Topic: 2015 The year of the Ponzi, BE WARNED! - page 3. (Read 2673 times)

Is it just me, or does that not make sense?

I just hope the ponzi phase gets over soon on bitcointalk. Else, it will get crazy here .

There are honest ponzi games. If the operator declares that his/her game is a ponzi and the last investors will lose money, then every participants will know what going to happen and then they can  invest accordingly. Sites where the operator babling about external profit sources and investments are the really dangerous ponzis.

It's so awful that this year is started full of ponzi's and more over, the bitcoin value is like falling like a rock in the deep water.

I thought I would give a brief explanation of what a Ponzi scheme is and the dangers in investing your money in them.

What is a Ponzi scheme?

A Ponzi, HYIP or pyramid scheme are generally promoted as investments, sometimes the people running them will say they are investing in the Stock Market or selling a new hot product or on this forum they will say they are investing in Bitcoin or Mining.

The truth is they are lying and they aren’t investing in anything.

The way Ponzi scheme works is the people running the scheme will ask for an investment and offer a return on that investment, but because they aren’t making any money (by selling something for example) the only way they can pay the interest is by using the money invested.

So for example;

The promoters offers to give a 10% return per month on investments of $1000.

Someone invests $1000 and waits a month.

The promoters takes $100 (10% of $1000) of the original $1000 and gives it back to the investor.

The investor is happy because it seems to be working.

But all the promoter has done is used some of the original $1000 to pay the interest.

So now the promoter has $900 of the original $1000.

If the promoter keeps paying interest on the $1000 he will run out of money in 9 months, since they have already paid the first month interest.
For the scheme to keep working the promotors needs more money from more investors. If no one else invests, the scheme will fail.

At this point though, the promoter will generally ask investors to tell their friends or make posts on forums telling people it works, because the more people who invest the more money there is to pay the interest.

But all Ponzi schemes fail eventually, either when the promoter runs off with the money or the money runs out.

This is the harsh truth of Ponzi schemes.

So why do people invest in them?

Because some people don’t know it’s a scam.

But there are other people who will invest even when they know it’s a scam because if they get in early they can make money.

For example;

If someone invests $1000 and the scheme runs for a year, they will get 12 payments of $100 (10% per month for 12 months) so they will now have $1200. They would have made $200 profit.

But it’s extremely risky since no one knows how long the scheme will last or if the promoter will continue to pay the interest.

Most people have heard of Bernie Madoff who ran a billion dollar Ponzi scheme. The people who invested with him early would have made a good return on their money, but the people who invested near the end would have lost it all.

Ponzi schemes are extremely risky and most people will lost their money.

It’s up to you to decide if the risk is worth it, but be careful.

For example;

If someone invests $1000 and the scheme runs for a year, they will get 12 payments of $100 (10% per month for 12 months) so they will now have $1200. They would have made $200 profit.

Its getting extremely annoying actually. All these ponzi threads should be moved to a new separate section, the 'gambling' forum became a complete joke.

It's so awful that this year is started full of ponzi's and more over, the bitcoin value is like falling like a rock in the deep water.

Yep. Everybody took huge hits because of this Bitcoin fall. Now They are desperate.

I found a ponzi script on GitHub, one of all ponzies posted in this forum use that

People are playing ponzi because they are desperate. They see the Bitcoin value drop and in panic they invest in these stupid things like Ponzi scene's..