Since the emergence of cryptocurrencies, there have been people who either like digital assets or are critics of this asset class; both have their own specific reasons
Cryptocurrencies have brought remarkable changes in how social structure behaved for a long time during history within the traditional financial system. Whenever it comes to the discussion regarding digital assets, it turns out to see division among crypto believers and its detractors. Crypto has received many accusations, but its believers reject them by citing its transparency of the methodology of digital currencies and its absence of deception. On the other hand, its critics think that crypto-assets do not have any underlying assets or backing from the government that would qualify if it goes through the Ponzi scheme duck test.
Listening to both the arguments seems overwhelming and looks so true to believe, but there is a need to fact check before going too firm on any thought, either to praise or criticize. A Ponzi Scheme, by its definition, is primarily a fraud where the money is secretly used to pay from one group of people with promised returns to another group of people.
Consider the case where you want to invest $1000, and in exchange, you will get the guarantee that in weeks’ time, your money will double. However, here you don’t know that the person making your promise has any legitimate business related to products or services. How are you going to pay, you would ask? Well, don’t worry, the person would perhaps go out to lure more investors, take money from them, and then pay you back with that money. The scheme continues to go this way until the person takes all the money and runs with it.
The namesake of this scheme was an Italian immigrant who came to Boston in 1903 in search of fortune and adventure, followed by all his way to the University of Rome. For more than a decade, he traveled all around the United States, where he became a hero who lost his back and legs for saving a nurse while burning in an explosion. However, his life was going on, and he first started befooling business people and the rich class and looted them using the scheme that named this type of act as Ponzi scheme.
Source: https://www.thecoinrepublic.com/2022/05/24/what-would-be-your-opinion-about-whether-cryptocurrency-is-a-ponzi-scheme/