Topic: If a pyramid runs forever, is it still a pyramid? (Read 747 times)

If this is forever, can you tell me a pyramiding type of company that lasted for 20 years already, I doubt if they could even last 10 years.
This pyramid that offers great return to investors are not bound to last long, it will only make the founder rich at the expense of the investors who are greedy enough to not seeing the offer is too good to be true.

right, the pyramid system will be detrimental to those who invest in the end, because it is a food for wolves before. but it's different from crypto, which doesn't promise big profits unless we are able to analyze market movements

For me,cases that are considered in a pyramid scheme do not last forever.They will surely stop if they can't lure people about it.But having crypto as a pyramid scheme,this is just a fake news because crypto has evolved more than 10 years and even at the present,we can still benefit and make profits with it.

Just think that every business is somewhat a ponzi. If no customer is willing to buy your goods, you might as well close down. Isn't that the same with those pyramid schemes?

We cannot generalised that all crypto are ponzi, obviously ponzis doesn’t make organic money and only generating it out of their victims. Technically crypto is business if it produces products and services but due to different circumstances and market conditions you can’t predict how the business might last. Ponzi scheme will not disappear its part of history and culture but they evolve.

I thought that a financial pyramid is called so, because it will end one day and people that are involved are going to lose money. But yes, I think if there is a pyramid with a nonstop cashflow, it can last forever and still be called a pyramid.

It was designed to hit the target then to run away, the system was build to do that and they are good in attracting new participants as they are giving something that was too good to be true, but afterwards when everything was settled they will just disappeared together with the money that they really
wanted to steal from the people who's joining them.

right, cryptocurrency is not a ponzi, but this is pure trade. not every senior gets a big award, but for those who can take advantage of the opportunity, he will get the benefits. therefore it is not too late to trade on cryptocurrency, opportunities will come continuously, and we must be patient waiting

I don't think cryptocurrency can be considered to be like a Ponzi scheme type of investment. First off, there is binaries in it and second is you control your own investment without worrying your pay insurance and payouts unto when you do it.

Those two doesn't correlate to each other.
If it is a pyramid then that seems that it will stop in the future.
If it never stops then it is not a pyramid.
In my opinion, if there is even the smallest indication that it is a pyramid, thus a ponzi scheme, then so it is. 

Which country are you from? That's the first time I've ever seen someone mention that Ponzi schemes are inherent to their culture.
Are you sure you're actually talking about ponzi schemes?

I.e. paying out old investors with money brought in by new investors, without doing anything else with that money?

First off, no pyramid runs forever. They all have an expiring date for the dirty business to come to an end. You saw how Madoff ended and the appropriate sentencing he got for that scheme, right? The scheme is like a vampire. There must always be regular new entrants ("blood") supply to sustain the gluttonous old members to keep it going. Once supply is cut off, the scheme dies off. It's the normal circle for ponzi schemes. There is always a day of reckoning.

You are only talking about MLM here or networking where they have real products but the main way to earn here is through commissions by their referrals. Unlike Ponzi schemes/HYIPs famous in the internet which they claim they drill oil, harvest solar power all of which are false businesses to begin with. MLMs stand to survive because one they are legal and two they sell products at an unreasonable rate and the way their recruiters work which are on the top of the pyramid sells vigorously that they don't care what the products worth right now they just want to earn like them as well.

This keeps happening because most people do not have a financial education, they do not understand how the economy works, they do not understand money, loans compounding interest or how to distinguish a good investment opportunity from one that is a scam, just look at bitconnect which was a ponzi scheme, many trusted members warned that it was a ponzi but people wanted to believe this time was different and they were laughing at the accusations only to be proven wrong in January of 2018.

If the pyramid they you talk about is in the limelight and it is indeed a ponzi scheme then it is hard to think that the government won't do anything or the people who has been duped won't just sue them after facing problems due to that schemes .

It is not actually the problem of the institutions , people need to learn after seeing them do all this , they need to know that there is nothing in this world for free and at the same time if there is something that is too good to be true then you should rather stay away from that thing.

Avoid unauthorized institutions, don't get involved with the ones who do not have any reviews online and haven't been tested .

I have seen plenty of mlm type of ICO as well and nobody talks about that, it was the worst type of coin offering I have seen and nobody really cares about it. You pay a certain amount of money to get that coin from another person and then that person keeps their coin plus gives you their coin, then you sell it to someone else and you keep yours but get your money back and you can sell it to as many people as possible.

It is literally that way that they are getting funded as well as mining that as well. It is the worst thing that happened to crypto currency because we already have the ponzi schemes in the world as of right now and we do not need it to come to crypto as well, we have something good here and we do not want it to get blown off neither, we just want to keep it as it is.

Lol, maybe after building those legitimate businesses, those that are behind the ponzi scheme might decide that it is time they stop this ponzi thing and focus on the real business… so what do you think is going to happen when they decide to make this kind of decision? A ponzi is still what it is, though there is the possibility that it can run for a long time, but if these business decides that they are no longer going to be part of it, then that means that it is over… unless that community continues to grow. Take for example – Bitcoin. The thing that is holding Bitcoin is the strong community… and since it keeps on growing, it will be difficult for Bitcoin to stop.

ponzi only relies on cash inflows from new investors to pay the investment interest of old investors
we would not call it a ponzi scheme if it has real business activities that can generate income
and a long lasting pyramid is just a ponzi that runs with good cash management
sooner or later, as more investors cashing out their money, the pyramid will collapse

I have a grandmother (who owns a small factory) and uses/used this kind of scheme to improve her workers wages and the workers were/are actually doing well. I know one of her male worker who lived quite comfortably compared to his neighbors.

I learned the so called pyramid/ponzi scheme is ancient to our culture and that it was used to sustain communities in difficult times. It still works for them to thesedays.

So, would you encourage me to go tell my grandmother to abandon this scheme because government and Internet people think it is evil or illegal? Well, thank goodness the local authorities do not interfere too much in the people's lives and culture there. And it is a thriving community that depends less on government,

I think such scheme could be ran properly and sustainably if done right

But there are countries, where there are Ponzi schemes, are even state-owned like the pension systems!

If a pyramid runs forever, is it still a pyramid?

A pyramid scheme can't run forever. Equally if something runs forever, it is not a pyramid scheme.

A pyramid, no matter the complexity, always involves getting more people/investment in at the lowest level. Anything that is structured like that will eventually reach the point where it runs out of new input, at which point it collapses and those who got in late will get stung.

Ponzi is simply taking the investment of a person to pay for the investment return of another person. If there are no more investors, their capacity to pay for the returns of their earlier investors will die. That is Ponzi scheme. But if the scheme is going to be mixed with registered and legit businesses with products, it is not Ponzi scheme anymore. That is what networking businesses are using as a strategy. And they are not considered illegal anymore simply because of their business products, which are actually fronts.

There are MLM or Multi Level Marketing out there that is still around for more than 100 years and one of the most popular is Avon products which started way back 1886. They we're able to stay in business because they have a product that people actually use, unlike other MLM out with their main goal is to recruit people to invest and not to sell products, products that are useful and not just to say that they have a product.

Right.Pyramids do not last for a long time since they immediately vanish after they have scam those who invested in it.But if the said pyramid refers to crypto wherein most people have believed in the first place that crypto is just a scam,then they are very wrong because crypto is very legit ever since and having the fact that it has existed for 10 years giving profits to people.

I definitely like this point of view. Exhaustion of available fools! LOL  I don't understand why MLM schemes are still proliferating nowadays. Maybe, hoping that someday they will get rich from their downlines? But it is like taking advantage of those gullible people who are now stuck to the idea that they will get rich also from their future referrals. 

Short answer no. Like many have already pointed out.

It still starts with 1 man and then it trickles down into multiple levels of referrals. Eventually, you will run out of people on the planet. That too in just 15 cycles if all you had was 5 people under you and wanted each one of them to refer 5 people each and so on.

In genealogy, we have this as the concept of pedigree collapse. Look into it.

It's the same trick that every person falls for because we are naturally afraid of doing just a little bit of maths. That being said, a true multi-level marketing scheme or Ponzi cannot run forever by definition, since there has to be an exhaustion of available fools to bring into the program, unless it expands slower than the growth rate of the human population.

Some cloud miners may fit in that category. Not necessarily because they will last for ever, but more so because of how some of the bigger ones (Genesis Mining for example) used the funds to buy mining hardware.

I'm sure they will eventually have to pull the plug because of how unprofitable it becomes for them, but as long as we go through bull markets they might be able to last long enough to not bust during a bear market.

Another thing is that they could use people's funds to speculate with on the market, which if it goes well for them might help bring in some more profits they can use to pay out mining contracts with. They have several options.

Pyramiding is quite a bias for people who's on the top of the list, therefore, it's like you're working on your own so they can earn. I've seen it so many times even though they did not make some effort to sell their product by just only inviting more people to join in and if there are more people meaning they will earn more. And the ones who will benefit it all was the person on the very top. So, therefore, it will not gonna last forever.

Pyramid system needs to have a good underline and as we know that the pyramid has a pointed top.
Which means every level we go down we need more people and we have numbers to produce.
This pyramid will actually be destroyed once theres no new members to join. there are no forever in pyramiding.
The first to enter will gain a lot and a sad story for the late comers.

Nothing runs forever specially on a pyramid structure type of business.Basing on the examples given on op like apparels and other related stuff.

