$BTC world where investments promise high returns, Ponzi schemes emerge as a disguised danger.
- **Objective:** Alert readers about how they operate, identify warning signs, and avoid falling into them.
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What is a Ponzi scheme?**
- **Definition:** A fraudulent scheme that pays "profits" to old investors with the money from new participants, without any real economic activity.
- **Origin:** Named after Charles Ponzi (1920), who defrauded millions with international postal coupons.
- **Key:** Survives as long as there are new investors; collapses when the flow stops.
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*How do they work?**
1. **Attraction:** Offer exceptional returns
2. **Illusion of success:** Timely initial payments to build trust.
3. **Recruitment:** Incentivize investors to bring more people.
4. **Collapse:** When there are no new funds, the system collapses.
5. Historical examples**
