Some of the most infamous criminals in history made their fortune by participating in Ponzi schemes. And now the chance is yours to have a go at a virtual Ponzi scheme in the form of a game and see if you can win the game and take home the dough.
So, first of all, what is a Ponzi scheme? Ponzi schemes owe their name to Charles Ponzi, an Italian immigrant who swindled roughly $20 million dollars out of American investors in the 1920s. While Ponzi felt he had come up with a genuine and legitimate investment opportunity, he needed money to back it so he encouraged others to invest with him and promised them incredible returns. However, he never followed through on his investments; he merely used the money that was coming in from new investors to pay off older investors who demanded their returns. The money then ran out yet he still owed a lot to his numerous investors. Unable to pay, he ended up in prison. A more recent example of a Ponzi scheme was the investment fund run by Bernard Madoff which fell apart in the early 21st century.
What is a bitcoin Ponzi game?
Bitcoin Ponzi games are based on the same idea. You invest money and get money back when more people invest. The more people you bring in and the more bitcoins they bring with them, the more you have to invest and maximise your opportunities for increased returns.
There are several bitcoin Ponzi schemes in effect, with Bitcoin Pyramid being the biggest one around. Bitcoin Pyramid works by getting bitcoin depostis from its users. Each deposit is divided into three parts. 49% goes to your sponsor or your referer, the person who introduced you to the game, another 49% goes to a random member and the remaining 2% goes to Bitcoin Pyramid for maintenance fees. With every deposit made by other users, you can get something back so the more, the merrier!
DoubleBot, MultiCryptos and BTC-Goldmine are other examples of bitcoin Ponzi games which you can try your hand at. All of these games promise different levels of payouts so there's bitcoin to be made if you play your cards right.
Bitcoin Ponzi games are upfront about what they are: they will explain how it really works, they don't sell you promises of unbelievable returns based on exotic or complicated investments. They plainly state how they work and where the money comes from.
Be careful - there is a lot of risk involved!
As with all gambling, there is a lot of risk involved in bitcoin Ponzi games, as they are nearly identical to those in the real world. The safest advice to follow, the same as with all gambling, is to only invest what you can afford to lose and be grateful for any returns you may get. Ponzi schemes require constant investment to fund the payouts promised, especially if they promise generous ones. It can be something like a game of chicken: investing the money and holding on long enough so that you can get your money back and then some.