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

Jimmy buys a bunch of candy from you. He then finds five friends and sells them candy, then gives you some of the money. Then those five friends sell their candy, give Jimmy some of the money they earn, and then Jimmy gives you some too. And so on.