5 Things about Ponzi Schemes - Ponzi schemes are not pyramid schemes
Ponzi schemes are often confused with pyramid schemes or multi-level marketing (MLM) strategies, but there are clear distinctions between the two. In a pyramid scheme, investors are compensated with a percentage of the investment money paid by those they recruit. A Ponzi scheme is best summed up in the phrase "rob Peter to pay Paul," meaning: use one investor's money to pay the returns of another investor. The money in a Ponzi scheme flows through a central agent who moves it around creating the illusion of earnings. Ponzi schemes are successful because investors typically continue to reinvest their earnings into the scam. This constant reinvestment of securities causes a financial bubble to grow. Inevitably, the bubble reaches critical mass and implodes.
2- Ponzi was a man
The word "Ponzi" isn't some technical financial jargon, it's somebody's name. Charles Ponzi was an Italian immigrant living in Boston during the First World War. Ponzi, who had previously served time in a Canadian prison for forgery, stumbled upon a loophole in the mail system regarding International Reply Coupons (IRC). He found that he could buy IRCs abroad and exchange them for U.S. postage at a higher value. He then made a tidy profit by reselling the stamps. After his initial success, Ponzi founded the Securities Exchange Company. Word spread and he was eventually inundated with investors. He quickly gave up on the mailing scheme and started simply shuffling money among his clients. The scheme collapsed in 1921, and Ponzi spent three years in federal prison, and another nine in state prison. The exact amount that Charles Ponzi bilked his investors for remains unknown; however, at the height of the scheme he reportedly took in $1 million in three hours. In the end, he only ever bought $30 worth of IRCs.

Unknown internet 5: Is there only one internet?
03 May 2009 by Ben Crystall
newscientist.com

Read more: Eight things you didn't know about the internet

Probably - for now. The internet is a disparate mix of interconnected computers, many of them on large networks run by universities, businesses and so on. What unites this network of networks are the communication languages known as the Transmission Control Protocol and the Internet Protocol, collectively TCP/IP.

There are also a few large networks that use different protocols and which remain largely isolated from the internet, including something called FidoNet, which links bulletin board systems via the global telephone network, as well as a handful of military networks. The main internet is the only one of any significant size, as far as we know.

Yet while a common computer language has proved a key to the internet's phenomenal success, another form of language - this time human - could eventually trigger its fragmentation into several separate regional internets. In 2007, under pressure from China and Russia, ICANN finally allowed the use of non-Latin characters in online addresses. The move will help billions of Chinese and Russian speakers use the internet, making communications easier and improving online trade within these countries. However, it could also prove to be the beginning of the end for the internet as we know it.

One possibility is that we could see the appearance of domain names that are not recognised by the rest of the network. If servers or routers aren't set up to recognise the characters in these addresses, the domain names will not be readily accessible from all parts of the world.

Worse will come if, say, the Chinese government decides to set up its own root directory of Chinese domain names, held on its own computers and independent of the existing US-based directory. This could give the Chinese authorities control over which sites its citizens access, potentially giving it the power to largely isolate them from the rest of the net. "The language changes will accelerate national fragmentation of the internet," warns Tim Wu, professor of technology and law at Columbia University in New York. He predicts this will lead us down a road towards a divided internet: one part controlled by the US, one by China, and another by Russia.
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