The author of this scheme says to post to 10 bulletin boards. Wow, that's good distribution -- you should be rolling in dough in no time! Let's see now... Assume that 10 people on each board jump in, that's 100 new people in the program. They each post to 10 more boards (netting another 100 people each) totaling 1,100 new participants in just 2 cycles.
That's too complicated. Let's just assume that 5 people join in each time and they each get 5 more people to join.
For each iteration, or "cycle", the 5 people at the top of the list are sent $1 by everyone who wishes to participate in the program. During the first cycle all the lists (5 of them) have just one person on them, namely Abigail, the originator. She sends the list to Barry, Bert, Bob, and Benny.
If everyone participates during the second cycle, a name is added to each of the 5 lists and 5 copies are made of each list bringing our total participants to 6 and our total lists to 25.
Barry sends copies to Carl and Casper plus 3 other people. Bert sends copies to Carol and Clay plus 3 other people.
If everyone participates during the third cycle, a name is added to each of the 25 lists and 5 copies are made of each list bringing our total participants to 31 and our total lists to 125. At this point, 30 people have paid Abigail $1.00.
Now, after 5 cycles we have 5^1 + 5^2 + 5^3 + 5^4 + 5^5 = 3,905 lists out there that all have Abigail's name in the first slot, Bert has 780, Barry has 780, etc.
Lets look at the problem a little differently. Ask the question "When am I going to make some dough?".
The answer is, when your name gets into the top 5 slots. Abigail, Bert, Barry, etc all started out with their name in the first 5 slots.
At tier 6 we have a dilemma. Each new participant adds himself to the 6th slot on the list but his recipients will only send money to the top 5! This little vicious twist will continue until the 11th tier, when all 10 slots are full and Abigail is finally bumped off!
The following chart shows how many people have sent money to the top 5 names on the list if all the copies that are sent out are successful in bringing in 5 new participants each time.
Looking at the participants column, Abigail totals $12,207,030 (assuming she never paid herself a dollar) when the eleventh tier people finally bump her off. This is because every single person who ever received a list up to now has had her name in position number 1. Bert and Barry have raked in a cool $2,441,405 million each and are poised at the top of the pyramid with the other three of Abigail's initial five. Third tier participants (who will be promoted to second tier) have made $488k, fourth tier have $97k, and so on (and that's a lot of mail to open!!).
At tier 11, the lists all have ten people already. For each new participant coming in now, a further 5 cycles must be run until she gets any money: $3125. After the next cycle, these new participants would get $15,625, and so on.
However, there are 9,765,625 *new* participants at the eleventh level and each one must be able to reach 3125 more new people to receive any money at all. So, for the new participants to all get their $3125, a total of 30,517,578,125 additional people must be contacted. That's six times the population of this planet.
Even if you join in the 6th round, you will not see penny 1 until tier 12, when 61,035,155 total people have participated.
These numbers are just too large! Let's try some smaller numbers.
If you assume an average of 2 new participants will join per cycle (but then you can't post it to usenet, can you?), your first money tier doesn't change because you will still be on the list for the exact same number of cycles.
Now, Abigail has made $2,046 at tier 11. This is a far cry from $50,000.00, but it does give other people a small chance of making a little money.
Do you? In order to know if you will make any money at all, you must answer the following questions :
Never.
Your name appears in slot 10. At least f you're honest. If you are lucky as well, you joined at tier 10 while it was empty, rather than bumping someone off the list at tier 11. You posted to usenet, where lots and lots of people read it (remember, *you* thought this was a good thing). Assuming you post to 10 newsgroups and 1 person joined from each group for a total of 10 new participants per tier, you must wait until tier 16 when 1,111,111,111,111,111 total people have participated.
Are those odds are better than the lottery and sweepstakes?
Notice, anyone coming in at tier 6 doesn't get paid until tier 12, when 111,111,111,111 people are in the scheme.
6. What have we learned?
These schemes always pay well if you are at the top of the list.
Who's at the top of the list? The guy trying to rip you off.
Unless you really understand how these schemes work, and can prove it mathematically, the odds are pretty good that someone wants your money to be in their pocket instead of yours.
Don't post these to usenet, you only show your ignorance or your greed.
$5.00 from everyone makes a very few people very rich for no work at all. You will never see your money again. You might as well give it to charity if it's burning a hole in your pocket. Or donate it to a teacher so that we can stamp out the ignorance that keeps these things going.
When I first replied to this article, I hastily put together a little bit of math to illustrate why pyramid schemes are a rip off. I have gotten numerous replies asking for permission to copy it and re-mail it. I also got two replies pointing out errors in my logic (and a few pointing out the overflow in my table). The logic error wasn't terrible, but did skew the pyramid 1 tier.
So, we put together something you can copy and distribute that has better foundations, and will hopefully be more readable.
Maybe this will help eliminate all the "Make Money Fast" posts and the inevitable flaming replies that are clogging even the most docile of newsgroups.
Written by :
Peter Blemel (peter@mgtscienes.com)
Clay P. Breshears (clay@cs.utk.edu)
Barry Keeney (barry@mgtsciences.com)