> The heart of a ponzi scheme is continually securing new investments to pay out earlier investors.
The difference is the nature of the deception. In a ponzi scheme, you accept an investment, buy yourself a new house, and then tell the investor they're earning 10%. You flat-out lie about what you did with the money, and year after year you you keep enough cash around to make incremental pay outs as necessary to maintain the illusion of a stable, well-performing portfolio.
It's 100% deception and the element of theft is obvious.
With GroupOn, the risks may be downplayed and the potential benefits exaggerated, but certainly right now no one should invest without understanding that investing means significant risk. Furthermore, it's been published what money has gone to cash out early investors, and what money has been invested into the company.
The ethics are definitely questionable, but then the ethics of a casino are questionable, too. The ethics of a ponzi scheme are not questionable-- it's straightforward lying and stealing.
The difference is the nature of the deception. In a ponzi scheme, you accept an investment, buy yourself a new house, and then tell the investor they're earning 10%. You flat-out lie about what you did with the money, and year after year you you keep enough cash around to make incremental pay outs as necessary to maintain the illusion of a stable, well-performing portfolio.
It's 100% deception and the element of theft is obvious.
With GroupOn, the risks may be downplayed and the potential benefits exaggerated, but certainly right now no one should invest without understanding that investing means significant risk. Furthermore, it's been published what money has gone to cash out early investors, and what money has been invested into the company.
The ethics are definitely questionable, but then the ethics of a casino are questionable, too. The ethics of a ponzi scheme are not questionable-- it's straightforward lying and stealing.