Eli5: what is a pyramid scheme?

Question

I know the term but I’ve never actually been able to understand what it is and what happens in one

In: 2

Answer 1

I’ll tell you if you give me $5. Then you get people to pay you $5 if you tell them, but I get a cut of all those. Then you get those people to get others to pay them for the explanation, and you get a cut of their income, and of course, I’ll get a cut of the income you get from that. We will all be rich! But I’ll be the most rich.