Both collapse. They just fail in different ways.
Direct answer
In a pyramid scheme, you pay to join and earn mainly by recruiting others, and money flows up through levels. In a Ponzi scheme, you invest and are paid fake "returns" from newer investors' money. Both fail when new money slows and both are illegal in many countries.
Key differences
| Pyramid scheme | Ponzi scheme | |
|---|---|---|
| Promise | Earn by recruiting | Earn by investing |
| Money flow | Up the levels | From new to old investors |
| Role of products | Often token | Often vague investments |
Warning signs
- Pay to join or buy a starter kit.
- Income depends on recruiting.
- Pressure to bring in friends and family.
- Vague answers about real product sales.
Where Teyro fits
Teyro's How Scams and Financial Fraud Work course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
If recruiting matters more than selling, walk away. This is general education, not advice.
This is general education, not personal financial advice.
