Dissecting Ponzi schemes on Ethereum: identification, analysis, and impact

Understand

Ponzi schemes are financial frauds which lure users under the promise of high profits.

• Actually, users are repaid only with the investments of new users joining the scheme: consequently, a Ponzi scheme implodes soon after users stop joining it.
• Originated in the offline world 150 years ago, Ponzi schemes have since then migrated to the digital world, approaching first the Web, and more recently hanging over cryptocurrencies like Bitcoin.
• Smart contract platforms like Ethereum have provided a new opportunity for scammers, who have now the possibility of creating "trustworthy" frauds that still make users lose money, but at least are guaranteed to execute "correctly".