Pyramid selling, also known as "pyramid-style sales", operates according to the following basic model: The organizers or operators of the pyramid selling scheme recruit new members, requiring them to develop additional new members to join, forming a so-called "up-line/down-line" relationship. The rewards for the up-line are calculated and paid based on the number of down-line members developed, the fees paid by the down-line members, and the sales performance of the down-line members. Pyramid selling promoters often use the "multiplication effect" in economics to promote their schemes. The so-called "multiplication" refers to 1 becoming 2, 2 becoming 4, 4 becoming 8... with the number of units increasing exponentially. They first tell the story of the Indian king and the magician: The king wanted to reward the magician who invented chess, so the magician asked the king to put a grain of rice in the first square of the chessboard, two grains in the second square, four grains in the third square, and so on, with the number of grains in each square doubling the number in the previous square until all 64 squares were filled. The king thought the magician's request was not high and readily agreed. But the king soon found that the number of grains in each square increased at an unbelievable rate, and even using all the country's grain would not be enough to satisfy the magician's demand.
Pyramid selling promoters use this story to deceive others into joining their schemes: As long as you develop two down-line members within a month, and your down-line members also spend a month each developing two second-generation down-line members, and the second-generation down-line members develop two third-generation down-line members, and so on, gradually forming a pyramidal structure. Then, after one year (12 months), you will have at least 2×(2^12-1) = 8,190 down-line members, and after two years, 335,54330 down-line members, and after three years... Your number of down-line members will increase rapidly like the number of grains in the chessboard, and the wealth contributed by your down-line members will also increase rapidly, and you will soon become a millionaire or a billionaire. This seems like a tempting wealth accumulation plan! Isn't it easy to develop two down-line members within a month? After that, you can just sit back and wait to get rich. But is this "multiplication" myth credible?
First, you can't just sign a contract to join a pyramid selling scheme. You need to pay a substantial membership fee in advance and purchase a certain amount of products from the operators of the pyramid selling scheme every month. You have to invest a large sum of money upfront, and later you face the challenge of selling products that are difficult to sell (pyramid selling products are often not cost-effective).
Second, if you don't think this is a problem, pyramid selling is not just about selling products, but about obtaining profits from down-line members. It's easy to find two down-line members, but according to the "multiplication" effect, a pyramid selling member can quickly have a large number of down-line members and receive a surge in income. In fact, the proportion of the fees returned to the up-line by each down-line member is very low. If you want to make a profit, you need a considerable number of down-line members. If the number of down-line members can really "multiply", then the difficulty of developing down-line members will also "multiply". And when a person joins a pyramid selling scheme, he is likely to be a down-line member of several generations. Therefore, developing two down-line members may seem easy, but it's actually very difficult.
Third, even if you are lucky enough to develop many down-line members and make a profit, the situation won't be much better. Because your down-line members also need to make a profit to continue doing it, and the difficulty of developing their own down-line members is also "multiplied". At the bottom of the pyramid selling network, people are bound to lose money. If you need to develop four down-line members to make a profit, it can be calculated that more than 90% of your down-line members will lose money (actually 93%). If it's three down-line members, the proportion is 87.5%; if it's two down-line members, the proportion is 75%; if it's one down-line member, the proportion is 50%. These unprofitable down-line members either get trapped in the pyramid selling network and can't get out, or choose to quit. Therefore, your down-line members will either stay in the pyramid selling network and can't get out, or choose to quit.The number of downlines is not stable and may decrease sharply at any time. In the end, you might even lose money.
In fact, to truly achieve a "doubling" of the number of downlines, your downlines must form a complete "binary tree". However, in reality, since many downlines may not be able to find any of their own downlines, the downlines you form will be an incomplete "binary tree", which cannot achieve doubling.
If the "doubling" myth promoted by pyramid schemes were reliable, then after 2 years, the number of your downlines would be over 33 million, which is equivalent to the population of a Chinese province. After 3 years, the number of your downlines would be over 130 billion, while the current world population is only over 7 billion. Is this possible? The company that pioneered the pyramid scheme model internationally has been established for over 50 years. If the "doubling" myth could really be realized, then the world would have long since been filled with pyramid scheme members of this company.