The harshest thing in the crypto world isn't the crash, it's the scams! Every year, countless people get trapped by traps like "earn 10% in 90 days" or "earn 500 by referring 1 person". My friend fell into a Ponzi scheme last year, invested 100,000 and only got back 20,000 after three months, the scammers just ran away! Today, in plain language, I'll expose these two money-making scams, and teach you 5 survival tips. Key points first: Ponzi schemes use new money to pay old debts "robbing Peter to pay Paul", pyramid schemes rely on recruiting heads to share money "upper line cuts lower line", both need new leeks to sustain, all high returns low risk are pits, Bitcoin itself is not a scam! Remember these lines, and never be a sucker sending money!

First, understand: What is a Ponzi scheme? The "robbing Peter to pay Paul" survival game (My friend's tearful lesson)

The founder of the Ponzi scheme is Charles Ponzi, who scammed hundreds in the 1920s with this trick, and today's scammers just put on a "cryptocurrency" disguise! My friend Xiao Li encountered a "crypto investment product" last year, promising 11,000 back in 90 days for 10,000 invested. He first put in 10,000 and really got 1,000 interest at maturity, got excited and invested another 100,000, but after waiting half a year, the scammers blocked him and ran off, losing 90,000 net!

The logic of this scam is super simple: "use new suckers' money to pay interest to old suckers".

  • The scammer first finds the first person, collects 1,000 bucks, promises 10% interest in 90 days;

  • Before maturity, recruits two newbies, collects 2,000 bucks, uses 1,100 to pay the first person, and persuades him to invest more;

  • The further along, the more people needed to recruit; once no new suckers can be found, the cash flow breaks, and the scammer either gets caught or runs off with the money.

The most outrageous one I've seen is a "Bitcoin mining machine investment", claiming daily returns in coins from renting miners, but there were no miners at all—just using new users' money to pay old ones. When it collapsed, hundreds of people lost millions combined, too tragic!

Next, understand: What is a pyramid scheme? The upgraded MLM version of "recruiting heads to share money" (Don't get fooled by the MLM disguise)

Pyramid schemes are even "harsher" than Ponzi—they force you to become a scammer! The scammer says, "Spend 1,000 bucks to buy a distributorship, refer 1 person and earn 500", sounds profitable, but actually just passes the loss to you!

Example: The scammer makes you spend 1,000 to buy a "cryptocurrency agency", you refer one person to buy and split 500; to break even, you need to refer two; the people you refer need to refer two each to break even, layer by layer like a pyramid. The lower levels get harder to recruit, and when no one is left, the whole thing collapses, with only the top scammers making a fortune.

Now many scammers disguise as "legitimate MLM (multi-level marketing)", claiming to sell mining machines or courses, but there's no real product—recruiting is the core. My mom almost got scammed by a "blockchain course", saying buy the course and refer people for commissions; luckily I stopped her in time, or it would've been a big loss! Remember: Real MLM makes money by selling products, pyramid schemes only by recruiting—big difference!

A table to clarify: Ponzi vs Pyramid, no more confusion!

Comparison Dimension Ponzi Scheme Pyramid Scheme
Core Mechanism Uses new users' money to pay interest to old users, no need to recruit Must recruit new members to earn, more recruits mean more earnings
Disguise Crypto investments, mining hosting, high-interest lending Crypto agencies, blockchain courses, fake MLM companies
Earning Logic Scammers control the funds directly, you just wait for returns You have to become a "scammer" yourself, recruit to get paid
Collapse Reason Can't recruit new suckers, cash flow breaks Pyramid base has no one to take over, recruiting gets harder

Simply put: Ponzi is "one scammer scamming everyone", pyramid is "scammer scams you, then you scam others"—both treat you as a leek to harvest!

5 tips to avoid all scams! No more being a money-sending sucker

These 5 tips are summarized from countless pitfalls by me and people around me—simple and memorable, follow them to avoid 90% of losses:

  1. "High returns low risk" are all traps! There's no surefire profit in crypto; those promising "50%+ annualized" or "zero-risk passive income"—block them directly! I saw a "DeFi investment" claiming 100% annualized, turned out to be a Ponzi, collapsed in half a month;

  2. Don't touch investments that come to you! If you suddenly get a DM or WeChat saying "a blockchain project that's a sure win", 99% scam—real profitable projects don't seek you out;

  3. Check their background first! Legit investments/projects are registered with regulators like the US SEC or China's CSRC—unregistered ones, pass; I checked a "crypto fund" before, no official website, wisely didn't invest, and it blew up later;

  4. Don't invest in what you don't understand! Many scammers use terms like "decentralized" or "smart contracts" to dazzle you—don't get confused; if you can't understand what the project does, no matter how hyped, don't invest;

  5. If scammed, report immediately! Don't feel embarrassed—reporting stops scammers from harming others and gives you evidence, maybe even recover some losses.

Final clarification: Bitcoin really isn't MLM! Don't get misled by rumors

Newbies often ask "Is Bitcoin a Ponzi scheme?"—pure nonsense! Bitcoin is a decentralized digital currency, secured by math and cryptography, used for buying things or transfers, just like USD or RMB—it's a form of money.

Though some scammers use Bitcoin for Ponzi or pyramid schemes, that's not Bitcoin's fault—just like using RMB for fraud doesn't make RMB a scam. I've used Bitcoin to buy overseas goods and transfer coins, all legal and compliant; it depends on how you use it—don't mix currency with scams!

Heart-to-heart at the end: Making money in crypto takes skill, not "passive income"

I've been in crypto for 5 years, seen too many wanting quick riches via "high-interest investments" or "recruiting"—all got harvested in the end. Real earners are either tech-savvy developers, long-term value holders, or analysts who understand projects—no one gets rich from scams.

Remember: No free lunch from the sky—those promising "low input, high return" are all out to scam you! Before investing, ask more whys, do more research—better than anything.