	After checking the following Investopedia article about the Pyramid Scheme, I can totally believe that I have met and seen individuals whom are trapped into believing this type of scheme works for the long term advancements of a financial situation by continuously adopting new members. According to New York Attorney General Letitia James, a pyramid scheme is a multi-level fraudulent system that depends on recruiting an ever increasing amount of investors where an individual pays an introductory sum of money that will be passed up chain where initial promoters at the top require a large base of investors to support the scheme. This type of scheme often is illegal regardless whether it involves a direct sale of a product or not which stresses the importance of being careful when someone is advertising a group or program with the alarming signs of paying an initial sum of money for a membership while still be under obligation to recruit more individuals especially when no legitimate product is even sold. I have personally never participated or invested in such a scheme because they are easy to spot and often look bogus but do see a whole lot on my social media accounts; for example, there is this Instagram influencer who advertises becoming part of a kangen water purifying machine that costs almost five thousand dollars where they also offer a compensation plan to earn direct sales commision. Another example would be a paid trading membership where you recruit traders on Facebook to create a paid group chat where people get commission for advertising and getting people to join their group. These sorts of pyramid schemes where money goes up to early adopters can sometimes be difficult to detect because more often than not, they are set in a way that makes it possible for members to thrive off of it, however the article on Investopedia makes it clear that these sorts of schemes eventually have to tumble until the entire structure collapses due to unsustainable payment flow. This means that once the lowest level begins to shrink, the entire model is supposed to break down because it is impossible for these schemes to inevitably last forever. On the other hand if an individual is aware of what to look for, scams as these become obvious because of the similarities that pretty much as the hallmarks of such scheme. According to the U.S. Securities and Exchange Commission, the tip-offs regarding this type of fraud can be recognized under the following criterium: 1) Emphasis on recruiting, 2) No genuine product or service sold, 3) promises of high returns in short period of time, 4) Easy money or passive income, 5) No demonstrated revenue from retail sales, and 6) Complex commission structure. Once these red flags are portrayed chances are there has to be some sort of pyramid scheme structuring that is taking place where money is moved up the pyramid through a network of individuals looking to take part of such an arrangement. The victims of such act is anybody who desires to take the easy way out by believing in something bonus and does not necessarily understand the risk associated with such proceedings. In conclusion, these schemes are often fabricated to exist under some sort of secrecy that shields and covers for their endeavor; however it is clear by now that all pyramid schemes will eventually collapse once an entropy point is finally reached. This will result is an imbalance between the lower levels where payments end up getting delayed near the end which will require people up the chain to wait more for their payments often forcing them to wait for a prolonged period of time without a candid income. These sorts of schemes are posed to fail and should be avoided by any investor or individual who considers the actual risk associated with pyramid schemes. 
