They all sound the same to me!
In: Other
They are effectively the same, but some differences:
In a Ponzi scheme you typically have “investors” that give their money to one guy. He then gives himself and the early “investors” payouts as new ones come in, but once the new joiners dry up, there’s no more money for anyone.
A pyramid scheme is similar except instead of paying to the one guy at the top, you’re paying to the person one level up from you on the pyramid. Same scheme, same outcome though.
Obviously those are illegal, so MLMs skirt the rules by having a product to “sell”. Probably important to note that the founder of the MLM Amway was very influential on writing those laws. Anyway, most of the sales will be to new joiners and not to the general public, so the effect is the same – once there are no new joiners the money dries up.
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