SEC-S17W3 - "Let's talk about Ponzi scheme"

Greetings Steemit friends

The Ponzi scheme is a business strategy used by some companies demanding their followers to invest. The followers are asked to put in, using the ladder concept, while building a pyramid. These schemes need a top level to be able to recruit more investors to be able to make returns. I will be as simple as possible to present how I see this business scheme

Have you ever heard about Ponzi schemes?

Yeah, I have heard about Ponzi schemes and had the chance to understand the concept. Ponzi schemes with time are fraudulent and a system used by criminals. These criminals create imaginary products and services, demanding individuals to invest. They used pyramid schemes to earn returns, as users need to recruit other investors to get returns. What happens is that the new investors pay in the earnings, which will be used to pay top-level investors.

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Ponzi schemes used to put a lot of energy into recruiting investors, claiming that the investors would get payment of dividends after investment. As new investors come in, criminals behind them make money. At the same time, they can keep some top-level investors. When I talk of top-level investors, I mean those up the ladder. Ponzi Scheme and Pyramid Scheme are technically the same, so let the name not confuse anyone.

Have you been offered to invest in any of these schemes?

Yes, and not once. I had the chance to read about the scheme when I watched a family member fall for it.

Do you know how to detect Ponzi schemes?

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• Whenever you hear of any business investment you get a huge return with no risk. Red flag.
• When you are promised consistent returns, meanwhile not getting the effects of market conditions. Red Flag
• Little or no information about the so-called company. Red Flag
• When the platform has a particular time for withdrawal, you don't have a right over your investment. Red Flag
• Improper account statements or access restrictions are a call for concern. Red flag.

Do you think Steemit is a Ponzi scheme?

Steemit is not a Ponzi scheme, it is a social blogging platform, its users' accounts are solely independent of each other, and content payment returns do not depend on any down line. Following the red flags I mentioned, Steemit is far from being a Ponzi Scheme.

Most Ponzi schemes used network marketing as a strategy to get more investors. Beware of such market strategy, and the moment your return is reliable on a newly recruited investor. Stay away from such investments. Most of the victims are always the people close to us. I will encourage we should be vigilant and protect each other.

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I invite
@crismenia
@menkemndi
@karianaporras

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Cheers
Thanks for dropping by
@fombae