Is this considered pyramid scheme?

This seems like a very good idea, but I am not sure if it would be considered a pyramid scheme which is illegal.

User signs up and pays a dollar. Referer and referer of that referer get 10¢ each. I get the remaining amount. Up to 9 levels.

Also users can upgrade and earn double up to 90¢.

So is it legal?

 

Congratulations, you've invented the pyramid scheme.

 

If the only source of money is new members joining in, and you don't even pretend to sell a product or service, I believe you have what's called the "Ponzi Scheme" flavor of pyramid scheme. Read more:

http://en.wikipedia.org/wiki/Multilevel_pyramid_scheme
http://www.ftc.gov/speeches/other/dvimf16.shtm
http://www.mycert.org.my/en/resources/fraud/main/main/detail/515/index.html

 

As the others have said, it is a pyramid scheme, a ponzi scheme, a scam.

 

Bernie Maddoff would be pissed that you are stealing his business model.

 

I'm still going to do it. It sounds to me like ponzi is a scam, and I'm not making any false claims. If I get any notices from the gov't, I will shut it down.