Honestly I still don't really understand how the ending system work in cryptocurrency.
Can anyone explain it?
Normally its A Collective Investment scheme, where in a group of persons enter into an agreement that each individual will contribute a fixed sum regularly for a specified period of time in order to borrow and save money together. This scheme has been a trusted format to support oneself in times of need, it helps as a borrowing and savings instrument, rate of borrowing is determined by the participants themselves, the intermediaries cost is lower when compared to traditional banking, and it uses social capital.
The modus operandi of scheme is simple: Let us assume a collective fund has 4 members, who put in INR 1,000 a month each. This would mean that a collection of INR 4,000 would be made. Thereafter, an auction is conducted where the lowest bid (from a person who is most in need of money that month) is selected. Assuming that the lowest bid is INR 3,800, the balance amount of INR 200 will be equally divided among the other members. This process will continue for 4 months, going by the number of people in the group.
There are a lot of different forms of collective investment scheme used by people all over the world. Majorities of these informal collective investment schemes are based on individual choices. Nevertheless, there are as well broadly distributed mechanisms to save and borrow together or in groups. Informal collective investments groups have long existed in different parts of the world, including, Europe, Africa, America, Asia. In Latin America and Caribbean, these have existed for decades, giving rise to a broad array of methodologies and approaches of different scope and success.
