Topic: If a pyramid runs forever, is it still a pyramid? - page 3. (Read 750 times)

This one. I don't think that an illegitimate business can run forever. Sure they can hide and camouflage it, but sooner or later they will be unmasked.


That is the big factor here, the government, in our country I have heard a lot of pyramiding scheme since I was a little, and no matter how they try to hide, it will eventually fall. Either the people behind the bottom is the scheme complain because they have not received their commission, or the government will step in and crush the scheme for good.

And the loser? Those investors who fall for this kind of trap and nothing has changed for the last 40-50 years.

Pyramid scheme is bound to collapse regardless of how long it has been running, they will collapse. Wise investors wouldn't be attracted with sweet words by their 'wolf in sheeps clothing' tactic as they are venturing with 'legit' business.

It's all about the show to attract more investors. Think of it that legit businesses are even have times of failure and these scams are putting into the minds of their investors that they are there to stay mostly with no signs of failure? no way.

Pyramid schemes, aka ponzi schemes fall because they don't produce anything, they don't generate profit, they just reallocate resources from bottom to the top, and they fall when there's not enough suckers on the bottom. So, under this definition a pyramid can never run forever.

But if a company produces something and has some pyramid-like structure, then it actually go on forever. Examples are MLM products, various referral programms and so on. So, it's just a matter of what we consider a pyramid - a ponzi scheme or just anything with multi-level tree-like structure?

Multi-level marketing, as they call it. Ponzi schemes dressed as legitimate businesses by actually owning something they can sell, however their main profit maker is by means of inviting other affiliates into their schemes which would then pay off to become a member and sell those damned products. Yeah, it could work.



This is not a ponzi anymore but rather a form of a legitimate business if they have been venturing and investing to other firms through which they can get their profit. Primarily, ponzis get their money from inviting people into the scheme and getting the money off of those newly-joined lads. But with other profit streams apart from affiliates, I don't think you can consider it as ponzi as they now have the means to pay off their so-called investors without depending on new affiliates for money.

But then again, no business is too big to fail, so no matter how this ponzi scheme fare, or how well it treads on the market, it will surely has its fall too.

I don't think so. In the long run, even legitimate businesses will be confronted with less demand, weaker local economy, or a global crisis the way we had it like a decade ago. No business is safe from that and as result a lot of these will fail. In the process whatever that can be seen as a scheme will collapse too.

The thing with schemes is that once they fail, others pop up with a few improvements here and there and continue where the rest didn't manage to continue. Schemes as a whole will continue pretty much for ever, but not in the way that one or more entities manage to stay operational more than a decade or whatever other period of time.

I also think that a pyramid scheme will not run forever, if something similar to pyramid can run forever but is not a pyramid. But if a pyramid scheme is running i will never invest on it even if is still alive from some time.

I owned a popular blog for some years monitoring scams in 2 industries. With the years, I can tell you scammers have succeeded in developing pyramids that are sometimes very complex or even an informed person would not notice anything.
I've also seen a lot of people failing in. No matter their education level and no matter their economic situation. From the poor guy, the average Joe with a 6 digits loan, people with high education, comfortable lifestyle, etc...

Whether the scheme is related to the cryptocurrency or some other service related, a pyramid scheme is always associated with the new investors. This at some point will surely gets broken, and the same gets the end of the scheme turning it a ponzi or scam. Early investors were the one that benefit out of the pyramid.

yes it is and it is also considered a scam no matter what.
the reason why it is a pyramid scheme and is a scam is simply because of its design. if you start thinking realistically about a pyramid scheme you can see why it is a scam pretty clearly. in this scheme you first throw yourself in a ditch and in order to get out of that ditch you have to pull others down where you are so that you could put your feet on their head and pull yourself out.
the bigger the ditch the more people need to be fooled and the fuller the ditch.

