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 scheme. Participants are often required to recruit others to join, creating a structure that resembles a pyramid. As the scheme grows, it becomes increasingly difficult for new recruits to earn money, leading to significant losses for most participants. These schemes are illegal in many countries because they are unsustainable and exploitative. Once recruitment slows down, the scheme collapses, leaving the majority of participants, especially those at the bottom of the pyramid, with little to no return on their investment.