Pirate v2.0: Unravelling the Bitshares Ponzi

[cunicula]

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

Thanks to digital industry for highlighting Larimer's damning quote.

https://anonfiles.com/file/cb6ea50037eebae4abd05c205350a1f4

This pdf file just uses a logical argument to demonstrate that bitshares is a ponzi.

It is textbook macroeconomics.

Help spread the word to protect the community.


Don't believe them when they claim naivete.  It doesn't add up.

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[grue]

>[...]exchange units of USD via a bitcon client[...]
You lost my attention

[cunicula]

>[...]exchange units of USD via a bitcon client[...]
You lost my attention

Very well, then you are not at risk as a Ponzi victim.

[grue]

>[...]exchange units of USD via a bitcon client[...]
You lost my attention

Very well, then you are not at risk as a Ponzi victim.

protip: Present your findings as an essay/paper, not a powerpoint pdf. Your slides are very confusing and unconvincing.

[cunicula]

Last time I did that I got a request for slides...

You don't have to trust me. Just read the wikipedia article linked in the slides and come to your own conclusion.

[digitalindustry]

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

from  http://www.coindesk.com/bitshares-p2p-trading-platform-to-offer-dividends-on-bitcoins/


Lol - i suppose they have to try ... : |  pfft.


but , i'll be aptly interested to see who will take this up - , i suspect there are always some marks , but it will be interesting to see .

in the same sense , many times we have invested in paper on other assets many times before, this is an investment vehicle , one would have to consider this high risk , but play the game if you can i guess.

[cunicula]

Seeing that there is a corporation and VC funding etc, the only plausible explanation is a long con.

[azwccc]

This webpage is not available.

can't download

[grue]

Last time I did that I got a request for slides...

Then that guy is probably still in primary school and reads picture books. Powerpoint slides are to be used in conjunction with an ACTUAL PRESENTATION. You're not going to convince anyone with a poorly structured powerpoint.

Guess why this guy: http://ripplescam.org/ is more convincing than you. Hint: it's because he has a properly structured article that lays out his arguments and then presents evidence for each of them. On the other hand, you present random pieces of economic theory, then come to the conclusion that bitshares is a ponzi.

You don't have to trust me. Just read the wikipedia article linked in the slides and come to your own conclusion.

Oh so you hope to convince people by: "DON'T BELIEVE ME? HERE ARE A BUNCH OF ARTICLES VAGUELY RELATED TO MY CLAIM." Good luck with that.

[cunicula]

I put it here too.
https://docs.google.com/file/d/0BwuAen5XHUMEOTdVeW9nX3EwdXM/edit?usp=sharing

[cunicula]

Last time I did that I got a request for slides...

Then that guy is probably still in primary school and reads picture books. Powerpoint slides are to be used in conjunction with an ACTUAL PRESENTATION. You're not going to convince anyone with a poorly structured powerpoint.

Guess why this guy: http://ripplescam.org/ is more convincing than you. Hint: it's because he has a properly structured article that lays out his arguments and then presents evidence for each of them. On the other hand, you present random pieces of economic theory, then come to the conclusion that bitshares is a ponzi.

You don't have to trust me. Just read the wikipedia article linked in the slides and come to your own conclusion.

Oh so you hope to convince people by: "DON'T BELIEVE ME? HERE ARE A BUNCH OF ARTICLES VAGUELY RELATED TO MY CLAIM." Good luck with that.

There really isn't any logical argument in the linked page. I prefer to use logical arguments.

If you don't want to accept consistency with basic economic theory as a criteria for correctness, then there is nothing I can do to convince you.  

If you have never taken economics before or lack aptitude in the area, then I don't really have the time to offer a course.

[digitalindustry]

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

^^

simply rather than having to write  a white paper - just tell me who takes the risk and where does the "magic" happen in the above scenario.

When trying to find a scam I suggest that if its too difficult to explain without trying to revert to eco-speak , you are scamming.

so simply , who takes the risk in the above scenario to provide the "interest" - where is the "new" BTC issued from, or transferred from, (where is the work?) how does an "investor" asses risk?

if this can't be explained , unfortunately, well, you know....

[cunicula]

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

^^

simply rather than having to write  a white paper - just tell me who takes the risk and where does the "magic" happen in the above scenario.

When trying to find a scam I suggest that if its too difficult to explain without trying to revert to eco-speak , you are scamming.

so simply , who takes the risk in the above scenario to provide the "interest" - where is the "new" BTC issued from, or transferred from.

if this can't be explained , unfortunately, well, you know....

Often you are completely correct, but that is because people are adopting eco-speak because they don't expect you to understand it.

If you actually understand eco-speak, it makes things crystal clear.
This is simple stuff. e.g. I test undergrads on this all the time and they do just fine.

If you see well-educated people doing this it can only be intentional deception.  

The problem is if something is actually complicated then I will be unable to explain it to you without you immediately thinking it is a scam.
Bitcoin is case in point.

[cunicula]

A simpler way of putting it might be through "covered interest rate parity"

Say that a bitUSD is really expected to be worth a bitUSD next year.

