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Ponzi Scheme Model: How Ponzi Are Run - Investment - Nairaland

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Ponzi Scheme Model: How Ponzi Are Run by chrisxxx(m): 8:33am On Jan 16, 2021
A basic Ponzi scheme:
So long as there is a constant flow of new money it could potentially last forever. Ponzi schemes are exponential though and eventually it will collapse. Period. It’s mathematically certain.
10 investors give you $1000 each as seed money on the promise that you will give them $2000 each in a month. You take their money. You spend it. They want their money. So you have to find 20 people now to give you $1000 each to pay them back. More if you want some for yourself. You make them the same promise. So now you owe 20 people $2000 each. Now you have to find 40 people to give you $1000 each on the same promise. A month later you have to 80 people. Then you’ll have to find 160. The other alternative is to convince people to reinvest with you or convince your investors to give you even more. The point is so long as you keep bringing money in and not paying it out and convincing people that you are good for it and that it’s legit you’ll potentially run the scheme forever, all while getting filthy rich. Eventually though you’ll run out of people willing to give you money, in which case the scheme ends, or the people you owe money to all want it at once and you don’t have enough to cover it. In either event your scheme is over. By their very nature there is no out for Ponzi schemer. Once you start the scheme your only exit is to vanish (and vanish well, you’ll be hunted for sure), die, or go to prison.
Re: Ponzi Scheme Model: How Ponzi Are Run by hakeem4(m): 4:26pm On Jan 16, 2021
Let's see the new scheme that would come out this year

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