Is Bitcoin a Ponzi Scheme?

Stefan Molyneux

13 August 2025  I critique the labeling of Bitcoin as a Ponzi scheme, emphasizing the need to understand the distinctions between legitimate assets and fraudulent schemes. I argue for Bitcoin’s role as an effective medium of exchange due to its limited supply and energy requirements, contrasting it with fiat currencies that are subject to political manipulation. I aslso dismantle common criticisms of Bitcoin, advocating for informed discourse around cryptocurrencies and their potential to promote financial independence.  FOLLOW ME ON X! https://x.com/StefanMolyneux  GET MY NEW BOOK 'PEACEFUL PARENTING', THE INTERACTIVE PEACEFUL PARENTING AI, AND THE FULL AUDIOBOOK! https://peacefulparenting.com/  Join the PREMIUM philosophy community on the web for free!  Subscribers get 12 HOURS on the "Truth About the French Revolution," multiple interactive multi-lingual philosophy AIs trained on thousands of hours of my material - as well as AIs for Real-Time Relationships, Bitcoin, Peaceful Parenting, and Call-In Shows!  You also receive private livestreams, HUNDREDS of exclusive premium shows, early release podcasts, the 22 Part History of Philosophers series and much more!  See you soon! https://freedomain.locals.com/support/promo/UPB2025

Transcript

00:00all right all right all right all right how you doing everybody stephen von molyneux from the

00:07house of bitcoin maximalists and a fellow posted on x saying bitcoin is a ponzi scheme

00:20bitcoin is a ponzi scheme well that's pretty horrifying that sounds pretty terrible that

00:28sounds pretty awful and let us look at that so not everything that raises in value that you don't

00:39understand is a ponzi scheme that's just really really important to understand so some things are

00:48necessary for life but not the purpose of life so if you're running a race it matters how fast you run

00:57but you can't run without being able to breathe oxygen i mean air as a whole right the whole the

01:04whole deal right now you may say well the purpose of the of the running race is to run as fast as

01:11possible but you can't really do it without air try having a running race underwater try having a

01:18running race in an airless vacuum it won't work right people will just faint or die or whatever

01:24right so there are things that are not in and of themselves valuable but through which value is

01:35achieved another example well i guess to take the same example let's say that you're in a running race

01:41and you win ten thousand dollars you win ten thousand dollars in the running race well ten thousand

01:48dollars is the value but there are other things that are needed for that value to be achieved you

01:56need shoes you need air you need to have had some nutrition that day you should have trained beforehand

02:05i assume unless you're running in some elderly race and you're young so there's a bunch of things

02:11that you need to do now if you say well i've got this running race i don't have any running shoes

02:18i need some running shoes right and and they're going to cost me a hundred bucks and you say well

02:24that's that's weird i mean why just go go win the race it's like well i mean i know that there were

02:33some runners who ran without shoes sort of way back in the day but you need the shoes to to run the race

02:41you can't win at a javelin tossing contest if you don't have a javelin so going out to buy the

02:48javelin feels like you're going in the wrong direction but you kind of need it so that's

02:53really really important in order for there to be free trade in order for there to to be efficiencies

02:59the efficiencies of the division of labor you need to have a medium of exchange i remember reading

03:07this story when i was a little kid lord knows where it came from and maybe people can dig it up anyway

03:12there's a story about the farmer wanted a loaf of bread and the farmer had eggs so he went to the

03:21baker and said hey can i can i trade you the eggs my eggs and get get a loaf of bread and the baker's

03:27like no i've got i got some chickens out back and my wife's allergic to the to to eggs so i don't

03:33really want your eggs right so then the farmer's like oh okay all right well he says to the farmer

03:42is there anything that you do need as well you know i i could use a new pair of pants right so then

03:49the farmer goes to the tailor and says hey if i trade you some eggs will you make a new pair of

03:54pants and the tailor says oh my gosh for me to make a new pair of pants it's going to be like 500

03:59eggs and i can't store them for that long so right so you sort of get the point right so barter

04:04is crazy inefficient especially with perishable goods right eggs go bad or you have to spend a lot

04:11of energy i don't know freezing them all i don't know whatever you do with them right but eggs go bad

04:16now food goes bad and so if you exchange food for money the money stays fresh i mean let's not

04:28count inflation for the moment but the money stays fresh and the food goes rotten right so it allows

04:34you to retain the value of what it is that you're doing so capitalism the efficiencies of the free

04:41market require a medium of exchange which should be reasonably valued should be relatively objective

04:50should be fungible should be divisible without losing its value right you cut a diamond in half

04:56and both halves are not worth as much as the original diamond you cut a bar of gold in half

