Bitcoin Forum

The Business:
Over the last few months I have been selling BTC to a group of local people.  Now this is a don't ask don't tell group of people so I can't tell you exactly where and to whom the coins ultimately end up with but so far its been pretty painless.   During this last week I maxed out my available coins both personally and "leased" from other members and they needed a lot more.  Up until now, I have dealt with my core group of friends and been able to handle the requests, but they seem to be getting larger and more frequent.  So now I'm looking into other methods for keeping a consistent storage or on-demand availability of coins.  I have two plans available for those sitting on coins.

On-Demand
When an order comes in that is over what I have available I'll send out a request to users in this plan requesting the total needed.  The first to respond gets the deal and the transfer is made.  These coins will be tide up for 1 business day to give me enough time to settle the transaction and acquire the coins to return. This plan pays a flat 3.5%.

Storage
This plan works as an ongoing commitment.  You would send coins anytime to the address provided and you would earn interest on a daily basis.  You can withdraw your balance at anytime, but I do request that you give me a couple hours to insure I have coverage for the next order.  Interest payments are paid out ever 3 days until either you withdraw the funds or my local dealings dry up and I can no longer be profitable. This plan pays 1% per day.

Now I would hope to have enough people on the storage plan that I wouldn't have a need for the on-demand but I'll see how it goes.  I ultimately want the ability to provide coins at anytime and any amount for these guys and we can all share in the profits.

I've created my own custom management software that I've built to monitor deposits, withdraws and interest payments.  As this gets bigger I'll build a front end for it so users can view and manage there account and maybe putting that domain btclending.com to good use.   

For more information send me a PM or just ask below.  You can check out my OTC ratings in my signature.

Edit: I forgot to mention that dealing with anything less than 50BTC is more work than its worth so I've made that the minimum on both plans.

Thanks

so much... stuff.. being said.

If you believe what pirate himself posted back in November:

https://bitcointalk.org/index.php?topic=103623.msg1137230#msg1137230

then here was his business:


That's consistent with conversations I've had with him, sidebar, about potential $USD investors.

My 'theory' at the moment is poor planning combined with what was essentially a 'run' on his bank. http://en.wikipedia.org/wiki/Bank_run

Together, down goes the house.

Not that hard to figure out, and given the same circumstances, could happen to your local "community" bank.

That explains exactly nothing about how he made positive returns, much less in the amounts he was supposedly getting, for victims investors.  Could you summarize in your own words how Pirate made 7% returns (in BTC) weekly by taking your Bitcoin, selling it for cash, and then...purchasing Bitcoin back?  He would have to have been doing MASSIVE volume, and there is no way his local "friends" could have supported this sort of scheme based only on their desire for purchasing Bitcoin.  They could have gotten their Bitcoin anonymously from BitInstant or even through an exchange (as long as they aren't withdrawing, you can purchase Bitcoin anonymously easily online).  This makes zero sense as a business unless there is something I'm missing.  Maybe you could explain it.

This is my theory: https://bitcointalk.org/index.php?topic=104261.msg1143773#msg1143773

he was running a ponzi from day one.

GPUMax always have has been used to get clean coins.

I still don't believe this. He simply got in over his head, after it grew exponentially with PPT offerings.

I still don't believe this. He simply got in over his head, after it grew exponentially with PPT offerings.

I have to agree with bitlane. bitcoinmax was his downfall, the GLBSE PPT's not so much, as they kept his BTC supply fairly stable/predictable.

he was running a ponzi from day one.

GPUMax always have has been used to get clean coins.

LOL you're kidding right?

He was doing;

Receive coins from idiot -> party hard
receive coins from another idiot -> party harder
receive more coins from more idiots -> buy sports car
receive some more -> get some hot escort girl
receive some more, tell people they got trolled -> party hard and go to Hawaii

>ask for some coins
>recieve some coins
>realize people trust you with money
>ask for more money
>get more money
>realize the potential for extreme wealth
>people trust you
>ask for way more money promising sweet returns
>get way more money
>realize you can get enough money to retire
>keeping asking for money
>get enough money to retire
>run

How much do you have invested ?

