is still here, still gaining users and value.