Ponzi Scheme
By Cryptomcmillan1 | Updated on May 24, 2020
A Ponzi scheme is also referred to as pyramid scheme, and typically takes the form of an investment scheme which pays existing investors with funds collected from new investors. Ponzi schemes usually come with the promise of high returns and little risk, while requiring members to actively recruit more members to join the scheme. Once recruitment stops the schemes usually go bust as they run out of funds to pay existing members.
Related Terms
Off-chain
It refers to transactions occuring outside the blockchain and executed instantly.
Stop-loss Order
Conditional market order to sell at the next available price, excuted if the price of an asset falls below set-upon limit
Transaction Fee
A payment to the network for performing a transaction to be recorded on the blockchain.
Directed Acyclic Graph (DAG)
Directed acyclic graphs refers to a data structure that is built in one single direction, yet branches out and never repeats.
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