In my previous post (Part - 3), I had told you about second scam that can happens in Web 3 world, that is to Be extremely cautious about crypto payments or exchanges. I had told you there to always classify addresses of different blockchains and cryptocurrency before sending or exchanging your funds with someone on the internet and also told you that before sending your money to anyone, ask the company what they do? and if possible check their address on the blockchain network.
Now, let's talk about third scam that is happening on Web 3 internet.
3- Beware of Ponzi and Pyramid Scams :-
Beware of this type of scam, because this type of scam can even sold your house and left out you with nothing and being fired out.
Ponzi Scheme is defined as someone in Web 3 asks you to donate a certain minimum investment for their project and claims you that you will receive a portion of the investments of users who join them for their project after you.
If you are a economics student, or a science student and use your skills, you will particularly know that This is the way of making business by hiring employers for their Work. At this point, you should particularly grow your knowledge of Economics and Business making.
This scam is not only hiring by the original people who had messaged you to join them.
You might not know these people at the beginning, they will follow straight way to making the complete business and making themselves as CEO, top position of any work, and leaving you working under their shoes. I will tell you below, how this scam starts and grow, keep reading.
Ponzi Scheme == Pyramid Scheme
What is Pyramid Scheme and it's types ?
Pyramid Scheme, as you can relate by it's word is a scheme which grows and follow Pyramid building.
Pyramid Making is of two types :-
1- Down-Up Approach.
&
2- Up-Down Approach.
First let us talk about Down-Up Approach,
1- Down-Up Approach:-
a) In this approach, company will start from below with 2-3 original members of the company or 5-10 group of people.
b) Then these people will buy some little quantity of products, such as in ETH or BTC, or any other market commodity.
c) These people then goes on promoting their product, which involves great risk, as huge loss will be done in promoting that commodity or sometimes small gain is seen with respect to market value of that commodity.
d) By promoting, they got some more persons to promote their commodity, and now the original group, who had started the company, promotes themselves into second level of pyramid triangle.
e) Then the original group gets some little income, which is generated by people who are working for them now at low level from them.
f) Now, after some time, when new people join their company, the low level people will move up to another level, and will get double the money with respect to original people who got that in that place, and the original peoples will move up again into another level of pyramid, that is third level and earn more than second stage groups. This continues and original peoples or groups will ultimately becomes CEO of that company.
Disadvantages of Down-Up Strategy:-
1- Low pace of Growth :- As this approach, will require huge loss, and getting many people at start to keep on promoting their commodity, there can be a low pace of growth of that company.
2- Organizational Behaviour doesn't match of different individuals here :- Most people in this approach will get on judging one another, that will sometimes stop the growth and might end a company, if not managed earlier.
3- Lack of someone big who is allrounder :- As this approach, follows up from down to top steps in pyramid, all groups of people who are working under this approach will have same mindset, and there can be no big post technical analyst, who can tell the company what is going on and how to improve it.
Advantages of Down-Up Strategy :-
While this approach in the company is much more complex to handle at the beginning and many other times during work, it can lead to some fruitful results in development of the company.
2- Up-Down Approach:-
This approach is just opposite to Down-Up Approach. Consider now after Down-Up Approach, the company CEOs who were a group of people, who had started the company at the beginning, just formed will give jobs to new comers in their company at different or multiple positions. That CEO, has a full of small team members group, that control the rest of the company. Now, the top level CEO, is also feeling relaxed, and with the good usage of organizational behaviour in their company, the company will progress at great pace.
This is how Down-Up Approach works.
Advantages of Down-Up Approach :-
1- This type of approach often leads to much fastest solutions, to the problem that occurs inside and to the company.
2- Straight and also clearer communication happens inside this approach, and all groups do respect all people that are working for the company.
3- Usually this type of approach leads the company to company to it's widespread popularization, and this makes all the groups feels lighter when they work inside the company. Examples of this type of approach includes companies like Google, Apple, etc.... .
Disadvantages of Down-Up Approach :-
1- This approach will definitely lead to faster solutions of the pre-defined problems, that will come to the company, but for newest types of problems, that will come inside the company, there will be less creative thinking than the company who follows Up-Down Approach.
2- Each person and group in this approach will feel equal wattage and high standards of working in big company like Google or Apple, so this can also cause problems in leadership impact to the company, usually this type of approach will lead the company to Political way of thinking.
So, the real question ?
Which pyramid Down-Up Approach or Up-Down Approach, Ponzi scheme or scam is built on ?
Ans :- Ponzi Scam in Web 3 internet can take place by both approaches, weather it is Down-Up Approach or Up-Down Approach, but as mostly seen, it takes place via Down-Up Approach, so be careful and take full notice while someone wants to does it.
After reading this article, Ponzi Scammers behave like :-
This is for this post.
I will talk about more scams in my later posts.
Thank you for reading.
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