In the past week, Loom has been everywhere on social media. A lot of people have been talking about it and we wonder if people really understand what the whole business is about.
Many see it as a new ponzi scam that has surfaced after the NAM1-Menzgold saga. But some also see it as an opportunity to make some good money without stress.
Well, an expert in financial matters, E.Q.A Mensah (eqamensah) on Twitter has done a thread explaining what the whole Loom thing is about.
In the thread, he talks about how Loom operates, and all that the “lucrative investment scheme” entails.
Read the whole thread below:
“1. LOOM money has no central account or regulating institution. Loom money is not regulated by any institution and hence, it’s very difficult to trace owners of the said scheme in case of any challenge.
2. Who did the first participants make payments to?:
Have you ever asked yourself this question? These people made payment to the owners of the schemes. So the idea is, these people (initial participants) will make their monies from those who join.
3. Sustainability of the Scheme:
The sustainability of this scheme is dependent on the availability and willingness of people to join. The moment it reaches its peak, that’s the end of the scheme.
4. Robbing Peter to pay Paul System:
In this pyramid model of Ponzi, it’s just a system of transferring monies from one person to another. Funds aren’t used for any investment engagement to earn interest or profit.
5. Who loses?:
The last person to join is very vulnerable. His fate is determined by the next person to join. In a case where no one is willing to join again, the last persons who joined loses.
Ponzi Schemes or pyramids have their own advantages. One can easily take advantage of the system but remember, the brains behind the system can never lose. And don’t be lured by the huge interest promised (ie about 800 percent in less than a month).
You can easily lose your money invested!”
Well, we hope E.Q.A Mensah’s explanation has given you a better understanding of what the whole Loom thing entails.
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