What is a Ponzi scheme?

In internet marketing, there is all kind of terms. For some of them, you have probably no idea what they truly mean. The term 'Ponzi scheme' is a term that often got mixed up In fuzzy or incorrect explanations. All kinds of stories about Ponzi schemes are been made up by shady promoters to hide the fact their system IS a Ponzi.  Some will even say that it doesn't matter because the whole economic system is a Ponzi.  This article clarifies exactly what a Ponzi scheme is and why you should avoid them like a plague.

Fraudulent intent

A Ponzi scheme is a fraudulent investment intent where early investors will receive money from new investors. Such a system will only succeed as long as there are new investors.

There are often very high returns promised, triggering eagerly people, pushing to take action now.
The prospective investors are been distracted from thinking about the origin of the money they would be earning.

In fact, the Ponzi system fills old money holes with new holes and can never endlessly remain.
The system will always implode, leaving the investors empty-handed

How to recognize a Ponzi scheme?

●     There is a (false) promise of a guaranteed return.
●     Unrealistic high returns (for example, 2 percent per day)
●     Vague stories and low business transparency
●     Passive income, without none or much effort
●     Aggressive recruiting marketing

Charles Ponzi

The Ponzi Scheme is named to Charles Ponzi, who was the creator of the most well-known variant of this scheme in the twenties in the last century.

Charles Ponzi started his fraud from the price differences on postage stamps for foreign shipments. However, the profit was too small to cover his promised return and he began to advance payments.

The error in the system of Ponzi lay in the fact that he had no money invested as he had told the people. Ponzi was blinded by the easy money-making.
He had success and earned a lot. In four months, was Charles Ponzi able to gather a million amount.

In the end, it was Clarence Barron, which showed that Charles Ponzi was a fraudster.

Dickens described the Ponzi system a century before Charles started his postage stamp fraud and Bernard Madoff created the largest Poni ever.

The Ponzi scheme fraud

Ponzi schemes are often set up as fraud in advance, but well-intentioned investment business plans can also slip into the Ponzi scheme fraud quicksand and sink.

This happens if the early investors are paid out the full amount while there are disappointing results.
The owner will then attract new investors in a panic to cover the loss of the earlier investors' payouts. The originating legal investment plan has now changed to a Ponzi scheme.

Ponzi Scheme Vs Pyramid Scheme

Ponzi scheme fraud equals some aspects of a Pyramid scheme and they are often mixed up.

In contrast to a Ponzi scheme, A pyramid scheme doesn’t guarantee results when you don’t recruit new people in the Pyramid scheme.  You won't have any profit as long as you don't recruit a new paying member in a pyramid scheme. 

A pyramid scheme is only spitting that new people are introduced into the system, granted without any, or very low, added product value.

There are no money holes in a Pyramid scheme, you need to bring new money (people) in before you get paid. The so-called chain letter is the most well-known variant of the pyramid scheme.

This doesn't mean that Pyramid schemes are legal, they just resell empty barrels.
Buying a scheme, only to resell the scheme over and over, without any real value product for a fair price, is flatly illegal. The problem with pyramids is the legal discussing what a real value product for the right price is.

Today’s Ponzi Schemes

There are many Ponzi schemes active, especially on the internet.
Promotions are done on social media and massive internet campaigns, trying to trap people with an unrealistically high promised return for no, or little, effort.

The truth.., there is a good chance that you will lose all your invested money!

On the internet, most of today’s Ponzi Schemes are covered up as;

1. Forex trading robots

There is a bot indeed, but not a trading bot. First, the bot will show you good profits, then you will start losing money slowly. These are highly advanced psychical calculated systems that will show you some upgoing trends after a losing strike. At the moment your mind says "get out" the profits go up a little, just to keep you in longer. Of course, is a really good profit to be gained in attracting new investors. A handful of people will be able to withdraw profits, the rest won't.

2. Cloud crypto mining without real hardware.

Wanna mine bitcoin but don't have the hardware? This Ponzi has the "solution" They offer you cloud mining contracts on their highly optimized, solar or wind turbine is driven, bitcoin mining farms. You just buy a mining package for a year and you will get over 100% worth more in cryptocurrency. Ok... why would someone rent out a mining machine if it makes more profit than the rental price. There just ain't a real mining farm,.

3. HYIP (high yield investment programs)

Be an early-bird investor into a new (ecological) invention. Tell all your friends they can invest too.
We have several investment packages that return 120,150,180% in a short period. Just pay, sit back and relax, and get filthy rich by helping the environment. Uhm... not ..... The only invention is an empty system driven by new investors. Again will the first investors be able to withdraw, then they just stop paying. 

BEWARE. Don't think to be smart by using HYIP Monitor sites. These websites that monitor multiple HYIP systems are just a second layer of scams. HYIP Monitor website admins don't make investing themselves, they just hope to get paid by dragging new people into "paying" sites.

4. Money or BITCOIN double systems.

At least this Ponzi System is an obvious scam. Stories like they hacked the bitcoin system, can double the data bla bla. The only thing you need to do is buy an investment package to get over 100% in return the next day, week. Yep, it's raining money on the internet, one small detail, it never rains online.

5. Revshare Internet Traffic ad packages.

This Ponzi scheme offers you " Ad Packages " that give you like 120% in return for clicking 10 ads of other people's ads a day. As you see this is a losing 20% system where the cost is covered by new advertisement pack investors. Here you will be advised to "compound" your investment, keeping it inside the system by buying more ad packs of your profits to multiply your money. This is just a trick of the Ponzi owner to keep the system running longer. Victims of this Ponzi system will see nice up adding numbers in their accounts but can't transfer anything to their bank accounts. Transits will be "in procession" forever. Only the very first investors will be able to withdraw from their accounts. Another trick is launching a second additional site when the first site is gotten empty. A second site will attract new fresh investors and re-investors of the first system. You will only see worthless account money numbers in your account, not withdrawable money.

Final toughed about Ponzi schemes

Ponzi schemes can be hard to recognize, A good way to defend yourself is to reflect why the owners need your money if they can make such huge profits themselves.

Stay as far as possible from these investment systems, only the very first investors will be able to gain some profits by the loss of other people. Recruiting people to Ponzi schemes will hurt your professional trust factor and your social life.

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