SEC-S17W3- Let's Talk About Ponzi Scheme

Investment scam that lures people into investing with little risk and higher percentage of returns is ponzi scheme. This type of investment has a particular pattern; the first step is promising investors a safe ground and high returns, they proceed to attract new investors, now they can make payments to the old investors through the newly recruited ones, the circle continues till they lack investors and the last step is that the ponzi scheme will collapse. The unfortunate ones are the investors that joined last. I had a similar experience which I will share but before then, let me use the contest tips given by the community as guidelines;

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Have You Heard About Ponzi Schemes

Yes, I have heard about ponzi scheme. Many that I can't even recall their names. I remember MMM and Loom.

My Experience with Ponzi Scheme

Yes, I have been offered to join several ponzi scheme in the past and I only fall victim of just one because it was from my friend.
I was offered to join MMM but then I wasn't working and I did not have much money to invest so I gave a blind eyes to it but I remember my Auntie being one of their biggest investor. Her experience on that particular ponzi scheme still hurts her till today because she invested a lot of money in it.

In 2019 or 2020 I can't recall the exact year but I remember I was in my third year in the University. My friends introduced LOOM to me and explained how it works, I wasn't interested at first but they shared their testimonies and pressurized me to join so I decided to join the group.
Below is the picture of LOOM, I will explain how it works.

Photo illustration of LOOM designed with Canva

The LOOM moves in a circular form, once you pay, your name will be added to the first ring ( blue). You can see that the circle is divided into two parts. Adylinah is in the center ( the oldest investors), all the people in green ring where invited by Adylinah so she can get her money back. Once Adylinah is out with her returns, one person from either up or down group will be the next to get paid ( either @eliany from up or @patjewell from down depending on the group @adylinah was). For those in blue ring, if you don't bring investors, you can't move to the green ring.

That was a simple illustration of how LOOM works. When I joined, I read the rules properly and noticed that there was nothing positive in it, I left the group chat and let my money go instead of bringing people to get scammed the more.

How to Detect Ponzi Scheme

I have a simple format to detect them, once the return is higher and too good to be true, I will know it's a ponzi scheme. Secondly, if one of the rule is; "invite others before you get paid" then I will be uninterested.

Pixabay

What I Think About Steemit

I don't think steemit is a ponzi scheme. No characteristics of ponzi scheme here on steemit. Your efforts and hard work determine your earnings. So obviously, this platform is far from seeing it as a ponzi scheme.

I will invite @anasuleidy, @josepha and @stef1 to join the contest. Thank you!