How to spot difference between legit investment and ponzi schemes
Editor's note: Michael Ajah, the NAIJ.com partner blogger, reveals how to spot difference between legit investment and ponzi schemes.
Ajah is a Computer Science student of the University of Port Harcourt. He is the CEO of NaijaTechGuy Inc. He's a researcher, web developer, programmer and ICT expert. Contact Michael via email: luigiajah@gmail.com.
More details in NAIJ.com’s step-by-step guide for guest bloggers.
I predicted the crash of the MMM scheme in Nigeria a long time before the scheme crashed in December. Ponzi Schemes do not last and only manage to succeed in failed states.
Participants of MMM Nigeria celebrating 1st anniversary before the scheme finally crashed
The alleged owner of the MMM Nigeria site and the number one guider, Chuddy Ugorji fled to the Philippines after the crash of the scheme in Nigeria. Many MMM participants probably want to know what lies ahead for them. I will try to explain this from a web developer's view and make it as understandable as possible.
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A look at MMM Nigeria's home page shows some adverts powered by Google called Google Adsense. Adsense pays in two formats - CPC (cost per click) and CPM (cost per mile).
CPC is the amount of money the site will earn for each visitor that clicks on the adverts while CPM is the amount of money the site will earn for every 1000 impressions (impressions are the number of times the site requests an advert from the ad network). A single visitor may generate up to 5-10 impressions on a site.
MMM Nigeria was ranking very high in Nigeria and had millions of visitors daily. Chuddy probably earned millions of naira daily from the ads running on the Ponzi site and also from the other cash he got from the scheme.
When participants were thrown into confusion, the alleged MMM Nigeria site owner was still earning money at the expense of gullible participants who anxiously opened the site daily to see if their supposed mavros were still intact.
What really lies ahead of MMM?
When someone opens a business and it's successful, a lot of people will decide to follow suit and try to see if they can make money like the initial person who started the business. A lot of ponzi schemes are popping up everywhere and it's really disappointing to see that these schemes still have participants despite the warnings by the government. From one angle it shows how people are suffering and are desperate to get money quickly while on another angle it simply shows how gullible Nigerians can be.
Participants of these schemes are unaware of the things that are going on now as MMM has crashed. Many guys have now started opening ponzi sites so as to gain from their own Ponzi Schemes and shut it down later.
A webmaster can design a ponzi scheme and terminate it anytime he wants, he can generate an error page, he can stop people from being able to log in (just like the ponzi scheme- ultimate cycler) and he can decide to drop an upgrade message on the site to leave users locked out.
These sites are owned and operated by human beings and if you can't verify the authenticity of the owner of the scheme, do not participate.
Scammers have seen a way to make Nigerians lose their hard earned money. When participants complain about losing money, they'll tell them that they were asked to use their spare money.
Ponzi schemes have really changed the way most of its participants think, turning them to moving advertising machines. They can hardly spend a few days without thinking about the scheme.
It is quite unfortunate that in the quest to get rich, people have decided to join schemes that are simply run with the slogan “get rich or die trying". It's pitiable that some of these people haven't brought a single soul to church but they have over 200 souls on MMM and other ponzi schemes.
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From the originator of ponzi schemes, Charles Ponzi to MMM founder Sergey Mavrodi and the MMM Nigeria founder Chuddy Ugorji, ponzi schemes have always ended up leaving a lot of participants stranded. There are other ways to make money online without ponzi schemes. Make your life better by avoiding ponzi schemes.
The views expressed in this article are the author’s own and do not necessarily represent the editorial policy of Naij.com.
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