05:01and both halves of the gold are worth just as much as the the whole bar of gold right so divisible

05:09and easily portable light transmissible you know that kind of stuff right you need a medium of exchange

05:16without the medium of exchange you can't have companies you can't have workers you can't have

05:22bosses you can't have investment into capital machinery you can't have a trade you can't

05:28have certainly can't have international trade right can you imagine trying to trade with someone on the

05:33other side of the world your eggs for something right it's crazy right and ideally of course

05:40the medium of exchange the air to the race the running shoes to the race the medium of exchange

05:48should be apolitical it should not be controllable by politicians because the moment something is

05:58controllable by politicians it is used for political ends i.e. to the benefit of those in power rather

06:04than to the benefit of people in the society and of course this is exactly what's happened in the

06:10west since the adoption of central banking government controlled currencies and it should be limited

06:15it should be limited everybody knows these you know hundred million dollar zimbabwe dollars right

06:21you can just print it and and so on right which is why you know in monopoly you can't just take a

06:28piece of paper and write five hundred dollars on it and use that because it would make the game sort

06:33of pointless right so these are things that are necessary for a medium of exchange now let's talk about

06:43bitcoin with regards to this medium of exchange you so you want it to be limited and gold was limited

06:49right the economy might go grow by three percent a year gold would generally grow by three percent of

06:54year and so on right and when the value of gold went down people would mine it less when the value of

07:02gold went up people would mine it more so it would relatively stable about three three percent a year

07:07and it can't just be wished into existence i mean there's dangers to gold right when the incan

07:13and mayan and aztec gold flowed into france sorry flowed into spain i don't like it where did france

07:21from flowed into spain maybe some flowed into france but let's go with spain first well it created

07:27terrible inflation people had to leave the intelligent people left spain and they were literally in a

07:33recession for 400 years when the smart people go it cripples an entire economy the most economic

07:42development is on the backs of a few smart people mostly males and when they go they take their high

07:52iq genes with them and things get very bad for the population that remains so is bitcoin limited yep

08:01does bitcoin require energy to produce just like gold yep you pay for it in electricity and computer

08:08hardware is it fungible yep two satoshis is worth just as much as two individual satoshis

08:16two bitcoin is worth just as much as one bitcoin and one bitcoin divisible fungible is it transmissible

08:23yep way easier than gold is it seizeable not easily i mean i guess people can torture you

08:29but or the government can throw you in jail until you give up your keys or whatever but

08:34it's not not that is it apolitical yep can't be controlled by politicians it's decentralized

08:40and of course people say oh yes but but but if there's no electricity bro if there's no electricity

08:46like 80 of people or more are going to die anyway and you can actually you can do bitcoin transactions

08:54just using paper and then it'll be fine when the power comes back on they'll process and it'll be

09:01fine and certainly when you have solar charged i mean you can run bitcoin off a cell phone if you

09:08have to right so you got solar charged cell phones you got starlink for electricity you're good

09:15you're good and of course if there's no electricity what is the value of fiat currency right because

09:20it's always the compared to what so people who don't say compared to what i just i don't take

09:25them seriously they're just they don't they're not thinking they're just reacting so if somebody says

09:30oh bitcoin has no intrinsic value it's like neither does the government fiat currency just paper

09:36so compared to what so i mean gold doesn't have any intrinsic value either i mean all value is

09:45subjective i mean how much would you pay for a glass of water when you're dying of thirst in a

09:50desert versus when you've just drank five glasses of water well infinity versus nothing and you say

09:56oh no no no but bitcoin has value because it's hard to produce well let's say that somebody achieves the

10:01ancient alchemical goal of turning lead into gold and is able to produce gold or let's say some

10:06asteroid crashes with a billion tons of gold or let's say that asteroid mining becomes a thing and gold

10:12gets produced or let's say there's some massive mine of a sort of thread of gold or some vein of

10:18gold that's discovered and so there's lots of things that can happen that cause gold to fluctuate

10:23so people who say well electronic stuff has no value well i mean people post i mean people post this

10:30on twitter saying electronic stuff has no value what the hell do you think twitter is it's electronic

10:35stuff what do you think your screen is what do you think electronic stuff i mean your keyboard is only

10:39there to turn physical stuff into electronic stuff so the idea that electronic stuff has no value is

10:45just funny if people believe that then they wouldn't tweet right if if there's no value in electronic stuff

10:53then posting a tweet is contradicting that foundationally right so that doesn't make any sense

10:59so yeah it's decentralized it's apolitical it's limited it's hard to mine not more than 21 million

11:07it's infinite almost infinitely divisible and and it's also self-correcting if there is some

