Reply to post: Re: Incorrect Reporting

OneCoin lawyer trial kicks off in NY as cryptocurrency founder remains on the lam

Michael Wojcik Silver badge

Re: Incorrect Reporting

Pyramid scheme, Ponzi theme [sic], Multi level marketing.

They are all the same.... Or am I wrong?

You're wrong. Ponzi schemes are not pyramid schemes. Ponzi schemes are flat, not hierarchical; the controllers pay investors leaving the pool using receipts from new investors. There's no pyramid.

MLM schemes are indeed pyramid schemes, with the addition of actual exchange (of goods, as with Amway / Alticor or Herbalife, or of real property, or of financial instruments, etc) between network members and a wider market. I'm not aware of any MLM schemes where the exchange economic activity hasn't been dwarfed by the membership economic activity, i.e. the transfers of wealth up the pyramid. I wouldn't touch them myself - at the very best they're hugely inefficient at their ostensible non-pyramid activity, and the property being marketed is often rubbish - but they're not pure pyramid schemes.

Also, all capitalist economic organizations require an influx of new participants to grow. Some are content to grow "organically" by selling something of (perceived) value to a market; some are even not particularly obsessed with growth and are comfortable more or less maintaining a consistent stream of income. But it's not the need for new participants that distinguishes pyramid schemes (including MLMs) and Ponzi schemes from non-fraudulent businesses - it's the excessive reliance on them.

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