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Topic: Ponzi Schemes for dummies - page 2. (Read 428 times)

member
Activity: 784
Merit: 34
SOL.BIOKRIPT.COM
July 25, 2020, 05:30:10 PM
#8

Disclaimer: The information's contained in this explanation is the result of my understanding of Ponzi Schemes and may contain some errors. Search and confirm about it.


Table of contents

      1. Introduction
      2. What is a Ponzi scheme?
      3. How Does a Ponzi Scheme Work?
      4. How to Recognize crypto Ponzi Schemes?
      5. How to protect yourself?


Introduction

Most individuals who invest in cryptocurrencies want make some profits so the return on investment (ROI) is supposed to be one of the things to study before thinking about investing.
With the increase in projects and methods of investing in cryptocurrencies, the risks increased, and therefore risks must be redefined, the difference between them and Ponzi schemes.

What is a Ponzi scheme?


The name goes back to Charles Ponzi who became famous for his fraudulent system of earning money, as he managed to defraud hundreds of victims.
Ponzi schemes work by paying profits to former investors with funds from newer investors and therefore the belief comes that profits come from product sales and thus continue to invest and the promise of generating high-value returns with little or even no risk.
In the end, other investors discover that they are the source of the funds and therefore they will not receive returns and they may lose their money.



How Does a Ponzi Scheme Work?


The main point is that scammers never invest money that they redistribute investor money to believe that they are making profits, and therefore you need a steady flow of money to survive, otherwise they will run away with the money.

What makes this type of fraud appropriate in cryptocurrencies is the fact that scammers are more difficult to track and there is not enough regulatory framework to protect investors and thus may escape all investments without paying any returns.


How to Recognize crypto Ponzi Schemes?

It is not an easy task, but there are some indicators and red Flags which make more likely the project is to be Ponzi Scheme than as an investment:

  • Promises of high profits with zero risk: “The higher the risk, the higher the reward” When you hear that there are no risks, something is wrong.
  • Consistent returns, regardless of the market condition: The yield from investing varies according to the nature of the market, but when a project talks about double profits in a short period, regardless of the market.
  • Lack of transparency: how to get profits, the nature of the investment, who the investors are, information about them. They try to sell you dreams without providing detail about them.
  • Don’t offer real products or services: Often the investment is a dream, but there are no real services.
  • Increasing minimum investment: These projects need to grow rapidly, and therefore they need to increase their capital, which is higher than the minimum withdrawal amount.
  • It comes through someone with a shared affinity: Often these projects come from a well-known personality or someone you trust and thus reduce caution and search for them, sometimes they lie to developers or give false information.


How to protect yourself?

  • Be skeptical: Ask a lot, understand how you benefit from the investment, how the project works, read about them and ask people in this forum or who you trust.
  • Do not trust. Verify: Do not trust the opinions of experts, and do not listen to all details without checking them.Ask for registration information, legal papers and verify that they are correct.
  • Check out the seller, white paper, developers, their road map, and all the details: Scammers are always lazy so you will find some errors or misinformation.
  • Understand the investment: Do not invest in things you know nothing about.

When it comes to Ponzi scheme, my dear I don't even regard it as something I should be hearing or even talk about. Am glad this topic will help lots of dummies to understand how it works.
hero member
Activity: 2660
Merit: 614
Leading Crypto Sports Betting & Casino Platform
July 25, 2020, 11:57:47 AM
#7
Thanks for this wonderful post.

The two most common Ponzi scheme that I have seen is investment based pyramid scheme and MLM based cryptocurrency scheme. Both these will offer higher returns on amount invested.

It is better to stay away from such scheme if you want to protect your investment.
 

There are many ponzi schemes which are fooling the newbies and i like your attempt to write a detailed description about them.
Another ponzi scheme is the matrix like zarfund which was very popular few years back. That was sort of MLM and it only gave benefits to the owner or who joined on top the the matrix level.
hero member
Activity: 2142
Merit: 792
Top Crypto Casino
July 25, 2020, 06:54:16 AM
#6
Thanks for this wonderful post.

The two most common Ponzi scheme that I have seen is investment based pyramid scheme and MLM based cryptocurrency scheme. Both these will offer higher returns on amount invested.

