Popular Science in the Currency Circle: An article introducing what MLM coins mean

Summary of the first paragraph of the article MLM coins, also known as "air coins" or "scam coins", are virtual currencies that use pyramid schemes to illegally make money. This kind of currency often has no actual value and only exists in the digital wallet of the publisher. Revenues are obtained by pulling people offline. The way MLM coins work is usually by giving high returns to early participants to attract more people to join, forming a pyramid structure. Once the number of offline operations is insufficient to support returns, the entire system will collapse and investors will face the risk of losing their money.

What are MLM coins?

MLM currency is a virtual currency or cryptocurrency promoted in a pyramid scheme. Its characteristics are:

1. Promise of high returns

Promotional materials for MLM coins usually promise investors high returns, and even claim to achieve financial freedom in the short term.

2. Head fee mechanism

MLM coins develop members through the head fee mechanism, that is, when new members join, they need to pay a certain fee to the recommender.

3. Layer-by-layer distribution

MLM coins adopt a tiered distribution method, and investors receive different levels of rewards based on the number of referrals and the amount of investment.

4. Lack of actual value

MLM coins usually have no practical application value or underlying asset support, and their value completely depends on the addition of new members and capital injection.

5. Illegality

In most countries, pyramid schemes are illegal, and MLM coins are essentially pyramid schemes and therefore illegal activities.

Hazards of MLM coins

MLM coins have many harms to individuals and society:

• causing economic losses: due to the lack of practicality of MLM coins value, investors are susceptible to financial losses.
• Disrupting the financial order: The illegal fund-raising behavior of MLM coins disrupts the normal financial order.
• Damage social stability: MLM coin scams may cause social dissatisfaction and unrest.
• Hazards to personal physical and mental health: The deceptive propaganda and high-pressure pulling methods of MLM coins may cause psychological and spiritual harm to individuals.

How to identify MLM coins

In order to avoid falling into MLM coin scams, investors need to know how to identify them:

• Identification Promise of high returns: The rate of return on reasonable investment will not be too high, and the promise of high returns is often a characteristic of MLM coins.
• Stay away from the capitation fee mechanism: Any investment with capitation fee as the main form of income will have pyramid schemes risks.
• Treat hierarchical distribution with caution: Normal investment will not adopt hierarchical distribution.
• Verify official information: Before investing, investors should verify whether the virtual currency is registered or recognized by an authoritative agency.

The above is the detailed content of Popular Science in the Currency Circle: An article introducing what MLM coins mean. For more information, please follow other related articles on the PHP Chinese website!