Bitcoin Forum

I was wondering if there have been cases of bitcointalk members that had a massive positive trust but ended up scamming themselves?

Maybe cases of the account being hacked or sold?

Well, there was TradeFortress .... I can't recall any others right off hand. A lot of in-and-out scammers here though.

Tradefortress is the big one, Pirateat40 and Nefario would have had a lot of positive trust, if the trust system was around back then. Possibly MtGox (MagicalTux) depending on how you view that.

From what I have read, Tradefortress aka $username aka TF was on the original default trust list (level 1) and was probably one of the most trusted people in the bitcoin community.

While it has not been definitively proven it is generally accepted that he stole ~4.4k BTC from his investors and claimed it was a hack

I would think the only reason people trusted pirateat40 was because he initially paid out "dividends" to his early investors in his ponzi. It is my understanding that people were calling him a scammer from the beginning

Of course. That's why you shouldn't just assume people with lots of green feedback are trustworthy. All it means is that they've successfully completed a trade. These feedbacks can also easily be faked so you need to look at who they're left by and what they're generally left for. Someone could build up very high positive trust just for taking out small loans, selling tiny amounts of bitcoin for Paypal or giving away dust in a giveaway or something etc.

This was no the case with TF. He was running a business that held money from many investors totaling millions of dollars. He was paying for advertising throughout the forum (via signature advertising) and had a long track record of paying on time

TradeFortress, I lost there too. The scam was worth almost 6-7k Bitcoins.

He is now here with the name $username. He probably has the biggest negative trust in Bitcointalk.

No , I don't think . These two users have the biggest negative trust here in the forum :


- https://bitcointalk.org/index.php?action=profile;u=44366
- https://bitcointalk.org/index.php?action=profile;u=8198

Pirate was initially trusted because he was well-known in IRC/WoT for a high volume of successful currency exchanges. The ponzi (or whatever it was supposed to be) came significantly later. A fair amount of the initial scammer accusations came from butt-hurt lenders (including yours truly) who were being negatively affected either because lendees were arbing by pretending to take out loans for something reasonable and instead just dumping it in Pirate's scheme (causing us to put all our eggs in one basket without knowledge) or because they offered deposit programs and couldn't come anywhere near the rates Pirate was offering while Pirate was well-trusted. Eventually, the lending and securities sections (there was no LTO subforum back then, IIRC) turned into one big cascade of Pirate Pass-Throughs. Once things started hitting GLBSE and MPEx, the scammer accusations were much more numerous and loud, growing each day until...

Yes, TradeFortress is easily one of the most memorable. While Trust is a good indicator, it's a bad idea to use it as the sole point for which you base trustworthiness off of. Checking post histories to see if it seems like the account has been hacked/sold, or just following your gut instinct is usually a good idea. If one member starts massively branching off into high-risk endeavours like running a HYIP, there's going to be a risk of a scam.

All of the major scams were orchestrated by members with high trust ratings.*  Those ratings eventually fell, just like TF's, but only after the traps were already shut.

*The trust system is about a year old, so I'm talking about the scams which happened with the trust system in place.

A Trusted member is a trusted member & Scammer stays a scamme . he can't be Trusted to turn into a scammer unless he is a Scammer on the first place and he just want to scam high amounts of money .
But Basically and most of them people either sells their accounts on the forum or simply get hacked

So what about TradeFortress, his account wasn't stolen or hacked AFAIK. If the was hacked, he would definitely post here about it. Try not to post things which you don't know but humans do make mistakes. :)

   ~~MZ~~

Goat...mybitcointrade...etc

Nor was Ukyo's, nor cryptocyprus' (Danny Brewster/Neo Bee), Garr255, KSlaughter, etc., etc.  All the major scams were done by trusted members as long as the trust system was in place.

Are you trying to conclude it is due to TRUST SYSTEM? You are probably an old user or you are an alt of ... ?

   ~~MZ~~

I'm not trying to do anything.  What I am doing is pointing out that "All the major scams were done by trusted members as long as the trust system was in place."
Not sure why this needs to be explained.
My being an alt of another user is irrelevant - having alts is a standard practice on this forum.  Because freedoms.  If you feel alt accounts should not be allowed, petition Theymos/mods.

Read again what I said mate , so basically I wouldn't call him "Trusted" member , he just got trust from a lot of people . maybe he was simply pretending that he is trusted to he scam higher amounts of money later .

