Before I go on, I'll point out that there is a difference between objective errors of understanding and subjective opinions. I'll note which I think is which as I address your points.
Because it works on the principle that the people right at the beginning of the scheme sell a 'product' that has no basis.
No, this is objectively wrong. With Bitcoin, no one at "right at the beginning" is selling anything. There is no scheme, as such. No one owns it. Whilst one can buy or sell Bitcoins, just as with any other currency or commodity, it still doesn't work in the way that you seem to think here. It is not any kind of pyramid scheme, for example.
This is what I wrote a few years ago in response to the claim that Bitcoin is a pyramid/Ponzi scheme which is similar to your statement above (nothing has changed since I wrote it):
Bitcoin is not a pyramid scheme or Ponzi scheme. A pyramid/Ponzi scheme is predicated on the sale of a product that may not exist or may be worthless, and payouts to existing members come not from sales of the product but only (or mostly) from new members paying joining fees.
Bitcoin is a store of value. Just like a gram of gold, just like a US Dollar, just like a tin of sardines, just like a conch shell, just like a Pound Sterling, just like a watch, a Bitcoin is worth what a potential buyer thinks it is worth (which is reflected in the market price). The value of Bitcoin (measured in conventional national currencies) rises not because new entrants must pay an entrance fee (as in a pyramid/Ponzi scheme) but because buyers think that Bitcoins should be worth more. Another way to look at it is as a commodity. It is worth what people feel it is worth.
I should add to the passage above that in general a currency can also be a commodity and vice versa.
It is a made-up currency. Anyone can do it. You can emulate the bitcoin game amongst your friends using Monopoly Money.
Yes, this is essentially so. But what of it? It's what governments do too with conventional nation state currencies.
All currencies are, of course, "made-up". Some are more successful than others.
What makes Bitcoin and some other cryptocurrencies successful (so far)? It is because they successfully fulfil the requirements of a currency: They are reliable, available, difficult to fake, and can be manufactured but not-overly easily so. Thus, just like any nation state currency, they allow people to have 'faith' in them and treat them as exchangeable stores of value on the basis that their value cannot be easily diluted (by faking or over-easy supply[1]) and that they have 'value' because everyone else is willing to accept that they do (just like nation state currencies).
But the trick is to get others to buy a few of your coins on the understanding that you can get enough people to accept the hype and want to buy your coins from you for more than you paid for them. Then other people have to see this happening and decide that it is an investment opportunity.
This is a subjective view. You're technically right, of course, but your interpretation of it is subjective. Let me remind you that this is exactly how nation state currencies work too. If you think that this makes Bitcoin a scam then you must accept that nation state currencies are also scams on the very same basis.
In fact, I would say that nation state currencies, on this basis, are worse scams than Bitcoin. Why? Because nation state currencies have even less to back them than Bitcoin does. Nation state currencies have
no backing whatsoever nowadays whereas Bitcoin has real world energy usage and cost to back it. Real effort and energy goes into mining Bitcoins, unlike nation state currencies which can be manufactured on a whim by government (e.g. quantitative easing) or by banks under government policy.
So the price per coin starts to go up. You then sell any remaining coins you have when you judge that the price is as high as it if likely to get. Maybe buy some at a lowish price just to stimulate the market; then sell quickly at the first rise.
Once again, this is objectively incorrect.
Whilst anyone can trade Bitcoin in the way you describe here, exactly as people trade other currencies (including nation state currencies) or commodities, the ability to trade Bitcoin in this way does not make it a scam.
And, as I observed above, the originators of Bitcoin do not have some sort of massive holding that was available only to them. Bitcoin was and is openly available to anyone from its very first day, to buy or mine. There is no hidden cabal, no secret controlling power.
Note that the people buying the coins are doing it with real money.
You have not identified a reason to think that Bitcoin is any less real than any other currency or commodity.
So all those who sold coins have a real money equivalent in the bank.
And all those who mined Bitcoins spent real money to make them. This is, in large part, why people are willing to attribute real value to Bitcoins.
All those who bought the coins can hope for one of two things. Either the value will go up further so they can sell at a profit, or they can hope to purchase some good or other thus turning their coins into a tangible asset.
Correct. This is just like any other currency or commodity, including nation state currencies.
But, it being an investment device, what happens when the value falls ?
The owner can read the tealeaves and sell as quickly as he can at a loss, or hold on and hope that some day the value will increase to the point where he/she can sell at a profit. He/she is in what the housing market would call 'negative equity'.
Quote so. Just like any other currency or commodity, including nation state currencies, current holders will lose money if the value of their holding as measured in other currencies or commodities drops. That's how investment works. It's normal.
Again, this is not indicative of a scam. It's just normal real life.
Well, all the people who got into it at the beginning have sold their holding as soon as the curve showed sign of topping out.
(a) This is objectively not a sign of a scam. It's just business.
(b) But it's not really true of Bitcoin anyway.
(c) You are still making the objective errors of thinking that there is some kind of inside cabal. No such thing exists in Bitcoin.
And that is, in my opinion, what the scheme was all about right from the beginning.
Do you have any evidence whatsoever to sustain such an opinion? Not someone else's view but your own, substantive, documented, evidence. If you examine Bitcoin in detail then I think you will find no such evidence. I can say this with some certainty as I have a reasonably good understanding of how Bitcoin works and there is simply no room that I have seen do far for such a conspiracy.
On CNBC a few week ago, Jordan Belfort , the real 'Wolf of Wall Street' did an interview where he declared it a scam. And he said he should know.
I'm afraid that his view doesn't matter. The objectively observable facts are otherwise. A scam needs someone, some inside group, to benefit. With Bitcoin, there is no inside group. It was not designed to be a scam as far as I can see.
Even if the inventors had benefited from it on a large scale, that would still not indicate that it was a spam. Anyone else was and still is able to take part and benefit from it. Unlike a pyramid or Ponzi scam, opportunities for investment in Bitcoin still exist (just as they still do with any other nation state currency or commodity, despite these things not being brand new, just as Bitcoin is no longer brand new).
The premises on which you think that it is a scam are objectively incorrect. You seem to misunderstand how it works and what it really is, and have used erroneous circumstantial evidence to label it as something it is not. And many of your concerns apply as much (or more) to conventional nation state currencies as to Bitcoin.
Study it in greater detail. You'll find that there is no systemic evidence of any kind of scam[2]. It's just a currency with no central control. It floats at values that the market ascribes to it and which are also dependent, to an extent, on real world energy costs.
Footnotes:-
1: Nation state currencies can actually fail on this point due to meddling such as quantitative easing. Bitcoin is better in this respect in that there is no central control; it is fully distributed.
2: This is not to say that there aren't scammers using Bitcoin but, again, this is not evidence that Bitcoin itself is a scam. Scammers use conventional nation state currencies to execute scams far more than they do Bitcoin.