Have you seen this graphic with your friends names on it circling around Instagram? In the last four-days alone, I've seen this thing for both the first time and the millionth time. What's it all about and are people really making money off of it? Well--it's basic economics and yes...a pyramid scheme.

Commonly called the "blessing loom", individuals recruit their friends to buy into their "team" or "circle" -- this cash goes to that friend in the center. Then, those who paid in now need to go have their friends pay as well--with THOSE fees going to the next round of folks, or, the second tier.

See where I'm going with this? Your money an multiply...but what about everyone else?

The person at the top can certainly continue to make a lot of money as long as everyone below them is buying in and getting more people to buy in. If you're the last group of people in and the "circle" falls apart-- you're out of that $100 that was supposed to magically turn into $800 for venmo'ing someone.


The scheme, by definition, is actually a ponzi-scheme and while the authorities have bigger problems on their hands than to investigate your Instagram operation...it's still illegal.

Learn more from this BBC summary, HERE.