this post was submitted on 29 Jul 2023
642 points (80.9% liked)

Showerthoughts

30032 readers
723 users here now

A "Showerthought" is a simple term used to describe the thoughts that pop into your head while you're doing everyday things like taking a shower, driving, or just daydreaming. A showerthought should offer a unique perspective on an ordinary part of life.

Rules

  1. All posts must be showerthoughts
  2. The entire showerthought must be in the title
  3. Avoid politics
    • 3.1) NEW RULE as of 5 Nov 2024, trying it out
    • 3.2) Political posts often end up being circle jerks (not offering unique perspective) or enflaming (too much work for mods).
    • 3.3) Try c/politicaldiscussion, volunteer as a mod here, or start your own community.
  4. Posts must be original/unique
  5. Adhere to Lemmy's Code of Conduct

founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
[–] mint_tamas@lemmy.world 8 points 1 year ago (3 children)

Is there a difference between a pyramid and a ponzi scheme?

[–] Sarcastik@lemmy.world 5 points 1 year ago* (last edited 1 year ago)

It's used so interchangeably these days that I'm inclined to say no, but an oversimplication is that a ponzi scheme is always illegal and is more detailed in its mechanics (as named after conman Charles Ponzi). Wheras a pyramid scheme (or more commonly known: MLM) can actually be legal depending on how it's constructed.

A ponzi scheme involves a conman who scams his customers by taking massive profits from their investors and requires a constant stream of new investors to pay off the old ones. This is fraud.

A pyramid scheme usually involves some type of product and pays huge bonuses to the recruiters at the top for bringing in more people below them from the investment of new people below them. This is taxing uneducated people but can be legal.

TLDR: capitalism is more akin to a pyramid scheme and not at all like a ponzi scheme.

[–] A2PKXG@feddit.de 4 points 1 year ago

Yes, but most people using the term don't know their defitition, so knowing the correct definition is of limited usefulness.

Ponzi is for Investments that offer high returns, by marking the principal as gains. Pyramid schemes sell stuff, through a pyramid of salesmen. Each one earns a percentage of the revenue of his underlings and is encouraged to recruit more underlings.

[–] markr@lemmy.world 3 points 1 year ago

That's a good question. Amway is perhaps the architype pyramid scheme. They actually do sell products, but primarily to the marks they con into being 'amway agents' or whatever they call them. The marks, in addition to buying the shit, also kick back part of the proceeds from any sales up the ladder. A ponzi scheme doesn't actually do anything with the marks investment money other than use it to pay off the people in on the con.