If so, then would you agree to buy 1 bitUSD from me for 1 USD next year? (i.e. we are both obligated to make the exchange)

Of course you would, it is just exchanging one USD for another.

Okay, but bitUSD earn interest, so if I can buy it for 1 USD, earn interest, and sell it back to you for 1 USD, it is a great opportunity.

It generates a risk-free return for me. With no risk at all for you either. Hey maybe I can even share the wealth since I can earn infinite money this way.

This is impossible.

[digitalindustry]

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

^^

simply rather than having to write  a white paper - just tell me who takes the risk and where does the "magic" happen in the above scenario.

When trying to find a scam I suggest that if its too difficult to explain without trying to revert to eco-speak , you are scamming.

so simply , who takes the risk in the above scenario to provide the "interest" - where is the "new" BTC issued from, or transferred from.

if this can't be explained , unfortunately, well, you know....

Often you are completely correct, but that is because people are adopting eco-speak because they don't expect you to understand it.

If you actually understand eco-speak, it makes things crystal clear.
This is simple stuff. e.g. I test undergrads on this all the time and they do just fine.

If you see well-educated people doing this it can only be intentional deception.  

The problem is if something is actually complicated then I will be unable to explain it to you without you immediately thinking it is a scam.
Bitcoin is case in point.

ha ha i'm not sure if you are talking to me in the first person here?

As soon as I saw its conception , I never doubted the principal upon which Bitcoin is built .

I can choose to speak eco-speak just find it redundant and obtuse , a disgrace to the field that use to be called "economics" .

I know of others that have had a hard time understanding  PoW Blockchain etc principals , to the point of faith > security > confidence.

But some of these questions are justified certainly with regard to BTC , the principal however I believe is pretty rock solid, its proven, double blind and in real life.

[Hazard]

Impossible it may be, idiots will still fall for it. This forum has a profound lack of economic sense.

[markm]

It could work as long as they could keep printing more bitcoins. But if the interest due increases faster than new bitcoins are printed/minted, it, as described by Cunicula, is obviously doomed.

I suppose in principle the possibility remains that Cunicula is over-simplifying a complicated system, but if their marketing also did so it would seem like the marketers were trying to market it as a ponzi.

EDIT: Oh wait, possibly as long as bitcoin keeps going up in value relative to USD that also could prolong the scheme?

-MarkM-

[digitalindustry]

A simpler way of putting it might be through "covered interest rate parity"

Say that a bitUSD is really expected to be worth a bitUSD next year.

If so, then would you agree to buy 1 bitUSD from me for 1 USD next year? (i.e. we are both obligated to make the exchange)

Of course you would, it is just exchanging one USD for another.

Okay, but bitUSD earn interest, so if I can buy it for 1 USD, earn interest, and sell it back to you for 1 USD, it is a great opportunity.

It generates a risk-free return for me. With no risk at all for you either. Hey maybe I can even share the wealth since I can earn infinite money this way.

This is impossible.

yes but even a child could understand "earn interest"

so the very simple question of course is , where does thou interest derive ?



interest is the principal of payment for risk , Usury is the principal of fraud .

interest is acceptable on a loan at risk to the counter-party as if this did not exist , no one would have an incentive to loan.

so now that we know that interest in this simple sense is an "offset for risk",  where is the risk?

and where is the "work" - if the principal is investment there is usually "work" related to growth, i.e productive growth.


even in so called no productive loans - there is a work derivative ;

for example Jon borrows 100k for a car loan, he buys the car and promises to pay the interest (lets pretend we don't live in a fraudulent usurious society so i'll leave out all the fake money creation)

he gets the loan and pays back the principal and interests - Jons work to earn the transfer of new currency to pay the principal is allowing for the existence of the loan and by extension the car, back at the car factory there is work being done , to justify its existence . 


@MarkM -

The quote I provided is directly from the Coindesk article. the claim has been made.

[markm]

Maybe the "work" is the increase in bitcoin value compared to USD value?

So that, like pirateat40, as long as bitcoin keeps going up (or was it down in pirateat40's case?) the scheme will get to continue a little longer?

-MarkM-

[cunicula]

It could work as long as they could keep printing more bitcoins. But if the interest due increases faster than new bitcoins are printed/minted, it, as described by Cunicula, is obviously doomed.

I suppose in principle the possibility remains that Cunicula is over-simplifying a complicated system, but if their marketing also did so it would seem like the marketers were trying to market it as a ponzi.

-MarkM-

over-simplifying it is the whole point.

If someone says something about physics theory, and it turns out that their conclusion implies a violation of the law of thermodynamics...

If you just follow their argument it is very hard to understand. If you check the conclusions of their argument against standard theory and they are inconsistent with one another. Well, this is very revealing. Either the standard theory is wrong or they are wrong.

Most people would trust economics texts over new economic theory developed at bitshares.
However, with the bitcoin community who knows.

If you won't accept the standard theory, however. It is not going to be possible to convince you. (much like if you won't accept the law of thermodynamics then it is going to be hard to argue about the feasibility of your new physics invention)