Navigating the ocean of projects based on cryptocurrencies, it is unfortunately common to find numerous scams and financial pyramids disguised as “investment opportunity”. This is not the case with SatoshiPyramid, a scheme that makes it clear that it is a pyramid.
In Brazil and in several other countries financial pyramid schemes are criminalized, and this is not by chance. Due to the unsustainability of the pyramid structure, it is a business with an expiration date and most participants inevitably end up suffering losses.
Even so, an anonymous person thought it would be a good idea to set up a clear pyramid scheme. The level of transparency is even hilarious, it's in the name, in the initial figure of the site, and all that's missing is an Egyptian god like the mascot Anubis.
The coup is there, whoever wants it falls, isn't it? But for educational purposes, we are going to explain as transparently as possible how a pyramid works, and nothing better than using the most transparent currency in the world to do this, Bitcoin Cash.
How does a pyramid scheme work and why does it always go wrong?
Behind all the pretty speech usually used by scammers, the pyramid structure is always the same. The new “investors” hand over money to the old ones and look for new people to feed the scheme.
The problem is, if each person has to invite at least two people to make a profit, and this new tier of participants must do the same thing, at some point there aren't enough people left to keep everyone in profit.
As early as the eleventh tier of new entrants, a pyramid is already in demand more than the US population. Source: SEC.
The bitcoin cash pyramid website even shows a similar structure, without hiding it:
However, these layers have another meaning. At each level, SatoshiPyramid doubles the number of satoshis for users.
Basically, the pyramid manager holds the funds of new players until the value is double the previous tier. When the next tier is reached, he pays the participants from the previous tier with that money, essentially doubling the players' BCH.
However, as we have seen before, this cannot last forever. Therefore, the scheme gives a deadline of 60 days, and if it doesn't work anymore, the creator keeps everything. “If the pyramid extends one level of your entry, before the clock hits zero, you double your money. If not, you lose everything.”
SatoshiPyramid has already collapsed, taking with it the amount of the last two levels, 4122 BCH, in other words, R$46 million.
INSS or SatoshiPyramid, which is worse?
Another very common pyramid scheme is the INSS. Despite being legalized, the same pyramidal structure is made with Public Security, in which a worker needs to pay for the retirement of another.
Unlike SatoshiPyramid, which makes it clear that it is unsustainable, many people believe that the INSS is sustainable. In this sense, the INSS, in addition to being a pyramid scheme, is also a scam, as it seeks to deceive citizens.
If you want to know more about why the INSS is a pyramid, we mathematically explain in the post “ INSS: if you are under 40, forget about retiring for it ” the reasons.
Therefore, a clear pyramid scheme such as Bitcoin Cash is less detrimental to society than the government pyramid, authorized and sanctioned by law.
- Gregório Duvivier calls bitcoin a "story", but defends the largest pyramid in Brazil
**This post is intended to show you how a pyramid works so that you can avoid as many pyramids and scams as possible. Please don't put money into pyramids!
Source: Scheme or scam? An empirical analysis of Satoshi Pyramid
Bitcoin Cash Pyramid content is the most transparent in the world, understand it first appeared in Cointimes .