Grassroot Crypto Education | Series 2 Volume 7 - Scams in the Crypto Ecosystem by @david-o.

Hello Everyone.

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Welcome to my post, I use this opportunity to thank our able teacher @fredquantum for how he devotes his time to make sure we learn and adapt to the Cryptocurrency ecosystem.

It's nothing new how people defraud other people of their hard earned money by pulling up one or two schemes, many people fall right into the trap and their money is taken away from them, while some were able to detect the lie and avoided falling for their sweet talks and juicy interest rate. There are two ways in which a scammer can do away with investors money and these includes: Ponzi schemes and Pyramid schemes.

Ponzi schemes and pyramid schemes exist everywhere and is now rampant, many of my friends have tried talking me into trying some sort of investment online, but the fear of loosing my hard earned money keeps holding me back.

What is your understanding of Ponzi and Pyramid Schemes in the Crypto Ecosystem.

Based on research and from the lecture, I was made to know that Ponzi scheme started in the 90's and still exist till date, with the evolvement of Technology more ways and strategies to defraud people of their money through Ponzi scheme are discovered and are been put in place.

Ponzi scheme, is a method by which scammers use new investors money to pay already existing investors as promised, and on the long run crash the site or the business due to the inability to pay off. The scammers lure in new investors by offering them juicy interest rate on their every investment, telling them there is little or no risk involved.

For example the imtoken site, a friend talked me into depositing 10 USDT to the platform to earn 0.3 USDT daily, it was paying and everything was going well not until two weeks ago, the whole site crashed and most of the people I just introduced to the platform could not cover back their initial investment.

Pyramid scheme is also another method used to defraud investors of their money, it works just like Ponzi scheme but a little different as an existing investor earns from every inviting two other investors. The existing investor is entitled to a percentage from his invitee's investment, every new investor that joins the pyramid or the chain is expected to bring his/her own invitees lest the system crashes. For pyramid scheme, continuous invitation keeps the circle going.

State the Similarities/Difference between both Schemes. How would you react to them, Adopt or Stay away? Explain.

• Both Ponzi scheme and pyramid schemes use new investors money to pay already existing investors.
• Both Ponzi scheme and pyramid scheme offer investors juicy interest rate on their investment.
• Both Ponzi scheme and pyramid scheme need new investors for the circle to continue.

I will not want to get myself involved in any investment where I am told there's no risk involved, therefore I would stay away and never invest in any platform that would disappear into thin air on the long run.

After the loss I saw my friends suffer after I introduced them to imtoken, I wouldn't want to get that feeling, one even had to borrow the money she invested, this is why I would stay away.

In a nutshell, before investing in any platform one should make sure they carry out background research on the platform, avoid any platform that offers you juicy interest rate with no risk involved.

Thanks for reading my post. 15% payout to @stemkidss.