11:13flaw in bitcoin that is significant and people care about it then they'll just update the protocols and

11:20download the download the new application and it will all be fixed right so so it's self-correcting

11:28in a way that fear currency isn't so i mean there's pluses now it's a lazy and boring intellectual

11:34don exercise to compare the strengths of one thing against the weaknesses of another it doesn't

11:41doesn't make any sense at all it's like saying well i can beat muhammad ali because he's bad at pickleball

11:47or what or he's bad at chess it's like so muhammad ali's strength is in boxing let's say my strength is

11:55in chess so saying i'm better than muhammad ali because i'm better than muhammad ali at chess

12:01is it's it's a boring and pointless intellectual exercise it's like people who say buying is always

12:07better than renting it's like no it's not no there's tons of reasons why you might want to rent

12:12rather than buy and blah blah blah blah blah so you compare the strengths of buying well you've got an

12:18asset that's going to appreciate in value versus the weaknesses of renting well you're just giving

12:23money to a landlord and getting nothing of permanent value in return right i mean that's boring and and

12:29people who do that i mean they just disqualified themselves from any intelligent analysis or

12:37they've they've disqualified themselves from being in the company of people with any brains at all

12:43if that's your you know i'm not saying that's you but if that's what's what people's thoughts are

12:47well if i compare the weaknesses of bitcoin with the strengths of gold i am very smart

12:56if i compare the benefits of not getting married to the weaknesses of getting married i am very smart

13:06ah man my god if i compare the benefits of getting an education with the negatives of not getting an

13:14education i am very smart well lots of people end up doing very well in fields where they're not

13:21educated in those fields in which case the education would have been a waste and you might as well have

13:26instead of getting like oh yeah i you gotta you got a business degree in education that's the best

13:31thing you can do really so business degree in education and a hundred grand in debt is way better

13:36than taking that hundred grand getting a loan starting a business and spending four years running it yeah

13:41that's right so just people who do that it's one-dimensional thinking and listen i it's not

13:48a hate-on for those people you know they're just they're not particularly smart and it's not their

13:53fault it is their fault that they think they're smart right that's the problem with the midwits right

13:58dumb people usually know they're dumb smart people usually know they're smart but midwits

14:04think they're way smarter than they are and they're and they need to be put in their place

14:10people who aren't good at things should shut up about those things because they're spreading

14:16confusion misinformation falsehood and foolishness so people who aren't smart need to be regularly

14:24chased out of intelligent discussions right i mean obviously right people who aren't good at

14:29basketball shouldn't be playing high-level basketball they get chased out in fact they're

14:34not even allowed in right people who are bad singers should not be the lead singers in a band they're

14:42chased out right so keeping incompetent people away from highly competent areas is a foundational task of

14:51civilization so when people say ah bitcoin is a ponzi scheme it's a ponzi scheme i mean they're just

15:00putting two things together something's rising in value that i can't quite understand it's a ponzi scheme

15:07so a ponzi scheme of course is a fraudulent investment scenario wherein you're not really

15:18investing anything or you're not investing in anything what you're doing is you are taking money

15:25from newer investors and giving it to people who were earlier investors so you constantly have to

15:32lie and say oh i'm providing 15 return on investment because i'm so brilliant and you just keep getting

15:39new people and new people and new people and you take their investments and you use it to pay 15 to the

15:44people who were already invested or not invested but already gave you the money right and eventually of

15:51course you run out of new people and the whole scheme collapses but there's no value and it's all

15:57a lie and it's fraudulent because you say you say the new investors i am getting 15 and it's funny you know

16:08just by the by the bernie madoff thing like the number of people who told the government that bernie

16:13madoff was a fraud was certainly not zero but government really didn't do didn't do anything

16:21about it so if people if people are saying well the reason i can pay you 15 on your money is i'm such

16:28a great investor that's a lie that's fraudulent that is a person who is lying now bitcoin is not a

16:35person bitcoin is not ai bitcoin has no moral autonomy or responsibility so a ponzi scheme

16:44is driven by a lie that the returns are coming from investments in the market when they are in

16:50fact coming by stealing from the new members or the new quote investors in the ponzi scheme and giving

16:57to the old investors or quote investors in the ponzi scheme and it requires somebody who is actively

17:03lying to the new investors and saying the money comes from investment not from fraudulent transfers

17:10from theft so that's a ponzi scheme it requires an individual who lies bitcoin is not an individual

17:16who lies people making a bunch of money out of something you don't understand is not a fucking

17:23ponzi scheme you don't even know what a ponzi scheme is a ponzi scheme for you is just a label

17:29of wealth that's accumulating in a method you don't know or understand or can't figure out it's not