They are indeed on multi-level networking structure the thing here on why they do sustain on running up for long? They had sustained or established themselves regarding on their business which its hard for them to collapse yet they do have working product unlike on typical Ponzi scams that only funds are circulating which doesn't have any products.

Interesting question but no pyramid scheme can run forever, if we take your mental experiment to the extreme you will get the whole humanity participating in a single ponzi scheme, the organizers could have at their disposal all the money of the world and it will still crash since they will owe their participants more than what they can generate each month, also it is important to note that someone that deceived their investors with false promises is still a criminal even if he somehow found a way to prolong the ponzi since at the end there are going to be people that will lose everything they invested with him.

That's the bad part of pyramid, technically speaking it can't run forever because there is a limited amount of money plus limited amount of people. So, no matter how long it goes on in the end every single person would be involved in that pyramid and then there won't be a new person to join.

I know it makes no sense that 8 billion people would join a new pyramid scheme but in the end that is what a pyramid scheme is, even if 8 billion people joins the last ones will be the ones that will hold the loses. So no, a pyramid can't run forever and yes no matter how big it is in the end a pyramid is a pyramid and its a scheme that will end with people losing because that is how the system works, the last of the line will hold the losses. There is no way around it or a solution for it.

Based on facts so far the scheme is a pyramid scheme, no matter how long it manages to stay afloat, its still going down and the number of years does not matte. But for those likening bitcoin to such scheme, what they have failed to do is to understand whats its all about which will still be responsible for them to wait till eternity because it wont fail that does not absolves the possibility of challenges being faced every now and then but its not going to crash like a regular pyramid scheme...

Mathematically speaking, pyramids can't last forever. Each new layer requires an exponential amount of money, and it doesn't take a lot before it starts requiring money the entire world doesn't even have. The only reason why Madoff's lasted as long as it did is because people didn't cash out; people trusted him completely, but he very easily could have been exposed sooner.

If it runs forever, then it's not purely a pyramid/ponzi scheme. One example is Herbalife, which is heavily based on a pyramid structure, but does enough legitimate selling that it is able to sustain itself.

The question is basically wrong, because no pyramid can run for the infinity. Eventually the bottom tier investors need to get returns to their capital. Either they should convince new investors to join the scheme, or they should get it forcibly from those higher up. If they are able to do the first option, then the new tier of investors will face the same dilemma eventually. 

The Ponzi pyramid will run in a short time, they cannot exist for a long time. Only a few people who can survive and they still ask for the other people to join under them. That person will search a new member no matter how long they will need to find. Ponzi will still Ponzi, no matter if they can run in a long time but I think that there will be many new people who can always join under them because people are interested with the fast money from the Ponzi. They don't think that the Ponzi will end or the company will scam people, they join because they want to make money in a short time.

Eventually the "new" money runs out and the previous investors cannot be paid and this is when these so-called Ponzi schemes collapse. It often happens that one or two large investors extract their investment capital and when this happens the cashflow dry up and the payments gets delayed or the people behind the Ponzi scheme cut and run.

As long as the feeder capital can support the payments and new capital comes in to support that, the Ponzi scheme will run indefinitely.  When legitimate businesses can generate enough capital to pay the investors, this Ponzi scheme will continue forever! 

It actually depend on what we see as a pyramid scheme and the law and monetary policy around the country of residents of the scheme. If a scheme is paying high interest that is more than the interest rate of a nation I classified such scheme as a Ponzi or pyramid scheme and at that one day it is going to run into problems and the governments might close it down because it is against the laws of the land.
I have seen many Ponzi schemes that lasts more than two to three years and people become comfortable with them and one day one thing will happen and you will see them close down and investors money will be at risk.

I believe you're mistaking all Multi Level Marketing businesses for Ponzi scheme. A business is said to be a Ponzi scheme when it doesn't deal on any product but promises quick high return of investment meanwhile MLM are business that has to do with network marketing. Now since most MLM actually deals with sale of product you can't consider them Ponzi but they all operate using the  pyramid like system. Most Ponzi disguised themselves as MLM in order to decieve victim info investing with them now it's left for you to be smart to differentiate between the real and the fake.

This is the same mistakes the government of my country is making, they mistake bitcoin for Ponzi scheme since they feel you have to buy from an earlier investor and sell to a later investors to make profit and since most of the scams (Ponzi schemes) in the country make use of bitcoin as a payment option they automatically think bitcoin is a ponzi scheme.

In the end the people that would take most of the damage our the people below, in order for a ponzi or the pyramid to exist is to remove all of the topnotch asses. How would you do that, it only exist in movies where protagonist saves the world from the tyrant ruler of the world. It doesn't exist at all, now we just have to go along with it and make the most out of it, squeeze the juice while it is available or leave it to others and go on with whatever business you doing not including crypto currencies or whatsoever ponzi schemes you know of.

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?