What happens if the operator pays interest but stop just before the first investor breaks even?
In that case everyone loses, including people who invested first.
There is no way to know the operator isn't going to run off with the money before paying interest and no way to tell if the people claiming to be paid interest are not the operator or working with the operator.
Just because an operator is open about the scheme being a Ponzi doesn't make the scheme honest or any less risky.
The truth is that some time in the future the scheme will collapse and/or the operator will run off with the investors money.
A "honest" scam artist is still a scam artist.
In that case everyone loses, including people who invested first.
There is no way to know the operator isn't going to run off with the money before paying interest and no way to tell if the people claiming to be paid interest are not the operator or working with the operator.
Just because an operator is open about the scheme being a Ponzi doesn't make the scheme honest or any less risky.
The truth is that some time in the future the scheme will collapse and/or the operator will run off with the investors money.
A "honest" scam artist is still a scam artist.
If the operator is a crook then of course everybody going to lose. But that can happen with pretty much everything if money gets involved.
Everybody knows (or should know) that a ponzi scheme going to collapse sooner or later. However if the participants know that they are "investing" into a (honest) ponzi instead of thinking that they've invested into some sort of trading or whatever business operations (hidden ponzi) then they know what can they expect and plan accordingly. I they still willing to gamble that's their responsibility.
BTW you are right on that this "honesty" is only a limited kind of honesty and should be used as "relative honest in comparison with some others"
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