17:35a ponzi scheme you just don't understand things and i say this with impatience i don't say it with any

17:42hostility or hatred you're not smart and that's fine listen i'm not a great singer i'm not great at chess

17:50i am not a champion volleyball or tennis player i'm there's tons of stuff i'm not great at but i

17:58don't confidently wade into the nba and lecture people on basketball strategies because i don't

18:04know what basketball strategies other are other than drive people slowly insane with endless floor

18:10squeaks from shoes i don't know i don't know so i shut up about the things that i don't know

18:17and that's partly because there are a few things that i'm really good at and i won't shut up about

18:22those but i don't talk about things i don't understand because i'm not vain and i'm not stupid

18:31now i doubt this is to the person who says bitcoin's a ponzi scheme i doubt that you're good at anything

18:38and again this is no hate right i mean there's most people are average they're not good at anything

18:44or great at anything they're average right

18:47so you're average bitcoin requires a significant degree of economic knowledge and intelligence

18:54and computer know-how to truly understand and you don't have those things so you don't understand it

19:01so you think it's a ponzi scheme now you should shut up about that because you're harming people

19:08and the reason that you're harming people is you are warning people away from the greatest

19:15investment opportunity in human history i mean bitcoin's gone up 147 per year regularly on average

19:22since 2011 massively outperformed gold stocks bonds treasuries you name it so when you go around

19:32bobbling along that bitcoin is a ponzi scheme then you are harming people because if you said

19:40i don't understand the value of bitcoin clearly a lot of smart people do understand its value

19:45and clearly it's not a ponzi scheme because a ponzi scheme requires a person who lies and bitcoin is not

19:50a person who lies bitcoin requires theft and fraud a ponzi scheme requires theft and fraud bitcoin does not

20:00require theft and fraud there's no lying that is foundational to bitcoin and bitcoin is not

20:09tangible in the way that a rock or tree is although it's tangible of course it is the arrangement of atoms

20:14and the arrangement of bits on a blockchain so it is tangible in the same way that your tweet is tangible

20:24although you can't hold it in the way that you can hold a piece of gold but it certainly is tangible

20:30bitcoin is secure bitcoin can be anonymous bitcoin can't be hacked and bitcoin is apolitical so there's

20:38lots of positives so if you don't understand bitcoin that's fine there's no reason why you have to

20:44become an expert in bitcoin but then you should shut up about bitcoin i don't understand much about

20:49chess strategies right there's all these names for chess strategies i don't understand them

20:54i mean i understand the general concept that there are particular moves and patterns in chess

20:58but i don't really know the names i don't know how to apply them i'm just a sort of gut level

21:03mediocre chess player oh this seems like a good move but i don't have i'm going to use the von

21:08newman defense i don't i don't know that stuff in fact i find it kind of depressing to even think about

21:12learning that stuff but that's nothing negative towards chess players that's just not

21:16my my thing it's not my bag man because papa's got a brand new bag so yeah so i i don't

21:24chess chess the von newman defense is is ridiculous right i don't i don't i don't say that kind of

21:32stuff because i don't like talking about things i don't understand because it's fraudulent bitcoin is

21:38a ponzi scheme you understand that you're lying about value just like a ponzi scheme person would be

21:45doing i'm not saying you're the same as a ponzi person but it's a similar principle in that a ponzi

21:51person the ponzi runner is claiming to have a knowledge of investment to produce these miraculous

21:5615 returns that he doesn't have and you're claiming to have a knowledge of bitcoin it's a ponzi scheme

22:02that you don't have and you should shut up about it and i say this you know with with care for your

22:08everlasting soul so to speak don't lie about things and claim to have a knowledge that you don't have

22:15and don't scare people away from something that give could give them genuine financial security

22:20please i'm begging you don't do it because it's on your conscience if you have scared people away

22:27from something that could give them genuine financial security and protect their life savings from

22:34the predations of fiat currency well that seems quite important and i generally would not

22:43feel at all comfortable warning people falsely away from something that could give them real

22:50financial security because i didn't understand something i mean you'll notice i don't think ever

22:57over the i know that never over the course of my 20-year public conversation about politics economics and

23:03investment never once have i suggested that anybody buy anything i would never do that because i know that

23:12that is not knowledge that i possess so i won't do it and you should also not talk about things that

23:19you don't understand as if you have something to contribute and i say this because deep down you

23:26probably feel pretty bad if you have any conscience at all about warning people away from potential

23:31financial security and protection from predation and that's on you all the people you said oh it's a

23:37fancy scheme right they didn't invest and they're poorer thereby and that's to some degree on you

23:42freedomaid.com slash net if you'd like to help out the show i'd really appreciate it

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