People often ask me that question when I’m giving a bitcoin presentation or just talking about it one on one. The comparison comes up because Bitcoin is new, people don’t understand it, it has gone up a lot in value, and skeptics assume that must mean someone is being tricked. But to answer it clearly, we need to define what a Ponzi actually is.

A Ponzi scheme is a fraud where early participants are paid “returns” using money from later participants. There’s no productive asset behind it—just cash shuffling from newcomers to old-timers until the inflows slow down and the scheme collapses. Hallmarks of a Ponzi are:

• Promised guaranteed returns regardless of the market.
• No underlying value creation.
• Dependence on new entrants to keep funding old ones.

By that definition, Bitcoin simply doesn’t fit. Bitcoin doesn’t promise anyone a return. It doesn’t pay holders just for owning it. There is no central operator taking money from new buyers to pay old ones. Instead, Bitcoin is an open, neutral monetary network. Its value is set transparently by the market. People buy it because they believe in its properties—scarcity, portability, censorship resistance—not because they’re promised payouts.

Ironically, the system that does mirror a Ponzi structure is Social Security. Today’s workers don’t have their contributions saved for their own retirement. Their payroll taxes are immediately used to pay current retirees. The system only holds up as long as new workers keep entering to fund those already drawing benefits. In other words:

• New entrants (workers) pay.
• Old entrants (retirees) benefit.

That is the definition of a Ponzi-like structure. And unlike Bitcoin, which can run indefinitely on code and math, Social Security’s days are limited. Demographics are shifting—fewer young workers, more retirees—and that math simply doesn’t work forever. The only thing keeping it afloat today is government borrowing and taxation authority.

👉 Bottom line: Bitcoin is not a Ponzi. It’s voluntary, transparent, and sustainable. Social Security, on the other hand, is the true Ponzi—and its expiration date is nearing!