system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How does a Ponzi scheme work?
gpt
You start off with 10 people in your kindergarten class. You see they all have candy. Now, you have some of your own, but nowhere near as much as they do. But you, being the clever 5 year old you are, think of a plan. You promise each of them that if they give you, say, two pieces of candy today, in a month you will give them all 3 pieces of candy. Now that you have 20 pieces of candy, you go to the other classes about two or three weeks later and offer them a similar thing, but you ask for more and promise a greater return. As a result you get more candy, with which you not only pay off the old investors, but with which you stuff your pockets with because the extra investment outweighs what you owe. You now have a reputation as someone who makes good on their promises, so you take it to other classes, and even other grades. You perpetuate the cycle, putting more and more money in your pockets without anyone finding out.

That is, until you stop getting new investors, or if you are otherwise unable to make good on what you promised.