ELI5 Ponzi Schemes - how do they work?

What’s the difference between a pyramid scheme and a Ponzi scheme? Why is it called a Ponzi scheme? What are some of the most famous Ponzi schemes in history? ... we explain like I'm five Thank you to the r/explainlikeimfive community and in particular the following users whose questions and comments formed the basis of this discussion: brentrs89, megatron_mclargehuge, eyeheartboobs, fifth_down, rodneymunch11, lazydracula and kevlarbuns To the ELI5 community that has supported us so far, thanks for all your feedback and comments. Join us on Twitter: https://www.twitter.com/eli5ThePodcast/ or send us an e-mail: [email protected]