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Reference.org
Pyramid scheme
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<p>A pyramid scheme is a <a href="/facts/Business_model/TL9XXsQa">business model</a> which, rather than earning money (or providing <a href="/facts/Return_on_investment/M8qYt4Yf">returns on investments</a>) by sale of legitimate <a href="/facts/Product_(business)/l9P9fUJa">products</a> to an end consumer, mainly earns money by recruiting new members with the promise of payments (or services). As the number of members multiplies, recruiting quickly becomes increasingly difficult until it is impossible, and therefore most of the newer recruits do not make a profit. As such, pyramid schemes are unsustainable. The unsustainable nature of pyramid schemes has led to most countries outlawing them as a form of <a href="/facts/Fraud/VyU68aBy">fraud</a>. </p><p>Pyramid schemes have existed since at least the mid-to-late 19th century in different guises. Some <a href="/facts/Multi-level_marketing/P5frBGnS">multi-level marketing</a> plans have been classified as pyramid schemes. </p>