You can't predict a trusted member's breaking point. Let's not lie, most people would break if they had $1 million trusted to them and could scam anonymously. Some would at $500,000. Some would at $100,000. And some do at $1,000. All you can do is not trust someone with more than you'd be comfortable to lose. Obviously more trust makes the breaking point higher, and there are a few people who will never break, but a lot of people will unfortunately.

I think Douglas had 50 million dollars worth of Bitcoin in just dice cold storage at one point.

You are right though. Most people have a point where they will not be honest when trusted with a certain amount of money. This point is usually lower when their identity would not be associated with the theft however the irreversible nature of Bitcoin makes it so any stolen money cannot be recovered even if the person is caught

BFL, I should've thought of that.
Whats eclipse mining? (the 2nd one)

I  think it is (was) a mining pool for bitcoin affiliated with BFL.

I thought about this a lot when designing the Trust system, but unfortunately there just isn't any way to protect against long-term con men. If someone sets out with the goal of building up trust for several years and then pulling a massive scam, and if he's skilled at hiding his true intentions, I don't think that anything will stop him. You just have to try to minimize the risk and impact of getting scammed by such people.

An important point of increased risk is when trusted people start aggregating BTC from a lot of people. For example, TradeFortess had tons of successful trades, some very large, but through inputs.io he could scam hundreds of people at once. And each inputs.io user was probably thinking, "TF has handled thousands of bitcoins at once without problems -- there's no way he'd steal my measly 0.5 BTC." But since he can steal from many people at once, the scam becomes worthwhile. (I'm assuming here that TF stole user deposits, which I am still not completely sure about.)

Yes he stole user deposits. I think you are quite right. The WWW is the perfect place for crime, there is no skill required to hide your identity (TOR) so we have to use more multi sig escrow!

I agree multi sig escrow would solve a lot of the issues. Getting everyone to use it seems to be the only issue at this time.

If a scheme has a trusted owner, it never means it's safe to invest in it. It's better to have a system in place to prevent abuse, hack or theft.

I don't think this is so much a flaw in the trust system that it is a flaw in how people tend to trust others.

I really appreciate you sharing your thinking when you designed the trust system.  I worry more about someone buying or hacking a trusted member's account rather than being part of a really long con.  It also seems like the key "hurdle" is making it onto the default trust list.

As to TF I got some of my first bitcents by participating in his coinchat and am still shaking my head over the "hack."

I am still impressed dooglus didn't run with the huge Just Dice bankroll or scam his investors in a more subtle way.  It's why he's the most trusted anonymous person in my book.

Thanks again for commenting.

Even with multisig escrow, you will still need to trust the escrow to some degree.
You could still lose your bitcoin if the escrow is the same person as the counterparty, or if the escrow and counterpart collude to share the bitcoin.

To follow DiamondCardz's post:
The breaking point is incalculable by anyone but themselves. I can tell you that mine is $20 million, but you don't have to believe me. So don't. :)

To be honest, if we could magically determine our breaking points, I bet that'd make a nice log graph. How many of us would be on the top of the chart compared to the bottom? 1 to 1? 1 to 2? 1 to 10? ....1 to 1,000?

If there's an afterlife, I better see that damn chart. ;D

I would say that a person's breaking point will change over time as they are trusted with more (or less) funds. For example if someone is entrusted with $10,000 then if they were trusted with $50,000 they would run away, however after being trusted with $10,000 for several months, they might not even flinch at the idea of being trusted with $50,000 and when someone does trust them with as much for several months their breaking point would likely increase

That's a good point. Because then it makes more sense from a financial perspective to not steal that $10,000.

If a person had $1, then it would be very difficult for her to earn $10,000 with that money. However, if she is entrusted with $10,000 through the course of doing business (for example, receiving a web design contract), then obviously she would want to make good on her end of the deal so that she can earn more business in the future.

Right. As people obviously do not do things for free, handling others' money will earn them some kind of income and the more trustworthy they can prove to be the more they can command for handling someone elses money.

When you know someone very well, you can make a more reliable assessment of its trustworthiness. If its identity is public or known to many insiders, he is less likely to disappear overnight.

The trust system is flawed, the default list is a joke.
Really You could do a years worth of thousand dollar deals, until someone decides 50k is a good deal, than you scam off.

No way to really know a person.