Ponzi Scheme
By Cryptomcmillan1 | Updated on May 24, 2020
A Ponzi scheme is also referred to as pyramid scheme, and typically takes the form of an investment scheme which pays existing investors with funds collected from new investors. Ponzi schemes usually come with the promise of high returns and little risk, while requiring members to actively recruit more members to join the scheme. Once recruitment stops the schemes usually go bust as they run out of funds to pay existing members.
Related Terms
Ledger
A record of financial transactions that cannot be changed, only appended with new transactions.
Proof of Stake (PoS)
A consensus algorthm that assigns block validation queue based on the coins/token locked in by the validator.
Trustless
Entirely verifiable, without needing to trust or assume an action is done completely and in good faith.
Genesis Block
It is the first block of data that is processed and validated to form a new blockchain, typically called as 'block 0' or 'block 1'.
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