from the site's I have seen, this seems to be how the scheme works. 1. People buy bids at say $.20 per bid. (So it costs you to pledge money to buy an item) 2. Item starts at $.01 and each bid raises price by $.01 ( or some other small amount) and increases the time left on the auction by 10-15 sec. 3. People bid, thinking that $.20 is a small price to pay to win an expensive item such as an ipad for a small amount. Auctions typically have about 1min max time, so it looks like it's JUST about to go out, and people bid. 4. There is a MASSIVE Hype train because it is a subtle scheme, so people keep bidding. 100 bids = $20 for the site running the auction, and the item has increased in price $1. By the time the item has reached $50, the site has already generated $1000 in cash, and they haven't even sold the item yet. Huge profit margins for the sites running these, and I do believe they are legit.
Also... I have been looking into it... at the end, someone inevitable ends up with an expensive item for little cost. (if you havent bid 100 times). There is probably a way to exploit it and get expensive stuff cheap... but idk.