The Business:
Over the last few months I have been selling BTC to a group of local people.  Now this is a don't ask don't tell group of people so I can't tell you exactly where and to whom the coins ultimately end up with but so far its been pretty painless.   During this last week I maxed out my available coins both personally and "leased" from other members and they needed a lot more.  Up until now, I have dealt with my core group of friends and been able to handle the requests, but they seem to be getting larger and more frequent.  So now I'm looking into other methods for keeping a consistent storage or on-demand availability of coins.  I have two plans available for those sitting on coins.

On-Demand
When an order comes in that is over what I have available I'll send out a request to users in this plan requesting the total needed.  The first to respond gets the deal and the transfer is made.  These coins will be tide up for 1 business day to give me enough time to settle the transaction and acquire the coins to return. This plan pays a flat 3.5%.

Storage
This plan works as an ongoing commitment.  You would send coins anytime to the address provided and you would earn interest on a daily basis.  You can withdraw your balance at anytime, but I do request that you give me a couple hours to insure I have coverage for the next order.  Interest payments are paid out ever 3 days until either you withdraw the funds or my local dealings dry up and I can no longer be profitable. This plan pays 1% per day.

Now I would hope to have enough people on the storage plan that I wouldn't have a need for the on-demand but I'll see how it goes.  I ultimately want the ability to provide coins at anytime and any amount for these guys and we can all share in the profits.

I've created my own custom management software that I've built to monitor deposits, withdraws and interest payments.  As this gets bigger I'll build a front end for it so users can view and manage there account and maybe putting that domain btclending.com to good use.   

For more information send me a PM or just ask below.  You can check out my OTC ratings in my signature.

Edit: I forgot to mention that dealing with anything less than 50BTC is more work than its worth so I've made that the minimum on both plans.

Thanks

Anybody have any details on what Pirate was doing?

Pretend for a second that there is/was no small group of people that Pirate dealt with from the get-go, but virtually everything else was part of his business plan. What would such a business plan be called? Does is start with a P?

Although I have a certain empathy for those who've lost money in Pirate's venture I, for the life of me, can't believe the score of brainiacs on this forum who invested in such a scheme, for lack of a better word, after doing their due diligence and made aware by Pirate--a fairly new kid on the block at the time--how the operation makes money: selling bitcoins to his local group of don't ask don't tell people. This, in and of itself, is a red flag, and I'm not just saying that in the hindsight-is-20/20 sense. It's commonsense! If said brainiacs were approached prior to being Bitcoiners, or today, by some slick-talking guy on the street offering up 5, 10, 14, 17, or whatever percent weekly return in dollars (or other fiat), I'm sure as hell they wouldn't have, or will, touch such a venture with a ten-foot pool, yet there they were, sailing away with a Bitcoin Pirate.

That said, this is what I firmly believe. Either the main investors were in on this scammmmmmmmmmm or they lack commonsense business sense. Either way I, for one, would not feel comfortable conducting business with them. Either something nefarious is afoot, or idiot label applies.

If by some chance the above hits you below the belt, feel free to comment, stating your case on how you're a bright business man, but had alpaca socks pulled over your eyes on this one. Perhaps I'll learn something from any forthcoming exchange(s).

~Bruno~

Time is money. Money is time. Clients pay %markups for instant availability, for anonymity.

Let me give you two possible examples:

First example:
Let's assume you wanted to try to play the market, say $50k a month. (Pocket change for any real market wizards.)  You didn't want to keep large amounts of cash or btc tied up, but to be able to jump in/out of the market at will, without leaving IRS-related ripples.

Today, that's impossible.
-- Sell BTC today, and tell me how long it is till you have $real-money$ in your hand? 3 days? 5 days?
-- Have cash in your hand? How long till you get BTC? 48 hours? more?
-- every > $10k transaction is entitled to fairly high levels of visibility.

What kind of percentages would someone be willing to pay to reduce that to 4 hours? 2hours? Is it worth a 10% markup?

