The Ponzi Scheme 101: A Ponzi’s Life Cycle and Ways to Survive, Part 1
2 min read
We construct the model of a simple Ponzi scheme, deduce how long the scheme will last and when a rational promoter will skip town. Basically, most of the dead P2P platforms or asset management products we see in our daily lives are Ponzi schemes. Construct the Model of a Simple Ponzi Scheme Generally speaking, there are only two kinds of participants in a Ponzi scheme: promoters who attract capital by promising incredibly high profits; and investors who pay money for above-average profits. Eventually, the promoters will run away when the funds are not enough to pay back every investor. To simplify…...
Alan Zhang Alan Zhang is an investor and market gazer that leverages greatly on data technology in decision-making. He is familiar with the different financial markets of China including the stock, futures and cryptocurrency market. Further, he participated in the establishment of alternative investment markets like black tea since 2014 and was responsible for the private placement of Huangshan Tourism shares (600054.sh) in 2015. He is currently also a Financial Analyst at X-Order, an innovative research institute that attempts to combine cross-disciplinary fields such as distributed computing, computational game theory, artificial intelligence and cryptography to discover future extended orders. It was founded by Tony Tao, who is also a partner at NGC Ventures.
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