A pyramid scheme is a type of investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from profit earned by the operation of a legitimate business. This structure creates a pyramid shape, as each participant recruits others to join, with only a few at the top making significant profits. These schemes are unsustainable and often collapse when it becomes difficult to recruit new members. As a result, most participants lose their money, while only a small number at the top benefit. Pyramid schemes are illegal in many countries due to their fraudulent nature.