For those who are not readily familiar; A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds.
I think that is a poor description. A Ponzi scheme is a fake investment scam in which the scammer leads the victims to believe that their investments are earning returns when they are not. The scammer may convince the victims that the investment is real by paying returns from later investments,
but it is not necessary.
There are many examples of a Ponzi scheme paying returns on paper, but not actually ever really paying anyone anything. So-called "cloud-mining" is a good example of a Ponzi scheme that may never pay any return (except on paper). Many Ponzi schemes make the victims wait a long time before they can cash out, and then the scammer takes off with the money before that time has passed..