In the financial trading world, a company called "Spread Networks" spent $millions$ of $usd$ to build a new fiber route between Chicago and New York, just to shave a few MS off that path... and the financial houses paid happily just for a few milliseconds of advantage. (http://www.forbes.com/forbes/2010/0927/outfront-netscape-jim-barksdale-daniel-spivey-wall-street-speed-war.html)

Second example:
Let's assume you are moving "product X" from one part of the world to another. You don't want to leave a money trail. You need someone on each end willing to move $$$/BTC in large amounts. you don't care at ALL about the 10% ding. You don't care what the market price is, because you're moving in/out of btc.

I'm not sure why these concepts are either so hard to understand or so difficult to believe. I'm not saying it's impossible that bts&t was a scam. I'm not saying it's impossible that it was a ponzi. I'm not saying Pirateat40 is a standup guy who will return all the money.

I'm saying, just because you don't understand it, doesn't make it impossible.

If this was true more people would be coming forward saying they traded privately with Pirate.

He might have started off BTCST with good intentions, but got power hungry and greedy. He might have realized that he could easily run with the money. It will be easier for him than if he had run with the equivalent in USD. Much easier.

It probably went all pear shaped when he got his paypal account shutdown.  :o
They'll probably release his funds in 3-6months.

here is a spreadsheet that shows if u invest $100 at 7%/wk compounding u have $130 trillion in 8 yrs

Starting today, I've lifted the referral only requirement to open a Savings account.
Any account that holds more than 5k BTC will automatically be upgraded to a Trust account on that day.

Why would he be using PayPal?

I am baffled by all the posters who still don't believe it was a ponzi. Could any / all of you please expand on why you still don't believe this?  

People fall for Ponzi schemes all the time.  Here's a recent one from meatspace in Poland:

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? ???

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? ???

I think most have conceded, but some are still holding out hope for the 9th and that something magical will happen.

Also keep in mind some of the ones saying they don't think it's a ponzi have to say that, since they took other peoples money to invest in it. Big ol can of legal worms there.

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? ???

What is special about Sept 9th?

so much... stuff.. being said.

If you believe what pirate himself posted back in November:

https://bitcointalk.org/index.php?topic=103623.msg1137230#msg1137230

then here was his business:


That's consistent with conversations I've had with him, sidebar, about potential $USD investors.

My 'theory' at the moment is poor planning combined with what was essentially a 'run' on his bank. http://en.wikipedia.org/wiki/Bank_run

Together, down goes the house.

Not that hard to figure out, and given the same circumstances, could happen to your local "community" bank.

...
There were victims of Madoffs who YEARS after he was arrested believed it was all some misunderstanding or clerical issue.  Some thought it was some govt conspiracy to take Madoff down and their funds were simply collateral damage.  All kinds of fantastical (and highly implausible) conspiracy theories.      There are people still TODAY asking where is the money.  Even when explained that the incoming money was paying out prior investors for decades (and a nice cut skimmed off the top by Madoff) they hold out hope that the money still "exists".  While they can comprehend that Madoff was a theif/scam artist they still cling to the paper totals and can't accept that there is not some hidden bank account somewhere with all the money.

As to your direct question.  A bunch of reasons:
1) Some as simply in denial.  If the believe it wasn't a ponzi they will get repaid and have the last laugh

2) Some accept they will never get the money but wont admit it is a ponzi because they will look stupid.  So as long as they "demand proof it is a ponzi" well then they can win some kind of stalemate on the level of "nobody will ever really knows if it was a ponzi or not".

3) Some are criminally complicit.  They knew it was a ponzi and encouraged others so they could profit off it.  They will NEVER admit it was a ponzi.  Hell if Pirate said it was a ponzi they would still admit they didn't know and come up with fantastical stories on how it *could* have been a non-ponzi.

4) Some simply want to be right.  The ponzi vs ponzi "forum war" was divisive.  Some people just want/need to be right even when they ended up on the losing side.

You will never have 100% of people admit something even when it is obviously true.  Hell there are people who won't accept that the Holocaust ever happened.  There are mass graves, stories told by millions of survivors, documents, news reports, the actual concentration camps still existing and some people STILL (and NEVER will) believe it happened.  There will be far less direct and physical evidence of Pirate's crimes.