what s the difference between a ponzi scheme and a pyramid scheme 
both a ponzi scheme and a pyramid scheme rely on a steady stream of new investors who are motivated by reports of the big profits earned by early investors a ponzi scheme repays each investor using money deposited by new investors falsifying records of nonexistent transactions to characterize the money as profit a pyramid scheme usually promises a lucrative business opportunity that requires an initial investment each investor is rewarded for attracting new investors the earliest participants really do make a profit earning money for every new recruit and those the new recruit signs up each new recruit makes less money than the previous one until no more recruits can be found 