What is a Ponzi scheme?

Test Your Knowledge

1. What is the main source of returns in a Ponzi scheme?

A) Profits from a successful business

B) Interest earned from bank accounts

C) Money from new investors

D) Stock market dividends

2. What ultimately causes a Ponzi scheme to collapse?

A) Government regulation

B) Loss of internet access

C) Too many investors trying to withdraw at once

D) Lack of new investors to pay old ones

3. What distinguishes legitimate cryptocurrencies from Ponzi schemes?

A) Cryptocurrencies are always government-backed

B) Blockchain technology is transparent and decentralized

C) Cryptocurrencies promise guaranteed high returns

D) Crypto projects never fail