web3/concepts/ponzi-scheme.md

Ponzi Scheme

A type of investment fraud in which old investors are paid out from an influx of new investors. These type of schemes are ultimately unsustainable and are destined to collapse when outflows exceed inflows or the operators abscond with the funds.

Crypto asset are often referred to as obscured or self-organizing Ponzi schemes.

References

• [@krugman_bitcoin_2018]
• [@hutchison_postmodern_2012]
• [@bartoletti_dissecting_2020]