Business: Scam: Financial
Honest Ponzi Scheme   (+4, -5)  [vote for, against]

This is a classic Ponzi or 'pyramid' scheme such as is advertised in countless spam emails. The difference is that rather than trying to hide the workings of the scheme behind a barrage of marketing hype this will be completely up-front and honest about how it works. With the aid of worked examples and diagrams, the spam emails and websites associated with this scheme will explain precisely how it works and how it is geared so that a small number of early entrants to the scheme will make money while everyone else will lose. In this way I shall evade any fraud charges as it will be impossible to assert that I tried to deceive anyone. The scheme will still work though as there will be enough people who will sign up in the hope of being one of the early entrants.
-- hippo, Nov 01 2010

Bitcoin Randomiser
does exactly what it says on the can [kinemojo, Nov 04 2010]

Interesting story
Basically what it says is that some people might be signing up to Ponzi schemes - knowing that they're Ponzi schemes - in order to make money, on the basis that the first few people will make a decent return. [hippo, Mar 26 2012]

No, you won't avoid fraud charges... not exactly. You'll be done for unconscionable conduct, which is pretty much the same as a fraud charge.
-- infidel, Nov 01 2010

[+] for sheer chutzpah.
-- gisho, Nov 01 2010

[hippo] Could I be near the top of your email list? [+]
-- Boomershine, Nov 01 2010

[Boomer] The top 100 places will be auctioned off - send me your non-refundable bid now...
-- hippo, Nov 01 2010

I like ponzies that bloom in the spring.
-- dentworth, Nov 01 2010

[hippo] Wait, that sounds like a simple raffle, not a Ponzi scheme. Or maybe now, just before I send off my NRB, you explain "precisely how it works" just a little more.
-- Boomershine, Nov 01 2010

May as well make it a phone-in and wrap it into a TV show too.
-- Jinbish, Nov 01 2010

By the time people figure it out you should have Madoff with the dough.
-- infidel, Nov 01 2010

Are you considering investing in an [Honest Ponzi Scheme] ?

I can save you thousands of dollars by showing you how these schemes work. Send just $10 USD and you'll receive a personal email explaining how to protect your investment.
-- normzone, Nov 01 2010

Ponzi Scheme? Isn't this just called A Bank now?
-- xenzag, Nov 01 2010

If you're considering sending $10 to [normzone] for his information on protecting your investment, think again! For only $15, to cover administrative costs, I'll tell you where to get the same information for free.
-- hippo, Nov 01 2010

[hippo] Hmm, free information...only $15? This deal seems almost too good to be true.
-- Boomershine, Nov 01 2010

Baked in the '80s '90s as the Pilot Game, the Airplane Game and various other names. They were quite upfront about how it worked, just not so forthcoming about how it (inevitably) didn't work. It still floats around from time to time. Ecstasy: it's a hell of a drug.

Don't kid yourself that this is legal in any way shape or form though. These schemes are quite explicitly outlawed, fraud or no fraud.
-- BunsenHoneydew, Nov 02 2010

Couldn't I still *donate* my $15 to [hippo]? I want to help with this cause.
-- Boomershine, Nov 02 2010

//May as well make it a phone-in and wrap it into a TV show too.//

Talk about jumpin the shark.
Sorry, I read that as Fonzi scheme.
-- 2 fries shy of a happy meal, Nov 02 2010

[bigsleep] - a pyramid game depends on an exponential growth of new members to hand over their entry fee to the recruiter on the next step up the ladder, in the hope that they too will be able to climb that ladder and recruit their own newbies.

For example, the "Airplane" or "Pilot" game had a "pilot" at the top of the pyramid, with two "co-pilots", four "stewards" and eight "passengers". The pasengers hand over a grand each to their recruiting steward, who hands it on up to the co-pilot, thence the pilot, who "flies away" (leaves the game) with $8k. Everyone steps up a level, and the stewards are supposed to go out and recruit two passengers each.

So the game depends on doubling the intake on every round. Inevitably, you run out of suckers.

How anyone, including friends of mine, ever thought this was a good idea, I'll never know. I blame the Newage (rhymes with "sewage") "positive thinking" charlatans myself. It was, at least around here, adjacent to and intersecting with that crowd.
-- BunsenHoneydew, Nov 03 2010

This is it - as with speculation bubbles, if you get in early enough and manage to get out before the whole lot comes crashing down aroung you, you can be personally very well rewarded indeed. Getting in late is for suckers.
-- zen_tom, Nov 03 2010

There's still a variation of the aeroplane game getting around. We sacked a staff member from the bank earlier this year for trying to recruit people to the Travel Game. In that one you buy $6000 worth of travel then resell it, in 6 lots each of $3000 or something similar. Dodgy.
-- infidel, Nov 03 2010

The thing about Ponzi schemes is, even if the original creator is 100% honest, the early entrants have a strong incentive to be dishonest when they try to promote the scheme.
-- kinemojo, Nov 04 2010

A Ponzi scheme is not quite the same as a Pyramid Scheme. In the latter, new members of the scheme are enticed in by the prospect of making money by directly recruiting more new members. In a Ponzi, the scheme creator promises an unsustainable return to everyone by topping up the payments to early entrants with the money he is supposed to be investing on behalf of newer members. So an 'honest Ponzi' is a contradiction in terms.

Similarly, Pyramid schemes can never be 'honest' because to be so there would have to be a cut off point where new members were not accepted because the likelihood of being able to co-opt in new recruits is so low, which would mean that you had just bilked the last intake of new members, which means your cut off point should have come earlier etc, etc. So, again, a contradiction in terms.
-- DrBob, Nov 05 2010

This idea has been baked, baked, and baked again. It now consists of a little chip of carbon.
-- Voice, Mar 27 2012

That's not necessarily a bad thing; compress it enough, and you'll get a diamond.

People will pay money for those ...

// the scheme creator promises an unsustainable return to everyone by topping up the payments to early entrants with the money he is supposed to be investing on behalf of newer members. So an 'honest Ponzi' is a contradiction in terms. //

Ever so slightly like a Government-run pension scheme, then ?
-- 8th of 7, Mar 27 2012

random, halfbakery