American virtual reality founder Jaron Lanier has said Bitcoin's design makes it intrinsically a Ponzi scheme as it benefited the early investors more.

American virtual reality (VR) field founder Jaron Lanier has said Bitcoin’s design makes it intrinsically a Ponzi scheme as it benefited the early investors more.

Speaking during the Lex Fridman podcast, Lanier suggested that Individuals who bought the asset earlier are richer compared to the late investors. 

According to the computer scientist, the Bitcoin chain from wealthy holders to small investors correlates with gambling based on factors like market volatility. He insinuated that Bitcoin, just like gambling, is a large economy but nonproductive. 

“It’s intrinsically a Ponzi scheme. Like the early people have more than the later people. And the further down the chain you get, the more you’re subject to gambling, like dynamics where it’s more and more random and more and more subject to weird network effects and whatnot, unless you’re a very small player…but even then, you’ll be subject to fluctuations. it’s going to wave around the little people more,” said Lanier. 

‘Bitcoin is dysfunctional’

Furthermore, Lanier stated that despite advocating for digital money for a long time, the emergence of Bitcoin does not offer the solution terming it dysfunctional.

Has said that Bitcoin is a recreation of the gold standard, which does not make economic sense.

Lanier notes that it is a disaster to the digital money space to use Bitcoin technology at a boundless scale, terming it a ‘crime against the atmosphere’. 

However, he acknowledged the existence of players like Ethereum co-finder Vitalik Buterin, who are attempting to change the space. 

“When Bitcoin came out and the original paper on the blockchain, my heart kind of sank because I thought, oh my God, we’re applying all of this fancy thought and all these very careful distributed security measures to recreate the gold standard. Like, it’s just so retro. It’s so dysfunctional. It’s so useless from an economic point of view,” said Lanier. 

He also believes that Bitcoin does not show the opportunity for creating economic growth since it was built on the idea that government centralization is the problem.

Watch the video: Jaron Lanier: Virtual Reality, Social Media & the Future of Humans and AI

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Featured image via Lex Fridman YouTube.

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