Pyramid Schemes in Crypto: Dodging Digital Deceptions

Pyramid Scheme is a fraud scheme with a top-down hierarchical structure.

What is a Pyramid Scheme?

A pyramid scheme, like a Ponzi scheme, is an “enrichment” scheme that benefits those at the very top of the organization.When using a financial pyramid scheme, it is not necessary to have a specific product to sell. For example, the scheme can target people who want to make money by inviting them to pay a fee to join the organization.

Those who join are promised money from those they recruit. The pyramid structure is such that those at the top get money and those at the bottom usually lose money. Pyramid schemes are some of the oldest fraudulent schemes, and yet, unfortunately, they have not lost their relevance due to their manipulative and predatory tactics.

Related terms

Nonce in Cryptography: Ensuring Unique Transactions

rbitrary number, intended to be used only once; it is generated when the transaction is hashed by the miner.

More details

Crypto Ticker Symbols: Identifying Digital Assets

Acronym that is used to uniquely identify cryptocurrencies.

More details

Sharding: Boosting Blockchain Performance

Part of a blockchain network divided into several shards that have their own data.

More details

FUD: Fear, Uncertainty, Doubt in Crypto Markets

Acronym that stands for Fear, Uncertainty and Doubt. It is a strategy to influence the perception of certain cryptocurrencies or the cryptocurrency market in general by spreading negativity.

More details

Encryption in Crypto: The Key to Security

Method by which information can be turned into code.

More details

Crypto Trading Bots: Automating Your Trades

Automated software that perform tasks such as trading cryptocurrency.

More details

Monetary Policies in Cryptocurrency: Controlling Supply

Set of rules that a country's central bank sets to control the supply of money.

More details

Crypto Market Dominance: Understanding Power Distribution

Measure of Bitcoin's value in the context of the larger cryptocurrency market.

More details

Digital Signatures: Ensuring Security in Blockchain

Method of authenticating a digital message.

More details

Governance in Crypto: Deciding the Network's Direction

People or organizations that have the power to make decisions about a project.

More details