Pyramid Schemes

Dear Sir,

Aren't these Pyramid Schemes Illegal?

Yours Sincerely,

Benjamin Grosman

An entity claiming to be Benjamin Grosman wrote:
: 
: Dear Sir,
: 
: Aren't these Pyramid Schemes Illegal?
: 
: Yours Sincerely,
: 
: Benjamin Grosman
: 

Yep, 18 U.S.C. sec. 1343 if I remember correctly ... one of the only
laws I truly appreciate.  I've already sent a message to 
postmaster@mindspring.com pointing out the fact that a felony has
been committed.

-- 
[]  Mark Rogaski                    
[]  wendigo@pobox.com               
[]  http://www.pobox.com/~wendigo/  
[]  >> finger for PGP pubkey <<

At 4:23 AM -0500 11/10/96, Mark Rogaski wrote:
>An entity claiming to be Benjamin Grosman wrote:

>: Aren't these Pyramid Schemes Illegal?

>
>Yep, 18 U.S.C. sec. 1343 if I remember correctly ... one of the only
>laws I truly appreciate.  I've already sent a message to
>postmaster@mindspring.com pointing out the fact that a felony has
>been committed.

I deleted the original spam, but from my brief glance at it, it may have
been more of a multi-level marketing (MLM) scheme than a simple
pyramid...something about selling mailing list services. And of course MLMs
are mostly protected, else Amway, Herbalife, Avon, and all the other such
MLMs would not survive.

But I have a more radical view: pyramid schemes should not be illegal.

They are classic nonviolent behaviors, and are not even examples of fraud.
(Because it is _true_ that if one succeeeds in getting enough people to
follow one on the chain, profits come in. It is also true that a large
fraction of participants will see only losses. So?)

Thus, people against pyramids should educate people if they want to, should
try to get them not to participate. But I can't support hiring men with
guns to force people not to participate.

(And there are ways that cryptography allows "crypto-pyramids," though I
doubt many crypto-savvy folks would participate.)

BTW, predictions of great returns in pyramids if instructions are followed
closely are not different from predicitions of earthly and heavenly rewards
if religious commands are followed. Outlaw one, outlaw the other.

--Tim May

"The government announcement is disastrous," said Jim Bidzos,.."We warned IBM
that the National Security Agency would try to twist their technology."
[NYT, 1996-10-02]
We got computers, we're tapping phone lines, I know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^1,257,787-1 | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

"Timothy C. May" <tcmay@got.net> writes:
> I deleted the original spam, but from my brief glance at it, it may have
> been more of a multi-level marketing (MLM) scheme than a simple
> pyramid...something about selling mailing list services. And of course MLMs
> are mostly protected, else Amway, Herbalife, Avon, and all the other such
> MLMs would not survive.
>
> But I have a more radical view: pyramid schemes should not be illegal.

Surprisingly, I agree with Timmy on this one. MLM's/pyramid schemes fit
so well into the general American stupidity and the belief in getting
something for nothing.

> (And there are ways that cryptography allows "crypto-pyramids," though I
> doubt many crypto-savvy folks would participate.)

I think the following would be a worthwhile cypherpunks project: design the
anonymous infrastructure to allow those who wants to participate in MMF-like
pyramid schemes on the Internet to do so without bothering anyone.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps

On Sun, 10 Nov 1996, Dr.Dimitri Vulis KOTM wrote:
> 
> I think the following would be a worthwhile cypherpunks project: design the
> anonymous infrastructure to allow those who wants to participate in MMF-like
> pyramid schemes on the Internet to do so without bothering anyone.

It seems to me that any such scheme is doomed to failure, unless I
misunderstand what people are talking about here. While I believe that
there really is a `sucker born every minute', and it is that which makes
pyramid schemes work, I don't believe that too many people would jump on
board unless they see real, verifiable names linked with the schemes. 
Isn't it just common sense to say that if people are hiding their identity
while offering to `make money fast' then there is something seriously
shady going on? Aren't people *less* likely to join in under such
circumstances?  Sure, it allows such schemes to work in theory but in
practice, how do you get people to join in? Who would/how could you
*trust* such a scheme? 

Perhaps I give people too much credit? 

cheers, kinch

Dave Kinchlea <security@kinch.ark.com> writes:

> On Sun, 10 Nov 1996, Dr.Dimitri Vulis KOTM wrote:
> >
> > I think the following would be a worthwhile cypherpunks project: design the
> > anonymous infrastructure to allow those who wants to participate in MMF-like
> > pyramid schemes on the Internet to do so without bothering anyone.
>
> It seems to me that any such scheme is doomed to failure, unless I
> misunderstand what people are talking about here. While I believe that
> there really is a `sucker born every minute', and it is that which makes
> pyramid schemes work, I don't believe that too many people would jump on
> board unless they see real, verifiable names linked with the schemes.

Methinks, you underestimate the stupidity of the average American. :-)

> Isn't it just common sense to say that if people are hiding their identity
> while offering to `make money fast' then there is something seriously
> shady going on? Aren't people *less* likely to join in under such
> circumstances?  Sure, it allows such schemes to work in theory but in
> practice, how do you get people to join in? Who would/how could you
> *trust* such a scheme?

Well - I definitely would not trust such a scheme and wouldn't take part in it.
I suppose if a scheme like this were actually implemented, some people would
be dumb enough to take is seriously and lose some (digital) money; therefore
someone would gain whatever money they've lost, as it happens in all zero-sum
games. However I've been talking about designing a scheme, not implementing it.
If there are students on this mailing list in need of an interesting crypto
project, this is one good idea, IMO.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps