Bitcoin Forum

http://v1.ripper234.com/p/why-i-trust-patrick-harnett/

Since Patrick is now in default, and got a scammer tag, this thread is now defunct (renamed).

For what it's worth, I believe Patrick wasn't an intentional scammer, just made some bad decisions in a bad situation ... but I don't really know. I've been out of touch with the lending scene in the last few months.

Nice post! I agree with every word.

Don't trust anyone. Only invest money that you can live without.

definitely true, but patrick is up there with my local bank in terms of trust IMO, I've dealt with him enough.

It appears he invests with pirate, so what is this, paying 1% - 1,5% for being able to invest with pirate and pocketing the 5,5% - 6% difference??

He's a starfish, why wouldn't you trust a starfish?  ???

Patrick is the most honest and trustworthy poster that I've encountered on here.

I would be happy to deposit a lot of coins with him and hopefully I will do so in the future.

He runs separate pirate pass throughs if requested.

The 1% interest is coming from his other activities.

I was avoiding posting here, but I obviously need to provide (repeat) some information about my business and it is my private business and doesn't need to be disclosed.

Yes, I have a BS&T account, and have had it since 17 December 2011 (no secret, it's announced in the BS&T thread).  For a long time it sat around 4k and at the moment it's sitting at 10k and will probably stay that way until Christmas.  I'll be getting 5%/week on it as I don't expect to be attracting pass-through deposits.  Income derived from this account goes into two main activities:
1: Increasing BTC investments including GLBSE assets, mining equipment and a stake I have in things like a BTC electronics business, and
2: Cashing out funds to pay for various real-life things including various organisations like our local homeless shelter which is costing me a couple hundred dollars/week thanks to the efforts my wife makes.

Outside of the BS&T account, as of today, I have 10,794 BTC outstanding in loans and 10,586 BTC held on deposit (plus 160 in the 7Seas fund).  This is the core business of StarFish BCB and what generates the return for people looking for something other than BS&T exposure.

I agree with the OP. I thank Patrick for looking at loan requests fairly as he did when I took a 200BTC loan from him (repaid). Not all Jr. members are scammers, I have been around for 7 months, just don't say a whole lot. People do stereotype very quickly around here based on your post count. I requested my loan directly from Patrick via PM because more often than not when posting many people will find some reason to cry fowl even if they had no intentions of funding a loan in the first place. You know what I mean the "Mother Goose", just doing their duty to watch out for people so they don't get scammed. A lender will do their own research before funding a loan.

I can imagine it is tough to weed the loan requests out and pick carefully for who to provide a loan. All I can say to those requesting is that providing your verifiable true identity goes a long way to put a lender at ease. I provided multiple pieces of ID. I can see why that would be mandatory when you have not established any rep.

Thank You Patrick, and best wishes with all of your current and future endeavors.

Great to see satisfied customers of lenders / investors. This is what unregulated capitalism looks like. Here's to another successful year.

+1

Patrick (and his Starfish Bank) has my total trust.
That is all.

Agreed, +1 for patrick

Agree 100%

I agree 100%

Great guy to do business with.

Total transparency + excellent business sense & ethics + totally trustworthy and personable = Patrick Harnett :)

Agree 100% also, great guy, very trustworthy, and easy to deal with.

+1

Patrick Harnett is a god among men. That is an understatement.  :)

he's mormon?

That's just silly - you should have heard the derision from my wife.

Speaking of this, Kluge is also very trustworthy.

That is a Godly amount of trust.
*bows*

PM'd Patrick wanting to withdraw >300btc i had on loan to him, 30 minutes later the coins were sitting in my wallet.
Top bloke!

http://www.stuff.co.nz/business/money/7316575/FBI-seizes-Kiwi-SpongeBob-coins

Hey, would anyone be interested in silver "In Patrick We Trust" coins?

Can someone explain the purpose of this thread? Was Patrick called into question?

Yes, by my wife :)

Before I invested with him, I had to explain to her why he's reliable ... so I wanted to share the information with newcomers. This post on my blog actually attracted at least one friend of mine who is now interested in investing with Patrick (but without being exposed to BTC-USD flucutations (https://bitcointalk.org/index.php?topic=95282.0)).

Ooh, that sounds like quite the idea  :o

Matthew N. Wright. Any wagers on offer?

Hell yeah! in the shape of a starfish!! Cool.

While some people do trust me, I would like to point out there are some that do not.  Some of those people I have never had contact with, nor have they discussed with me the issues they have.  There is also a special group that have assumed I'm only here in Bitcoinland to steal money from people, but I'm not going to convince them otherwise.

I am aware of at least one "bet" about my failing to make repayments.

Якщo пoтiк з'являєтьcя в peжимi «кopoткocтpoкoвoгo кpeдитyвaння", aбo "дoвгocтpoкoвi пpoпoзицiї," цe Пoнцi.

Totally laughable response. YOU are a scammer, and you're supporting more scammers. No investment product can guarantee returns anywhere near the frauds that are all over this board.

Я cтaє нacтiльки виcoкi, людинa

Well, and you also need to take all the risk yourself and still be willing to settle for only a sliver of the profit. And you have to stubbornly refuse to pay back your ultra-high-interest debt even though there's no possible reason you still need it.

Why would you 100% agree with me but prefix it with "I don't follow you" and follow it with "What are you talking about"? You've just said exactly what I said. You are taking all the risk. You are keeping only a sliver of the profits. And you continue to borrow bitcoins at ultra-high-interest even though you are making enough money to pay those debts back. And that should, rationally, be your top priority. Any profitable business would make paying back ultra-high-interest loans its top priority.

Either you're making a lot of money yourself or you're not. If you are, there is no rational explanation for why you continue to acquire more ultra-high-interest debt. You would have paid it all off and never borrowed again. If you're not, there is no rational explanation for why you expend all this effort and take all this risk.

How much of your net worth would you feel comfortable keeping in bitcoin? What you are suggesting could be devastating if for whatever reason bitcoin crashed and a person had most or all of their profits invested in their bitcoin business. But if you borrow and all your debits are in bitcoin you don't care the exchange rate. It's a way to short.

No sane person actually believes that there exists some massive supply of ultra-low-risk, ultra-high-interest loans. And no sane person with the wisdom to exploit such a pipeline to financial success (assuming it exists, which it doesn't) would also be so stupid as to borrow money at 100% APR. You can treat other people like idiots but I'm not falling for it.

6%/month is slightly more than 1.5%/week. As Gavin put it: It is impossible to get risk-free 1.5% weekly interest, I don't care how good you are at "playing the market" or "choosing who to lend to."

Why wouldn't you return 400 BTC of deposits after 2 months?

This needs to be repeated over and over until people start to get it.

So you're saying that someone with the investment genius to consistently land low-risk, ultra-high-interest Bitcoin loans would also pay an APR over 100% just to short Bitcoins?! Seriously?!

 
There's not any that pay out 100%+ APR that I would say are trustworthy, so no. I'm not saying that.


edit:

but this guy seemed to have pulled it off for a short period of time

https://bitcointalk.org/index.php?topic=87780.0

I have no objection to you doing it with your own money. And every explanation I've heard for why other people's money is needed fails the giggle test.

One was pointed out to you and you just write it off as "publicity stunt". TBH I think that's more laughable (paying high interest for publicity) than to short or hedge risk against volatile bitcoin exchange rate.

Yes, it was quite clear in that case that they didn't actually need investment money. They were basically just taking it to see if it worked. And the high interest rate loans were cut off very quickly.

The amount of money involved was very small. There's nothing wrong with shorting or hedging against volatile exchange rates. What's idiotic is paying 100% APR to do it with zero leverage.

Why do we keep using that number in a thread about a guy offering 67.65% APR? That interest rate is still ridiculous so there's no need to overstate it. I think it's pretty easy to generate plenty of funds to cover this rate. Considering bitcoin fell ~30% in the last few weeks I also don't think it's unreasonable to offer a little over twice that per year for protection. The thing I totally agree with you about is the "guarantee" It's more likely the issuer thinks it's low risk and willing to risk reputation on that fact. As the holdings get higher, reputation means less and less.

I know Patrick is legitimate, because one time, there was this little yellow dude that owed him money, so he decided to "Reclaim" his funds with his Kickboxing talents. Sadly, the little yellow guy was psychic, and destroyed Patrick. But I made sure I placed a strategic ice cube, so when that little yellow guy came a knockin, he "fell down on the job"

Long story short, Patrick got his money back, and paid his investors. While he "spruced up my paint" in gratitude.

+1

Yeah. 1%/week is around 67% APR. 1.5%/week is around 117% APR.

The main problem is that investors have no way to assess risk. Funds compete based on the reward, which creates a huge incentive to increase risk.

Fundamentally, it's this simple: If the fund operator is not making decent money, there's no good explanation for why they'd go to all this trouble and risk other than that it's a scam. If the fund operator is making decent money and not exposing their investors to extreme risk, the first thing they'd do with the money they're making, if they're not an idiot, is pay down all their ultra-high-interest debt.

What if the extreme risk is bitcoin itself, but the debit is denominated in bitcoin?

There is risk in the volatility of bitcoin's value and the possibility that bitcoins will become all but worthless overnight and never recover. We can disagree over just how much risk there is, but there's no question it's there. This puts a bit of a drag on everything we do with bitcoins. Fortunately, there's so much friction in the traditional financial system that this doesn't actually hurt bitcoins very much. But we do need better ways to hedge these risks. There are definitely ways today that don't require paying huge fees to get no leverage. But they could be a lot better and that would help a lot.

Denominating debts in bitcoin makes the debtor short bitcoins and the borrower long bitcoins. Debts could be a sensible way to speculate on bitcoins if the market wasn't so messed up by fraud. Ironically, it would probably actually help bitcoins if the borrowing market were heavily regulated. (Of course, it's unimaginable that you could get beneficial regulation in the borrowing market without also having horribly harmful regulation in every other aspect. So I'm not suggesting that's a workable solution.)

+1 / well said. 

It's the constant need for new money after claims of making large profits.  Tell tale sign of scam.

Stop picking on Burt, who is smarter (and I bet richer - legitimately/via legal means) than any of his detractors in this thread. Everything he has said is true. Burt is a top bloke! Stop picking on my starfish too. There are actually honest people in business you know. You trolls should find a helpful outlet for your misguided energies. Charitable work perhaps?

Tell tale sign of passive-aggressive loser/bully Micon...

If there's one way to unravel any semblance of professionalism you've built up for your business over many months, it's to have your spouse suddenly appear and start engaging in personal slanging matches with your detractors.

Patrick is an honest guy providing a valuable service.  The fact that his wife wants to defend him is understandable.

She's entitled to her opinions.

Three words : the long con.


Mark my words.

Marked  ;)

You should stop now. Your desperate attempts at name calling just makes you look sad and certainly doesn't help the person you claim to be the wife of.

This thread seems a little off track. I am surprised to see people with many posts and elevated forum status make comments like this. I've been around since January and don't say much because of the many people around here that have this type of attitude. Really......would there be someone out there that would claim to be the "wifeofstarfish" and said person not be the real wife......I doubt it. If I was in the shoes of Starfish I would also wan't to invite my wife to the forums to see the kinds of things he may be dealing with and responding to, like this for example.

I have done business with Starfish on multiple occasions and feel he is a man of integrity and a pleasure to do business with. Look back at the many pages here from people who feel the same way. I doubt anyone has had a negative experience. Just because something negative happens to another service provider that had a great track record doesn't mean that the same thing will happen to others with an un-blemished record.

And lastly....welcome to the forum WifeofStarfish, I'm sure you see how it is around here already.

You realize that you're rebutting an argument nobody made. This is likely because the arguments that have been made have no rebuttal. All of the signs of a scam are present. No explanation other than a scam is plausible. Therefore, it's almost certainly scam.

Who is more foolish, the fool or the fool who follows him?

I was immediately reminded of Charles Carreon and wife...

How can you not understand that it is possible to earn more than 1% a week, making paying out such an amount profitable?

As well as people paying high interest rates for loans, look at the dividend yields here: http://www.stochastically.com/

It's possible some of the deposit schemes are run as ponzis or are some other sort of scam, but to go after Patrick is crazy.

I am honestly upset at the way this forum is going. Healthy criticism is good, but the recent discourse is far from that.

This!

Not profitable compared to not paying out such an amount.

Please show me something that we know is not a Ponzi scheme that has consistently paid out 1%/week or more at low risk.

It's not just that it's possible, no other explanation is known.

Can you explain why a person with the incredible financial wisdom needed to make that much money would nevertheless be idiotic enough to borrow money at about the highest imaginable rates? The only known explanation for needing so much of other people's money is a Ponzi scheme.

I agree that  the recent discourse is far from healthy criticism. If you have any better ideas, I'm willing to listen. But I fear nothing will work and people will invest in obvious scams no matter what anyone says.

Not patrick, but how about looking at BDK's financials.. Very believable 1%/week.

https://docs.google.com/spreadsheet/pub?key=0Ao892S4MOoDZdGZSbjJVd1ZTbFVLZE5aRE95bE91NVE&gid=21

+1

Thanks Cobra! I'm certainly well-informed about Patrick's bitcoin business - it's my marital money involved too! And I am entitled to be angry when people slander or troll him. He doesn't show it on this forum but he gets affected by all the negativity directed his way.

Anyway, better zip my lip from now on (with the exception of responding to that idiot Micon)

Wendy

Had to look him up and I don't think there's much comparison
Wendy

So it's ok for Micon to say Patrick is running a scam but not for me to express my opinion on his accusation? What a very even playing field this forum is - not

WifeOf Starfish of 26 years today (wedding anniversary)

Really will zip my lip now...

Congrats  :)

I dont think Micon was breastfed as a child.

I think you fail to appreciate the difference between an opinion unsupported by any argument and a reasoned argument. It's not okay to respond to a reasoned argument with a bare opinion and pretend that this in any way invalidates the argument.

Do you have any explanation for why, other than it being a scam, your husband is making so much money he can pay unbelievable interest rates yet doesn't have enough money to pay off his own ultra-high interest rate debt? Because the only reason the rest of us can think of is that he's scamming. If there's some other explanation, we don't know it. And all other such schemes in the past have turned out to be scams.

There's no point answering this. You'll believe what you want to. Only wrote this in case my silence was construed as ''hiding something''.

But there's a point in pretending to?

That's a good one! In case you run short of witty retorts, you may want to add "Says who? and "That's what you think!" to your repertoire.


I don't know if you're a shill or you've been duped, but there are arguments on the other side that you refuse to either acknowledge of respond to. You simply keep insisting on a position not only in the absence of evidence but against the weight of all evidence.

Do you know why your husband needs to borrow other people's money at outrageously high interest rates even though he supposedly has some sure fire way to turn massive profits? Or are you taking his word for it? All logic and reason suggests that someone who had a source of extraordinary wealth would make paying off usurious loans their top priority.

I find your behavior extremely bizarre. If you're attempting to vouch for your husband, you need to respond to the substance of the complaints.

Which one in particular? most of what I see are:
- Ponzi's, some more blatant than others.
-  mining bonds. Sure, they pay high yields, and are not ponzi's, but they lose value much faster than the dividend makes up for.  If you create a derivative that passes on the dividend of those mining bonds but doesnt account for their free fall market price, you effectively do have a ponzi. This is basically what Diablo did with DMC and see how thats going.

I don't understand the argument here. If all my capital is out on loan at some percent interest, why would I not borrow more money at less interest than I loan out at in order to be able to increase the amount I am loaning out and thus increase the amount of interest I am making? It seems to me banks do this all the time, getting bigger is a bad thing all of a sudden? What is the discrepancy? Is Patrick only loaning out a small amount not all that he has available?

-MarkM-

The question is, why would you borrow it at 1% per week when you can easily obtain credit for less than 1% per month? Even a credit card debt is a lot cheaper. And if Patrick can produce 1.5% per week sustained returns, why would he still have to borrow at all? I would have expected someone like that to be filthy rich, since not the best hedge fund managers in the world or even Madoff ever claimed to be able to get anywhere close to such returns.

Borrowing in fiat to loan out bitcoins? SOunds like some nasty exchange-risk there.

General Financial Corp thought they had a good thing going by borrowing from the Canucks, repayable in CDN, to loan out DVC at twice the interest rate. Turned out the exchange rate was prohibitive, so they negotiated an even lower interest rate with the Martians, payable in MBC. But still exchange rates were killing them.

In the end, it turned out that they had to negotiate a loan payable back in the same currency - DeVCoins - as they were loaning out in order to have a viable setup.

After watching that all happen, I would be very cautious of any plan to borrow in one currency to loan out in another...

-MarkM-

1) Borrowing BTC to convert to fiat does not make sense. You can get cheaper loans in fiat without the exchange risk.

2) Borrowing fiat to convert to BTC is also risky for both the lender and borrower. In addition to the 10% APR you need to add the exchange-risk. BTC-USD can easily go up by 50-100% or down by 50% over the next 12 months. If I were someone who borrowed USD at 10% APR from by bank, converted that to BTC, and loaned out the BTC to a business venture that operates using BTC (and not USD), I would probably loan it out for at least 10% + 50-100% APR = 60-110% APR. That way the BTC interest takes into account the USD interest and the BTC-USD risk.

3) Borrowing BTC to use as BTC makes more sense. It is difficult to say what a reasonable APR would be. It really depends on whether BTC-USD is expected to rise or fall over the loan period. IMO the APR should be less than 2), but probably still higher than fiat rates.

In summary, because of the exchange-risk component I would NOT consider a BTC loan with and interest rate of 60-110% APR to be usurious. Borrowing in BTC makes sense only when that business needs BTC and not fiat.

I responded to that argument at least five times now. When you realize it's basically, "I borrow money at 100% APR just to short bitcoins with zero leverage" it kind of falls apart.

Well, if I want to ship my soda only in gold-plated trucks, my soda is going to be very expensive too. But that's why very few people ship soda in gold-plated trucks.

I don't trust you. If Bitcoins triple in price, how will you buy the coins to pay me back? But if that issue was resolved, that would be a great offer. I know quite a few people who are long on Bitcoins for the long term who would be quite interested in something like that if they could trust you.

Noo!

2. Is a bit risky but if you are really making significant returns I think you'd start doing it in a small way, eat rice & beans and plow all profits back into your system.
3. Its possible you'd do a bit of 3, but you wouldn't open it up to the nickel & dime forums.  You'd tell your business model to one or 2 high bitcoin-worth individuals, get a much better rate, and most importantly, you'd be paying the thing off (reducing the size of the loan) NOT soliciting new investment.

But 3 is great if you need to pass tremendous risk onto your investors, or if you are doing a Ponzi.  Of course the first becomes the second as soon as some of your investments fail (and you hide that by paying out normally).

Your words reflect poorly on yourself - shame on you for bullying me

You are incorrect.   My wife is not supporting a scam or scammer, and your behaviour continues to be disrespectful.  Your attitude continues to be a significant negative for anyone considering to use this forum, let alone bitcoin.

I'm not a scammer.  If you think I am, please find someone I have scammed rather than continuing with your lies.

I also trust Patrick, He gave me a 209BTC loan about a month and a half ago. He answered all of my questions and responded quickly even thought we have a huge time difference. Once my my funds are back in order I plan on depositing in an interest account with Patrick with no second thought about it.

Where is there any bullying? SHAME on you for shilling for and supporting a scam/scammer.

Deposit rates have been reducing as the market starts to mature a bit more. I think we will see them approach fiat rates eventually. Patrick has explained this before for anyone willing to actually listen to what hes saying.

You simply cant loan out bitcoins at fiat rates at this point in time but Im sure as more local bitcoin loansharks come on board youll be able to get lower rates by using collateral they can repossess in the event of a default.

After reading your (short) post history it is clear you are here only to troll

Patrick is referring to a Mosrite post that has been deleted at my request

Was it obvious all along that Pirate would one day have to default and be unable to repay principles deposited with him? If your answer is yes, why is it not equally obvious with you? If your answer is no,  why would it matter whether I could or couldn't find someone you scammed? You couldn't find anyone Pirate had scammed until the day he stopped making payments.

On that logic, you are a scammer too - the presumption of guilt in the absence of evidence.  I find that quite a silly stance to take, and if that is how you view the world, it must be an unhappy place.

Is that the way the US justice system works perhaps - presumption of guilt in the absence of evidence? Hopefully not!

Joel does make a good point. And I do appreciate the awareness he is raising on these boards.

However, I truly hate to see Patrick's name being drug through the mud. FWIW, I don't think for a second think he is scamming anybody. I know everybody said the same thing about Pirate, but I believe that 1% a week (R.I.P. Starfish :( ), as outrageous an IRL rate as it may be, is very manageable given what I've gathered about the lending economy here. For now, at least. Of course it isn't (wasn't) risk-free, but Patrick seems intent on treating his depositors right, even when it costs him.

Why anyone (besides a miner) would borrow bitcoins is beyond me, though. Scary bull market is scary.

In the court of public opinion sadly this is exactly the way it works.

I would add that I've had several dealings with Patrick and he has always conducted himself professionally.

i will also say that I've had several dealings with Pirate and has so far conducted himself professionally as well, including paying back my personal BS&T account after his closing announcement. I still have another account with him and it remains to be seen if that is re-paid.

Please show how you can use that logic to show that I'm a scammer.

If you think it's a silly stance then you should have no problem showing me what's incorrect about it. The world is not an unhappy place, but it would be much happier if it wasn't polluted by ponzi schemes.

If he has some source of money that's so amazing that he can afford to pay 1% a week interest and still make money, why doesn't he use the money he is making to pay off his debt? Nobody has ever explained why such a scheme would require a constant flow of other people's money other than that it's a scam. Any rational businessman who was making a ton of money would make paying off his high-interest debt his number one priority. There is exactly one known explanation that perfectly explains all the observed facts -- it's a scam.

You seriously believe that Patrick is so smart that he is the first person to figure out a way to reliably make ultra-high profits at low risk and is simultaneously so dumb that he borrows more and more money at *way* above market rates? How do you manage to pull that off?

If the business is precisely the allocation of idle, unused capital to potentially profitable businesses who happens to need it to be developed to their maximum capacity, it does indeed make sense to get indebted. The profitability of the allocator comes from taking a cut from the maximized profitability of the capitalized business, and so he can share that cut with his lender, the capitalist.

I know, your concern is that this scheme has risks attached and you can't understand how they claim that the lender isn't at a risk. Yes, this is the weak point of their business as I can understand it (if his business really is what they say it is, because I don't have that as a fact, but I tend to believe that at least Patrick and Kluge are doing what they say they're doing). The lender is effectively taking a big risk, and all that jazz about some "guarantee" or "insurance" comes down as soon as anything goes wrong, and a lot of things can go wrong...


Maybe his profits aren't that great. Nor are those of his lenders, if you take into account all the risks attached... Maybe that's precisely the point that they are realizing now...


Edit: s/lendee/lender/ I confused the terms...  :P

Joel... you're being an argumentative asshole. Patrick is willing to provide ample personal information to anyone depositing with him which provides plenty of recourse should anything happen. Why not troll some where else?

Yet nobody will answer his very simple question. The only responses have been evasions, smokescreens, and personal attacks.

+1

So now the theory is that he is doing all of this work and taking all of this risk, and all he's getting for it is miniscule profits? This again boils down to him being an idiot.

I've just reported you for being abusive. Maybe one day the moderators here will actually clean up this forum and make it a place anyone can post without being abused. Shame on you.

I'm not being argumentative. I'm only repeating the same argument because I have yet to get any rational response to it. My point has nothing to do with his personal information or recourse. People had Madoff's personal information and he appeared to have large assets that would provide recourse. All of that is just not relevant. People think that someone can't be a criminal just because they know them. Well, guess what, criminals don't live in cement cages they do not leave, at least not before they're caught. Scammers know how to convince people they are ordinary, trustworthy folks. And many criminals don't care to hide their identity -- especially since nobody has yet been prosecuted for a Bitcoin-related theft.

But more importantly, my point is that there is no known explanation for how he could be doing what he claims to be doing other than that it's a scam. And there is no imaginable other explanation for why he would need or want a constantly increasing supply of other people's money at exorbitant interest rates.

There is simply no way a rational businessman would take all this risk and pay such high rates unless he was making a significant profit. And the first thing a rational businessman would do when making a significant profit is pay off his absurdly-high interest debts. And if the risk is high and he nevertheless had the funds to cover losses, the most rational think to do with those funds would be to loan them and thereby get rid of his high-interest debt. No rational person would have $50,000 in a bank account and still borrow the equivalent of $50,000 in BTC at exorbitant rates.

The only known explanation is that it's a scam.

Do you have some kind of response to this argument? Or are you trolling?

It was never "constantly increasing," for one.

How is that abusive exactly? I'm not saying he is an idiot. I'm saying that argument boils down to arguing that he's an idiot. Obviously, it's an argument I don't accept.

What is abusive, however, is calling other people abusive to shut them up or make them feel or look bad. And telling people you're reporting them to the mods to silence a view you disagree with is bullying. I don't think anyone finds your feigned fragility convincing.

This isn't a boxing match, and the opponent isn't exerting himself. Y'all can't tire him out by letting him continue to punch at you, heh.

What the hell is your problem? Do you think you are intellectually superior to everyone else? Is your life so miserable that you devote pages of ranting to a service you aren't even invested in?

If you're not going to respond to me, please don't pretend to.

I explained what my problem is. Here it is again in case you missed it even though you quoted it:


If you have a rational response to that argument, I'd love to hear it.

personal information is about as useful as yellow snow when an investment defaults
Pirate has had all his details published multiple times and even  sat in the same room with people a few weeks before his "investment defaulted" scammed   everybodys money

its like pirate part 2 , why does anyone  need to borrow money at crazy rates if you are capable of making insane profits ??

joel is being attacked for asking very standard questions about the security of an investment by a few supporters of said investment

does any of this sound familiar yet ?

:(

If you met me face to face you would not accuse me of ''feigned fragility''. Do you understand that the more you are toxic on this forum, the less the people you want to hear from will post? You have lost Starfish for starters: he has had enough.

+1

You are the most detestable individual I have ever come across on the internet

The more you evade the simple questions with distractions, the more obvious your shilling becomes.

The questions remain, and there is only one plausible explanation. You certainly aren't offering an alternative.

You're right. It's hard to stay detached/neutral though when someone is shitting on your husband. I will try however.

P.S: must be the ''Cleveland Steamer'' act....

Interesting mental image.

When you run a high-profile "credit-rating" and "investment" operation without explaining what is going on and failing to answer simple questions, you must expect your reputation to suffer.


"Ourageous" yet "very manageable."  ??? What is it about bitcoin that makes people suspend all disbelief and take on magical, pixie dust thinking?

Look, the reality is simple but ugly: the "lending economy" here is a cesspool of scams.

I know, it's the inevitable gauntlet. You are correct.


I wouldn't know. I'm not the one borrowing an appreciating asset at very high rates and subsequently repaying every last penny. Strangely enough, this is happening every day on these forums.


Hmm... Recently I lent 40 BTC to a moderator here, who repayed ~12% interest after about a month. It was easy peasy.

What do you have to say about that? If I had more bitcoins, I could make more loans. It's pretty simple.

Name calling is not a substitute for a reasoned response. One more time in case you missed it:


Is there something erroneous in that reasoning? You've done everything from getting offended to calling me names to making ad hominem arguments -- you've even tried to hurt my feeling and bully me into shutting up. But the one thing you've not done is shown that my argument is actually incorrect.

It sound like you are being conditioned.

Is your feigned fragility hurting you?

Here's where you fail..

First, if a rational businessman is taking on a bunch of risk and paying high rates, he must not have much capital of his own or else he wouldn't enter into such an arrangement in the first place.

Second, if a rational businessman is taking a large risk and has to pay high rates, he probably has a high gross return, but when factoring in the high rates he is paying, the net is probably much smaller.

Third, which relates somewhat to the first, is that a rational businessman knows that things come up.  Unexpected things.  When those unexpected things come up, typically, they're costly, meaning they need capital quickly.  When borrowing, you can't force people to lend to you.  A rational business man knows having a reserve of profit in those instances helps to fill those immediate need situations.

TL;DR In short, there are times where it makes sense to keep cash on hand vs paying off outstanding debt.

EDIT:  I forgot to tie this back to PH, since that's who seems to be who everyone has a hardon for lately..  He's not accepting any more deposits and honoring all outstanding obligations.   I'd say that's the largest evidence of 'not ponzi'.  I've not seen any of his customers (borrowers or depositors) dissatisfied, so unless you want to call them idiots too, I'd say things are working just fine.

Maybe so.

If he's being conditioned by the moderators here on the forums, then perhaps its time we spent some time pointing fingers at them for fostering such a terrible environment.

Then I's sure you realize that your attitude (cultivated within this incubator of grifters) makes you an attractive mark.

Sure, those would be the times when you aren't making a good profit. But if you're doing all this work and taking all this risk and not making a good profit, you're basically a fool.

That's an excellent point.

Maybe so.

Ahhh.. right.  Every business makes tons of profit right away.  You never have to invest a shitton of time and effort to get it off the ground.    If you're so good at it, why are you spending so much time trolling these forums and not making money?

+1 Imsaguy I love you (platonically - my heart belongs to Starfish)

Joel,
Man up - you're losing your mojo (are you using both hands?)

I agree that you could need to borrow money for a short period of time while building a business. However, if you borrowed it at way above market rates, your first priority as soon as you were making a profit would be to pay those loans off.

There is no such thing as being "good at it". The claims are *impossible*. But I guess I'm willing to give it a try. Why don't you invest $5,000 with me? I'll take it to Vegas and if I win, I'll split the profits with you.

Bitcoin profit margins aren't like USD profit margins.  Bitcoin is throwing out tons of new coins out constantly.  When factored as strictly BTC and not USD loans, the opportunity for growth is much larger than your typical USD equivalency.  The reward halving will reduce this by a bunch, but its not going away entirely.

This kind of reads like word salad to me. The price of Bitcoins is roughly constant, just volatile. So all it does is add additional risk. Any additional profit potential could equally well be realized with loans in dollars. Just use the dollars to buy Bitcoins, profit with the Bitcoins, sell the Bitcoins to pay back the loans. Even the best arbitragers in the most volatile markets don't make 1%/week.

I like this. Shows with "Impossible" in the title seem to be popular on syndicated networks these days.

"Lending: Impossible"

In this episode... Patrick follows through with a plan of action to take with a loud man - HashKing finds a not-so-happy potential lendee displeased by loan rejection - and James gets an unusual credit application. Find out what happens - tonight - on Lending: Impossible.

*Intro*
*fade out*
*Fade into Patrick... 'click, clack, click, clack' ... Patrick stares at a computer monitor*
[WifeOfStarfish]: Pat - whatever happened to that loud man on the Internet?
[Patrick]: I started using the ignore feature.
[Ben]: Pat - you know your mic's on? You know what's nice about the ignore feature on this forum? With some browsers, when you click "show," it doesn't reformat the post window, leaving just a few pixels in height for viewing the message. It's too tiny to read, so even if you're tempted, you can't easily/quickly view what they've written. Day becomes much more productive.
[Patrick]: Good to know. Time to do some cooking stuff.

*Cut out - Fade into James in a slouching position, reading email on a plane with his tablet computer. He turns to an unidentified man.*
[James]: Yesterday, someone sent me ... an unusual credit application.
*Zoom to lenders' faces showing concern, shock, and awe -- Fast fade out, go to logo*
[Narrator]: Find out what happens next on Lending: Impossible. Stay tuned!


... That's good enough to justify a pilot, right?

First off, the largest stability there was in price since it was <.25 was this spring/summer when BTCST was in full swing.  From June to July, it gained 20%.  July to Aug it gained 30%. Aug to Sept it gained nearly 50% before losing that much.  That isn't constant.

Most lenders here are long in bitcoins, which means they don't want to convert their position to USD and lose out on coin appreciation, so your scenario doesn't fit.  Convincing a traditional bank to fund your bitcoin business really isn't going to happen, not necessarily because its a bad business idea, but because bitcoin is an unexplored minefield and no bank wants to be the guy out there exploring it first.

As to the market arbitrages, there is certainly at least one other way to make more than 1% a week in bitcoins. 

Definitely - so funny  :D

If lenders are long on bitcoins, the last thing they'd want to do is borrow money denominated in bitcoins. If bitcoins go up, they lose money. If you're long on bitcoins, you borrow USD and buy Bitcoins. That way, if Bitcoins go up, you make money.

A lot of people misunderstood this and thought that Pirate was long on Bitcoins. They figured he was holding some large number of Bitcoins and that therefore when Bitcoins went up, he made money. But of course the truth is the reverse. Every Bitcoin he held was owed to someone and then some, so when Bitcoins go up, he loses money. There's no conceivable way anyone who accepts interest-bearing investments denominated in Bitcoins could hold that fund with an amount Bitcoins that total equal to or more than the amount invested (except at a loss).

Its called a deflationary spiral.

Obviously, the only rational course of action is to borrow USD and buy Bitcoins. Or leverage up on Bitcoinica. ;D

Burt, I hope you are being sarcastic here and he really didn't change your mind. There are plenty of good opportunities to gain more BTC in my view.

Okay, it seems you are not sarcastic.

I feel that's where the reasoning is wrong because BTC loans may be quicker/easier to attain and you may explicitely need Bitcoins, not fiat. Converting fiat to Bitcoin is another risk/hurdle/time consumer in the chain. Basically, 1000 Bitcoins right now can be much more valuable to me than 11000 USD in a couple days at best. There are some opportunities that are profitable enough to warrant the need, and they don't have to be shorting. For instance, there was a nice profit to be had if you bought GIGAMINING for 1 BTC per.

As for what you can do with coins apart from lending them out or investing in some "shares" or "bonds" to generate a BTC profit, you can always speculate on the exchange rate, simply selling and buying or leveraging/hedging your long position via shorts/leverage or options.

It's pretty easy to get unsecured credit for a bitcoin business. The APR is in the 20s, but it beats the average bitcoin loan which is in the 200-400% APR range. As far as I can tell, these microloans are for people who want to buy something right now and thus don't want to wait for their money to clear through dwolla/gox or are short a little on a purchase and can mine the difference in a week or so. There doesn't seem to be an appetite for large loans both on the borrowing side because the APRs are too high and on the lending side because the risk of default is too high.

What US bank is going to give you a $50k unsecured loan for a business plan that's based in bitcoin?  I'll be there in a jiffy.

Look guys, there does indeed a place where loans with huge interest rates like the ones being discussed in this thread happens all the time: The loansharks business.

Now, the interest rates for you get from those upstanding individuals are all over the place. In some super-desperate situations it can even be a daily 10% but, in general, it is usually nowhere near that high. 10% Monthly (A bit above 2% weekly, which puts it very close to the BTC rates) is quite usual in some low-risk markets. That is, there is some collateral, and the shark is not lending to a (known) crack addict.

The thing about loanshark loans is that they're a very personal, almost intimate sort of loan. The loanshark knows you personally, knows where you or your grandpa live. On the other hand you know that, in the case that you cannot pay back, then you -or maybe sweet old grandpa- is going to get a visit by some dudes with lousy manners and baseball bats. Even knowing all this, people who desperately want to pay still default, because that's just how the world works. So faces are rearranged and bones get broken.

If the defaults happen when there is such a clear incentive for the borrower to avoid them at all costs, then how is it possible that the BTC borrowers can pay similar rates with such certainty as to be able to properly fund a company giving 1.5% return weekly? I mean, on one side we have an almost-anonymous, zero-collateral, electronic, distant transaction with some technical-minded guy in the internet and on the other we have a personal, with-collateral, in-real-life one with some huge dude with plenty of bats in a shady part of town. And while sharkloans have plenty of losses somehow BTC loaners are secure enough to ask for investors to come and join the good life?

Now, I am not saying that it is impossible for that to happen. I bet lots of people do pay their loans properly. But having enough people taking big enough loans, for long enough to fund a good-sized operation and having all of them properly pay back their loans? while still possible it's *extremely* unlikely. The winning the lottery 3 times in a row kind of unlikely, the one that smells fishy. Sorry dudes, but I really don't think you're better than loansharks at getting your loans paid back, yet you keep increasing your operations and asking for more capital.

I don't get how Patrick is being called into question, and Joel, your argument all seems to be centered around the fact that Pirate defaulted. Here is how Patrick is different. He's not running some unknown scheme, hes taking money from people, and using his good reputation as a major loan operator on the BTC forums, then using his own name to distribute that $, getting a good interest loan from people that are trustworthy by his standards, which are much better than most, as he knows what to look for in a person looking for a loan. If he is giving out loans at 10%, and then he pays his investors 8% and keeps 2% for himself, how is that not a sustainable business practice? Hes just paying out a little less than what he is getting in interest from other loans that he gives.

People are investing in the service of having their $ invested for them. People give their $, Patrick looks for people to loan to, he gets paid back the $ + Interest, pays his interest owed to his investors with interest he gets back from the loan, and takes a bit for himself. Provided the fact that Patrick has a great reputation, and is the standard in BTC loans, I would say more than likely, his business wont collapse, and you wont be defaulted on. Its a pretty solid business model.

That being said, I've never obtained a loan, nor given $ to Patrick, so I would consider myself to be unbiassed on this matter. I think people are just going a little bit Pirate crazy lately.

Now please, instead of calling Patrick a scammer, why not calmly ask him about his business' feasibility, how he plans to stay in business, real applicable questions?

You might try reading what I'm writing then.

No, not at all.  Pirate's default was absolutely inevitable. Reasonable people gained no new information from Pirate's default.

It's not sustainable because he is taking all the risk, doing all the work, and keeping a tiny sliver of the profits.

If that's what he was doing, his number one priority would be to reduce the amount he is borrowing to zero. No rational businessman would be making any kind of decent profit and yet continue to borrow at comically high interest rates. It makes no sense. If you think that model is great, think about how great it is when you're not paying absurd amounts of interest.

You don't have to ask the guy who claims he can make money by turning invisible to explain the details about how he turns invisible, how he makes money by becoming invisible, and so on. If Patrick expects people to trust them with their money, *he* has to make the case that this trust is justified. This isn't some minor deficiency or a case where there's some specific detail I'm asking for that other people might not particularly care about. This is the big pictures that's clearly broken. For example, if Patrick defaults, how will investors know that this is due to a legitimate investment loss and not due to Patrick deciding not to pay people? And on what basis can the risk of default be assessed? These are the most basic questions. It's not like there's some ultra-specific detail I want that Patrick could give me if I just asked for it clearly enough.

All you have been saying is that his business is not sustainable, your reasoning is pretty flawed. We are not sure what kind of "sliver" of a profit Patrick is getting, for all we know, he could be getting those 20-30% loans, and then paying back a fraction of that to his investors. Why would he want to reduce the amount of other people's BTC he is holding to zero? if he holds 500 BTC of other peoples, and 500 of his, he can lend out 1000 BTC total, and pay interest on 500 of those BTC. If he has 500 of his own BTC, and 1000 of other peoples BTC, he can lend out 1500 BTC, get more interest generated, have to pay back 2x as much interest to his investors, but he is still making 2x more in commissions, as well as he is still getting the full amount on his personal 500 BTC. The more he has, the more he can lend out, the more he can lend out, the more total $ he makes. And your point about how Patrick expects people to trust him with their money? They already do. You are the first person who I've ever seen call Patrick out, I'm quite sure all of his investors as well as many potential investors feel quite secure investing in Patrick.

You base your trust on the person, Joel (and I and many others) base our distrust on the business model. I dont know Patrick, but that doesnt matter, since I might not even be able to spot a ponzi scam artist if he lived under my own roof. OTOH,  its fairly easy to spot a businessmodel that has all the trademarks of a ponzi. IOW, leave your trust or distrust of Patrick out of it, if anything, Pirate should have taught you that lesson. Instead focus on what is known and unknown about the business.

The only anti-Patrick argument that hasn't been fully retorted is why doesn't he borrow fiat at a cheaper rate and convert it to bitcoin?

My uninformed guesses:

Ease - no value is quicker and easier to move about than a bitcoin.
Risk - by keeping all business in BTC there is no exchange rate risk.
Ideals - helping the Bitcoin community. This also has value in itself.

Why borrow at all? If he's making a narrow profit margin, why does he bother taking all the risk? If he's making a decent profit, why not use that profit to pay down debt?

Only an idiot would pay 100% APR to short with zero leverage.

People convincing others to invest in something that looks exactly like a scam does not help the Bitcoin community one bit. The community was worse, more acerbic and heavily divided, before Pirate defaulted than after.

You could ask why bitcoin mining exists at all because it is essentially marginally profitable and by your logic bitcoin itself doesnt make any economic sense!

Bitcoin mining != Bitcoin itself

Although I do agree that most Bitcoin mining is a bad investment and people largely do it as a hobby or for fun. Those people who do it as a business generally do take a large risk and don't make a very large profit. Compared to buying Bitcoins and holding them, mining isn't usually a good deal. The biggest problem is technology raising the difficulty before you can pay off your hardware expenses.

Because you can sell the risk to suckers in the form of fixed MH mining bonds.

I agree with this. It also means you get to pay off your mining gear with other peoples money.

you are a complete and utter scumbag.

Remember when you put "Pirate is not a Ponzi" in your signature to make newish users think the Pirate scam was a legitimate investment so you could perpetuate it a bit longer?  

do you feel bad about doing that?



edit: see BurtW still rubbing salt in the wounds of his Pirate victims to this day:  https://bitcointalk.org/index.php?topic=97094.msg1178786#msg1178786

Puzzle out why a bank might pay you interest on the money you deposit on account with them. Now reflect that answer back to the pre-FDIC days. Is your answer still valid? If so, I'm guessing you have your answer as to why Patrick would pay interest to his depositors. (hint: it optimizes his personal TVM)

I remain keenly interested in your reply to BurtW's question explicitly addressed to you. Is there any single economic activity you would deem rational for someone who is long bitcoin?

Sorry, which question was that?

Probably just about anything that doesn't promise impossible returns. Holding bitcoins can certainly be rational. Investing in mining can certainly be rational.

I probably should have bolded the "can". Obviously, you have to make a careful evaluation of whether the person trusted with your money deserves that trust. And mining will always be risky. Generally speaking, IMO, buying bitcoins and holding them is usually better than buying mining gear and mining with it.

Holding, it may be argued, is not an economic activity, as it does not result in trade involving bitcoins. While it stretches the point, the same could be said of mining.

Perhaps you missed the post, or the points therein, in his post: https://bitcointalk.org/index.php?topic=92279.msg1170475#msg1170475

But more to the point, the returns PatrickHarnett is making are clearly not impossible. The Lending forum is replete with records of such returns. You could argue that you don't think such a biz could scale, and you could argue that in your opinion, it does not make sense to expand such a biz using others' capital. But that would be projecting your internal bias upon others' reality.

Nah, you proved its clearly better to have them in a BCST account. Im so jealous of those returns you are still getting:
https://bitcointalk.org/index.php?topic=97094.msg1157225#msg1157225

I make plenty of money off of speculation. Daytrading/swingtrading on the exchanges is easy as long as you don't let emotion get in the way and set clear entrance and exit points.

Still risky, but way less so than throwing money away with ponzi schemes.

First, I reject the validity of the term "hoarding". It's a loaded term largely based on primitive and discredited economic theories. If you want to argue it, we can do that, but I'd prefer we use a neutral term like "holding" or "saving".

In any event, it's not that simple as "better" or "worse". Investment strategies have to balance risk and reward and have to fit into other investments. If you think Bitcoin will be worth significantly more in two years than it is today, you likely can't do better than holding them.

And, of course, there are lots of real businesses with real business activity that might be a sensible investment.

You should check again, and factor in all the defaulted loans that ended up in pirate accounts, pirate passthroughs, insurance companies insuring pirate debt and other lending pyramids that ultimately usually ended up with pirate, or some other soon to default ponzi scam.

The reality is that there is very little real economic growth going on that could produce these returns. People are borrowing far more to gamble or scam. They may accept high %, but a far higher % will never pay back.

So its easy to get these returns on paper as long as you naively assume almost everyone will pay you back, but the reality is likely a whole lot different. I will be very curious to see how much of his loans Patrick will be able to recover, considering how many of the people he totally trusted have already defaulted and/or are now branded as scammers.

Patrick scammed himself, unfortunately.

Depends. If he pays his creditors out of his own pocket for the losses Im sure he will suffer, then yes. Otherwise, not really.

Did you factor in your losses from Pirate into your 1.5% net return?
Obviously in lending defaults are subtracted from the gross return.  A bank offering a 7% APR car loan isn't expecting to make 7% APR.  Between their transactions costs, other labor, defaults, repossesion costs, fraud, etc they probably are shooting for a ~5% return on capital (slightly more than inflation).   The bank doesn't make any more on CC or car loans, than say mortgages.  Priced right the costs and losses factored into each product generate the same net return.

1.5% per week after defaults, labor, losses, etc simply doesn't exist.   If it did exist the supply of coins would drive down rates to the point it didn't exist.  That is how markets work.

So take your gross return subtract your 10K Pirate loss (and other defaults) and tell me again you are making 1.5% per week.

Lending however no real business is going to take loans at 200%+ APR. 

We have borrowed a line of Credit at 0.5% per week.  Our creditors have enjoyed a return on their capital.  Even 0.5% per week is kinda unrealistic but given all the Pirate nonsesne and unrealistic demands of creditors we had to go that high to compete.  When we renegotiate it likely will be lower.

In our business we can use the LoC to allow instant trades without tying up our capital or being long huge amount of BTC.  The cost we pay in interest is worth the utility we gain.  At "asinine" interest rates the utility isn't worth the interest.

Tangible Cryptography LLC ;)

Then again we didn't offer 7% per week sucker rates so you likely missed the offering.

That wasn't my point.  My point is that even if you use your own money and lend @ 1.5% per week you aren't going to NET 1.5% per week.  The higher the interest rate the worse the customer you will attract.  At 1.5% per week you are essentially only attracting bums, scammers, and people very bad at math.  You would be lucky to have a positive net return at all. 

What a brick-n-mortar bank can make is irrelevant in bitcoin world, if only due to the fractional-reserve nature of their currency. As far as gross, as figured from a return on reserves, that 7% loan results in much more than 7% revenue. Nine out of every ten dollars they loan you does not exist before the loan is made. They don't truly 'loan' you their reserves. The vast majority of the money they loan you is zapped into existence by the very act of loaning it to you.

As such, they gross much more than 7% on _their_ money when they loan you at 7%. And that's before charging you loan origination costs.

Way to miss the point.

ANY LENDER ON ANY CURRENCY DOESN'T REALISTICLY EXPECT TO PROFIT 100% OF THE INTEREST CHARGED.

So just because there are loans @ 1.5% per week and just because some of them pay back on time doesn't mean 1.5% per week on capital loaned is sustainable or realistic.  
Any lender will experience default losses and those losses will reduce the net return.

Taditional banks.
Finance companies.
Payday lenders.
Bail Bondsman.
Bitcoin lender.

It doesn't really matter.  

Looking at the gross rate on the lending forum is naive.  Take a look at all the defaults.  Take all the amounts loaned, and all the repayments.  Be sure to factor in late/defaulted loans repaid over longer period sometimes without interest.   The net return for all lenders collectively isn't 217% APR.  Hell it probably isn't even a positive number.

Not without it looking like I was suggesting people invest in it, which I'm not willing to do. But I will say that none of those businesses, even the ones related to Bitcoin, can take bitcoins as an investment in any way other than selling them for USD. You can invest in bitcoins, but there aren't really any sensible investments denominated in bitcoins to my knowledge. The currency is just too volatile right now.

spend it like a normal currency

Well, except you can probably trust people who like big butts. Because they can not lie.

Instantly, the answer appears.

If that is directed to me, I realize this. However, this is irrelevant. If a lender can regularly loan at some percentage interest, he can pay some lesser value to his creditors, absorb some level of defaults, and still make some profit.

Are you claiming you know the finiacials of each lender? Or even of only Patrick, who is being publicly pilloried here in this thread?



The only such events germane to this discussion are the ones Patrick experiences.


Speculative statement noted.

jbreher, I will answer your question and then leave you to your delusions.

You cited the interest rates in the lending forum as "proof" that 1.5% per week NET is achievable.  It isn't.  Hell credit card companies or PayDay loan companies don't make that kind of return on capital.  I was just pointing out that just because there are loans in the lending forum at x% per week doesn't mean one can borrow at 1.5% per week and issue loan in excess of that, cover costs, defaults, and still be profitable.

Even if that was possible under normal circumstances (which it isn't according to free market theory) the Pirate situation will destroy any chance of profitability.   What is better than 7% return per week?  How about infinite return per week.  Borrow at x% and deposit it with Pirate @ 7%.  As long as Pirate pays collect the difference.  If/when Pirate defaults just walk away.

Even if a court recognized bitcoin debts they certainly wouldn't recognize usurious bitcoin debts.  If anything they would strike them dawn as unlawful and noncollectable.  A business model built around charging people 300%+ APR on an uncollectable debt is doomed to failure.

Patrick may make his depositors whole, but will only be because he eats the loss himself.

Thank you, O Magnanimous One.

As the rest of your post was mere repetition of your unsupported assertions, I will reply also with repetition - but of a question, not an assertion. To wit:

Are you claiming you know the finiacials of each lender? Or even of only Patrick, who is being publicly pilloried here in this thread?

EDIT: s/TWo/To/

I think that's right.

My thoughts (not that anyone asked):

1. WifeOfStarfish reads like a sockpuppet to me. If I were Patrick, I'd not want to show this to anyone.

2. Joel offered the choice that Patrick is a scammer himself or an idiot, but I'd like to offer a marginally kinder alternative, which I think is the truth: he was duped.

If one really believed in Pirate, one would invest almost every scrap of liquidity in him. That doesn't make him an idiot so much as a mark--very smart people can fall for scams. Cult members have higher than average intelligence. It just happens that some people fall for certain stories. Patrick is also a believer in Bitcoin, and he perhaps he wanted to do his best to foster the supposed bitcoin economy. Given the apparent demand for lending and the apparent market for deposits that were supposedly safe from Pirate exposure, perhaps Patrick can up with the idea for Starfish BS. He might have even done what he thought was the honorable thing by putting his own faith in Pirate, and giving the alleged depositors a pure "non-Pirate" opportunity.

If my theory is right, he's a double victim--first from Pirate, and second from many of the borrowers who were unsurprisingly only paying high rates to scam/gamble/invest in Pirate (same difference). The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the former latter, especially if he tries to spread the loses evenly, I'm not sure I could fault him.

Do you mean if he does the latter?  If he does the former, there is no spreading of losses.

Did Harnett default yet? I notice his "wife" hasn't had much to say lately.

quoting this before its deleted. Subtract hashkings 1000BTC and Patrick is already in trouble.

Yes. Sorry.

I don't think it's unreasonable for everyone to take a haircut.

But Patrick is still paying out in full. Unless he still plans on doing that for everyone, that seems unfair.

If you continue to be duped while many people are clearly and patiently explaining to you why and how you are being duped, that's straying into idiot territory.

Considering that he could probably run away with everyone's money, claim that it was all lost, and little to nothing would happen, I agree that it's hard to find too much additional fault. It's not like the people who loaned money to him weren't also warned that he was operating with a business model that was vulnerable to default and there were specific warnings that everyone had much more Pirate exposure than they thought they did.

From the point of view of the community, it won't help to have Patrick suffer more. However, if his depositors all suffer at least a bit, that will likely help the community a lot.

Well, this has taught me alot. I want to thank everyone for their input.

I, myself, just got food poisoning from a Chicken Shack type of place, that people warned me to NOT eat at.

With the knowledge gained in threads such as these, today I will be going after the guy that was dressed up in the Chicken Suit in front of the shop, with the advertising sign on....as this is obviously not a waste of time, versus going after the shop itself, right ?

http://copelandcommunications.files.wordpress.com/2011/06/07725174332_chicken-suit-sentence.jpg?w=490

Thanks guys. I appreciate all of the tips learned here.


Let this be a lesson to Chicken Suit advertising guys everywhere..... I AM COMING FOR YOU.

http://static5.businessinsider.com/image/5006f45869bedd1449000006/chicken-suit-punishment.gif

If you start to adjust your hypothetical to match the situation, the conclusion becomes quite the reverse. For example, have the guy in the chicken suit broker the deal taking a cut of your money in the process. Or have the guy in the chicken suit promise to insure you against the very harm that materialized. Or have the guy in the chicken suit state that he has secret reasons to suspect the food is actually safe.

The Chicken Suit guy profited none the less. I took a coupon from him, for which he gets a flat rate bonus for each one taken/used, along with his hourly rate for advertising inside the suit.

Merely getting a profit is not enough. CSG would not be responsible in your hypothetical. It would be a closer case if he brokered the deal.

I agree that you do need all the elements that are present here. You can't just take one of them and try to make the same argument.

I agree. And trying to cause further panic to create an even worse run on  the bank is also unfair.

Yeah, that's madness. Best thing to do is payback everyone pro rata now and set dates in the future for additional payments when/if loans are returned.

Of course this is assuming he was really duped and lost his personal money with Pirate before realizing his own lending was in significant risk (which is in doubt, as Joel points out).

WifeofStarfish was visiting her father the past few days - sorry, she's not a sockpuppet, but I don't think she'll be jousting with the trolls much.

I've had some loan repayments come in, and will be setting up a batch of pro-rata payments today.  yes, there are a bunch of cascade defaults occurring, and there is a healthy balance of people that have asked for their deposits returned. 

If it were me, I'd ignore withdrawal requests after default was announced and make pro-rata payments as repayments come in. I don't see anything wrong with splitting your losses with your depositors. Their decision to invest was just as bad as your decision to offer the service.

mostly agree, although it would be good to know who defaulted and for how much. If you are going to pass losses on to investors, its only fair they know (and can verify) who they owe the loss to.

I agree. If losses are being passed on, then the depositors deserve a full statement of total obligations, total assets, the form of those assets, and any defaults that are being passed on. This serves two important purposes. First, it lets depositors know what they can reasonably expect. Second, it reassures depositors that they are not being scammed and in fact suffered legitimate losses.

You're a sad person

Obvious meat puppet.

blah blah blah - trolls are getting old and rather uninteresting

I was advised recently (last hour or so) that I now have an imposter on IRC.  that's getting really sad - I hope whoever it is has a real life

Patrick, is this your real wife?

If yes, please confirm (and welcome to the forums WifeOfPatrick), otherwise, please ask mods to label the account as a scammer.

Bitcointalk seems to be having some problem lately - I have been missing email updates on threads I'm subscribed to.
I haven't heard anything about this thread for months, and there seems to be quite a debate going on. Filed a bug report (https://bitcointalk.org/index.php?topic=109372.0).

Do you assume Patrick commands his wife and she obeys?
Is there a possibility that she ... I don't know ... has a mind of her own?


Why do you think you should "zip it"?
After reading the messages from the past few weeks, I assume you really are wife of Patrick. You shouldn't feel the need to cower before the ignorant masses of bitcointalk - speak your honest mind, have no fear of misinterpretation.

Despite withdrawing some funds lately (Patrick can privately explain to you why), I still fully trust him, and I hope he can lead and revive the legitimate lending business (with saner interest rates).


Added JoelKatz to my ignore list. I've been aware of the existence of the profile WifeOfStarfish for exactly 10 minutes now, and already her opinion is more valuable to me than all your future posts (I trust her by association).


WifeOfStarfish, it's a good thing you haven't dealt with Pirateat40 then.



OK, that's enough catching up to do, I see other people have joined the thread, but I don't want to waste anymore time on trolling ... just wanted to give props to WifeOfStarfish and to Patrick, and send this nice unrelated song that might cheer you up.

http://www.youtube.com/watch?v=K-QKFbNU2CY

Actually, WifeofStarfish doesn't need to defend me or my business, and she wasn't attacking people like the crap that's been thrown at her for attempting to be civil.  It's not necessary for her to explain, and my previous attempts to explain have been ignored or deliberately misconstrued.  AND pull your arse out of your ears, I haven't been taking deposits for weeks (demonstrating the trolls are not interested in what is actually going on).

So let's stop feeding them.

http://www.freewebs.com/calitorial/Don__t_feed_the_Troll.jpg

she wasnt a bit civil so lets not pretend here ,joel asking the same questions were responded to with inults and personal attacks
go back and read them if you dont believe it

if you cant handle a few simple questions then your simply not fit to be holding deposits of other peoples coin

now your resorting to rudeness and insults so your not any better than meat puppet in arguing your case

It's worth reading this thread all over again, after seeing how things turned out (https://bitcointalk.org/index.php?topic=124152.msg1339242#msg1339242).

First place I came after finding out he got a scammer tag.  I rate this thread AAA+

Just came back to collect on my big fat "I told you so."



I told you so. (That felt great)

You're welcome.

I rate this AAA+.   Nah you get the first AAAA+^(3.14E27) The title of the thread would be so hilarious if hundreds of people hadn't pissed away thousands as idiots.

This thread is now hilarious.

Yep. I'm embarassed to be poster #2. I sketched out with my bitcoins before everything imploded, but I still considered Harnett to be trustworthy. The fact that I have my bitcoins right now is mostly due luck, and a gnawing sense of general distrust I developed. If there's one lesson I've learned on this forum, it's this: don't trust anyone. It's said so often but it really can't be said enough. And I really don't trust anyone anymore, except for certain people in very short time-frames. If you ever think you're being too paranoid, you're probably not being paranoid enough.  It's a lesson that some have to learn the hard way--unfortunately, some only accumulate enough wealth in one lifetime to be worth screwing over exactly once. This is the horror of financial fraud. I'm sure there are people on this forum who's lives have been devastated because of their poor judgement with bitcoins. Maybe I deserve to have lost my bitcoins. However, I'd say that nobody deserves to be scammed. Just because My house isn't 100% secure doesn't mean I deserve to be robbed.

OMG this is hilarious!  :D :D :D

Since Patrick is now in default, and got a scammer tag, this thread is now defunct (renamed).

For what it's worth, I believe Patrick wasn't an intentional scammer, just made some bad decisions in a bad situation ... but I don't really know. I've been out of touch with the lending scene in the last few months.

Too bad both for Patrick and people he owes money to.

So a "real life" = "being a scammer"?

lol  :D

That's kind of the problem though.  You need to be able to trust people to do the right thing under the worst case scenario.  Doing the right thing is easy when everything is going well and you're making money hand over fist.  Doing the right thing by others even when you've personally sustained major losses is a greater challenge for many people.

Yeah, well put.

Exactly so. I need a ^ Repentance card.

We know of at least one person (slush) who did exactly this: the right thing by others even when he personally sustained major losses.

It should also be noted that Coblee paid back his ltc pirate pass through investors immediately after it hit the fan. He has taken the full loss himself even though he didn't owe it and through a storm of 'told you sos'. Now thats real integrity in the face of adversity. Top guy (and I'm not just saying that as I'm an LTC fanboy)  ;D

That's a bit too good IMO.
Some people try so hard to "do the right thing" even at their own expense that they end up hurting themselves and their loved ones.

If someone bought a passthrough from X, X is only responsible in case pirate does not default. Doing anything extra is charity ... fine if you can afford it, but certainly shouldn't be expected.

I don't agree. If I help you hire a hit man to kill your boss, am I only responsible if the hit man fails to kill your boss?

People who operated pirate passthroughs paid Pirate to make their customers the recipients of fraudulent transfers. They are responsible to the victims even if Pirate did exactly what they paid him to do. (This requires that they knew or should have known that Pirate was making fraudulent transfers. I think it was totally obvious all along, but I'm willing to accept that this one time people might have thought it would somehow be different. But if this ever happens again, you can expect zero tolerance from me.)

There is no excuse for those who publicly stated that they knew or suspected that Pirate was operating a fraudulent Ponzi scheme yet nevertheless operated passthroughs --  knowingly and intentionally paying Pirate to commit fraud on their, and their customers', behalf and profiting from it, they are no better than Pirate.

So someone starts a passthrough, they are responsible just as much as pirate but those who invest in said passthrough are not? what sense does that make? at least be consistent

Someone who starts a pass-through is risking other people's money, not their own - we generally hold people dealing with other people's money more accountable than people risking their own funds even if the "investment" involved is stupidly high risk.

I never said passthrough operators were "responsible just as much as pirate", nor did I ever say that "those who invest in said passthrough are not". (At least, I hope I didn't say either of those two things.)

Marked and credited (if, as seems likely, he liquidated his clients' money to bail out his own bad Pirate debt). I don't think he intended to scam people a year ago, and so maybe he's a tragic figure for actually believing Pirate, but the tag seems well-earned now. Too bad.

Wonder if we hear from "wife of starfish" again.

I propose a new tag for some members that is awarded to people who detect scammers ponzis and cons and intelligently argue the case long before the scam folds.  For people who receive mounds of abuse from said scammers and their shills but just keep selflessly plugging away.  Why?  I don't know.

Tag: "Bitcoin Defender"

First awardee:  JoelKatz

1. No.

2. JoelKatz is something best approximated as nil. There's other people who actually do what you claim your tag is for.

Coming from someone who funded a Ponzi scheme and takes no responsibility whatsoever for the harm they did while placing all the blame 100% on others who did precisely the same thing, I'll take this as a compliment. For the record, I don't think you had actual knowledge that this is what you were doing, but you should have known.

While I've got your attention, I have a few questions for you:

1) When you loaned money to Patrick, did you know Pirate was operating a Ponzi scheme?

2) If not, should you have?

3) When you loaned money to Patrick, did you know a significant fraction of it would wind up invested in Pirate?

4) If not, should you have?

I don't know what your issue is with JK, but it is clear you have one.  Try and rise above whatever spat I'm sure I'll find if I bothered to search the forums.

For the rest of you, reread this thread; it is clear he called Harnett out and did so in a reasoned responsible manner.  There are other people who called Pirate out and deserve the "Bitcoin Defender" tag: Vanderoy for instance.

Disclosure: I have made no investments, deals, PMs etc, with Harnett or JoelKatz and know them only through what I read in these forums.

Or if you had bothered to even read the thread on which you're dumping your "thoughts", such as they are.

Or the thread (https://bitcointalk.org/index.php?topic=50822.msg854918#msg854918) where I pointed out Pirate is a scam at a time nobody else was doing it.

Or in general if you had a clue about fucking anything. As for instance the fact that had I not called the scammer out with proof JoelKatz would be yammering about nothing in particular to no effect whatsoever to this day.

You don't waltz in trying to pass Katz as valuable on the grounds that he has been sprouting idiocy starting September, when Pirate blew in August and I called it in April. You don't waltz in here trying to pass nobody as important when other people's money and other people's skill was involved in delivering the results. Gtfo.

Thank you for answering questions 1 and 2. Now, how about questions 3 and 4? Here they are again:

3) When you invested with Patrick, did you know that a significant fraction of your money would wind up invested with Pirate, which you knew was a Ponzi scheme?

4) If not, should you have?

And I'll add one more:

5) Do you believe this is due to something specific Patrick did wrong that you had no way of knowing? That is, do you think he just failed to screen people thoroughly or didn't ask the right questions? Or do you think Patrick's business model, which you agreed protected from significant Pirate exposure, was fundamentally broken?

I'm just asking you to take some responsibility for the bad decision you made and the harm it did to others. (Or would have done to them, had they been honest. As it happens, the victims of your bad judgment just turned around and reneged on their obligations.)

I second this. What set JoelKatz apart (especially when the scams became obvious) is how articulate and measured he was, even as folks started shrieking at him. People who can't keep their cool might be right in the end, but they're not very helpful.

Light/heat ratio of JoelKatz is excellent.

Not only are Joel Katz's opinions are well articulated, they are also subject to change. To me, that is the defining trait of a wise and learned man.

No homo...

I lolled.