It is better to stay away from such scheme if you want to protect your investment.
 
hero member
Activity: 2632
Merit: 546
July 25, 2020, 05:27:59 AM
#5
These a wide fire around the Westside am from. And I'm confuse about this. Is there's no authoritative organization that  can look into this?  Or maybe  Certified such platform and even Announce the life spam of such platform?  Please if there is any authorities please kindly share with us

As far as I know there is none, crypto is open and a free market and there's no single authority to look as this Ponzi schemes that's why you really need to be careful and do your research before investing on any projects or platforms out there.
newbie
Activity: 22
Merit: 1
July 25, 2020, 01:51:53 AM
#4
These a wide fire around the Westside am from. And I'm confuse about this. Is there's no authoritative organization that  can look into this?  Or maybe  Certified such platform and even Announce the life spam of such platform?  Please if there is any authorities please kindly share with us
hero member
Activity: 2632
Merit: 833
July 24, 2020, 11:32:26 PM
#3
We have a similar thread, Ponzi Scheme 101. It's an old thread but they are still applicable, in my opinion. And there is also history of Ponzi's in crypto sphere, maybe it just needed to be updated to include the likes of Richard Heart's HEX coin ponzi's.
legendary
Activity: 1512
Merit: 4795
Leading Crypto Sports Betting & Casino Platform
July 24, 2020, 07:19:40 PM
#2
People can be so ignorant to what ponzi and pyramidal scheme are all about, about the high return, people are just greedy and like high return investment within a short term. It can be very hard at times to know a business is using investors money to pay investors because they scam in a way they sell fake products which makes it hard to know a business can be a ponzi, the best approach that I have noticed and best in order not to invest on ponzi scheme is the high yield return promised but not real. No legit business on earth that can offer too good to be real profits.
legendary
Activity: 1582
Merit: 1284
July 24, 2020, 11:26:42 AM
#1

Disclaimer: The information's contained in this explanation is the result of my understanding of Ponzi Schemes and may contain some errors. Search and confirm about it.


Table of contents

      1. Introduction
      2. What is a Ponzi scheme?
      3. How Does a Ponzi Scheme Work?
      4. How to Recognize crypto Ponzi Schemes?
      5. How to protect yourself?


Introduction

Most individuals who invest in cryptocurrencies want make some profits so the return on investment (ROI) is supposed to be one of the things to study before thinking about investing.
With the increase in projects and methods of investing in cryptocurrencies, the risks increased, and therefore risks must be redefined, the difference between them and Ponzi schemes.

What is a Ponzi scheme?


The name goes back to Charles Ponzi who became famous for his fraudulent system of earning money, as he managed to defraud hundreds of victims.
Ponzi schemes work by paying profits to former investors with funds from newer investors and therefore the belief comes that profits come from product sales and thus continue to invest and the promise of generating high-value returns with little or even no risk.
In the end, other investors discover that they are the source of the funds and therefore they will not receive returns and they may lose their money.



How Does a Ponzi Scheme Work?


The main point is that scammers never invest money that they redistribute investor money to believe that they are making profits, and therefore you need a steady flow of money to survive, otherwise they will run away with the money.

What makes this type of fraud appropriate in cryptocurrencies is the fact that scammers are more difficult to track and there is not enough regulatory framework to protect investors and thus may escape all investments without paying any returns.


How to Recognize crypto Ponzi Schemes?

It is not an easy task, but there are some indicators and red Flags which make more likely the project is to be Ponzi Scheme than as an investment:

  • Promises of high profits with zero risk: “The higher the risk, the higher the reward” When you hear that there are no risks, something is wrong.
  • Consistent returns, regardless of the market condition: The yield from investing varies according to the nature of the market, but when a project talks about double profits in a short period, regardless of the market.
  • Lack of transparency: how to get profits, the nature of the investment, who the investors are, information about them. They try to sell you dreams without providing detail about them.
  • Don’t offer real products or services: Often the investment is a dream, but there are no real services.
  • Increasing minimum investment: These projects need to grow rapidly, and therefore they need to increase their capital, which is higher than the minimum withdrawal amount.
  • It comes through someone with a shared affinity: Often these projects come from a well-known personality or someone you trust and thus reduce caution and search for them, sometimes they lie to developers or give false information.


How to protect yourself?

  • Be skeptical: Ask a lot, understand how you benefit from the investment, how the project works, read about them and ask people in this forum or who you trust.
  • Do not trust. Verify: Do not trust the opinions of experts, and do not listen to all details without checking them.Ask for registration information, legal papers and verify that they are correct.
  • Check out the seller, white paper, developers, their road map, and all the details: Scammers are always lazy so you will find some errors or misinformation.
  • Understand the investment: Do not invest in things you know nothing about.
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