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
Fear of Missing Out (FOMO)
Refers to the feeling of apprehension for missing out on a potentially profitable investment opportunity and regretting it later.
Generally an expression describing investors' fear of missing out the good timing of buying cryptocurrencies that could eventually be profitable
Genesis Block
It is the first block of data that is processed and validated to form a new blockchain, typically called as 'block 0' or 'block 1'.
Secure Asset Fund for Users (SAFU)
A feature created by Binance which contains reserve funds that can be used to reimburse users in case of a catastrophic event (eg. exchange hack)
Utility Token
cryptocurrency tokens with specific utilities on a network besides being used as medium of exchange and investment vehicle.
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