Well, all stated above was right but I have some addition to your statement.
4. They are greedy people who want an easy process of profit.
The pyramiding scheme will not long last until their fund pool will have a big amount and run away. The circulation of money is through the members who participated with. Indeed, after the fund has collected and it is big enough for them they are suddenly disappeared. For sure investors that they fooled probably cry.

I have to tell you, that's the very first thing I thought.  Madoff ran his Ponzi for probably an unprecedented number of years, and yet it finally came crashing down.  I'm pretty sure all pyramid/Ponzi schemes fall apart eventually, because they all rely on obtaining new investor funds, and during times of economic crisis (like a recession or depression), people stop handing over their money to the Ponzi-runner.  It always happens.

So the question in the title is a bit off.  A pyramid won't run forever.  But assuming it did, then yes, it's still a pyramid scheme.

Oh, that's so wrong.  Some of these scammers are very convincing--which is why they call them con(fidence) men, and they certainly can and have suckered in high-wealth investors and otherwise very smart people.

Seems like the folks that Bernie Madoff fooled with his pyramid scheme violated all three of these reasons.

There hasn't been such pyramid and will never be. There are a lot of reasons:
1. People who invest in pyramids usually have low economic situation.
2. Most of them aren't smart since they blindly believe what ponzi companies offer are real and they are so smart that were able to find such a great deal.
3. None businessman will invest in such scheme, so pyramid is far from real investors.

Help me understand if I understood you correctly.

Basically your idea of enhanced pyramid scheme is that money from this pyramid is invested in other businesses ?
In this case, i do not think that it is still ponzi, This is just illegally obtained money invested elsewhere.

Are you talking about cryptocurrencies themselves, or investment schemes that are launched that accept payments in BTC?

Most of the ponzi schemes that exist online are extremely obvious to spot, and I think a bit of common sense is all you need honestly.


What it boils down to is whether or not a business's traditional operation model of selling their products or services alone is capable of sustaining itself, without the need for any further investment from new funding sources all the time in order to make their profits in the long run.

There should also be a clear distinction between affiliate marketing, and ponzi, that you should be aware of, imo. There are certain companies like Amway that sort of sits somewhere in between, it's best to just avoid them.

Philosophically, do they consist a ponzi type structure? Yes, by strict definition. But they might not be defined as such within legislation.

I think there is no pyramid that will run forever, either they get bankrupt in the long run or they get stopped by the government.
I know some long run ponzi scheme which ran for 5 years already with millions of members, they give a return of at least 30% per month and they have a lot of business under the name of the investment scheme, there was no complaint from clients but the government sees this is a big risk as they offer a big percentage which they cannot justify properly, the stand of the government is no investment can give you a consistent 30% per month.

The government job here is to prevent if it's still possible so stopping a ponzi could end it's operation abruptly.

I have been wracking my head trying to figure this out. I've been watching some schemes on cryptocurrencies and even though their complexity is very high, many all boil down to the same basic principle: a ponzi.

What my question is seeking to address is whether these ponzi schemes are indeed ponzi if a surrounding business takes advantage of it.

Ok, I did not make myself clear.

Let's think 3Dimensionally beyond the simple MLM, ponzi.

1. The pyramid is a hierarchical structure right? Now, imagine it being surrounded by legimate businesses. I mean most "complicated" and smart ponzis are like that and can run for decades. Think Bernie Madoff.

2. From the Ponzi, legitimate and real businesses are ran. In fact, an entire eco-system can be built around the simple ponzi. From investing in other legitimate investments to small brick and mortar SMEs, ponzi money can "expand" to so many horizons.

What are examples?

- apparel
- consulting services
- video content
- tradeshow and "TEDtalk" like events with pricey tickets
- VPN hosting services, etc, etc.

These allied businesses, are not in and of themselves "ponzi" but may have been capitalized with ponzi money. Now, if any of these endeavors "takes off" and perpetuates the ponzi or prolongs it, doesn't that make the ponzi not a ponzi?