I wonder how intertwined are the various long-term deposit takers? Spreading out deposits in an attempt to spread risk could turn out to have been a big waste of time.
Under these circumstances, it seems that it was plain impossible any diversification. Unlimited greed drove everything to the same place: the big black btc hole... |
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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. 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. 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... 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?
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...  |
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I am most certainly a noob who just invested all my money in pirate.
The lesson to learn here, then, and the first step to leave your "noobness" behind would be: Never put ALL your anything in any single place.
Edit: Ok, I'm just realizing the sarcasm...  Anyway, the post stands, addressed to the real noobs out there...  |
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So, really... Did pirate just run away and disappear? Is that really what happened?
People are realising the joys of irreversible transactions! |
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Three words : the long con.
Mark my words.
Marked |
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September 3 UPDATE
Dividend/unit paid: 0.0000882BTC/unit
Total dividend paid: 0.6432426BTC (0.3015558 to remaining BDK-holders, 0.3416868BTC to those who have transferred)
Running total dividends paid in September: 0.6432426BTC
(BDK units outstanding = 7293 [8378-300-785])
For those wanting BTC, this is straight-forward, and I'll run through and apply the balance changes in the next post. For those wanting BDK.BND, this is more tricky -- basically, as I see it, since I claim BDK.BND is ~7.3% less valuable than BTC, those requesting BDK.BND should receive 107.3% of dividends, or 0.0000946386BTC/unit worth of BDK.BND. (Ugh, 6am math - what the Hell am I doing?)
So... say you're the fellow with 2036 BDK looking for BDK.BND. Each unit of BDK is worth .135 when converted to BDK.BND, right? Well, with dividends, now it's effectively worth 0.1350946386BTC/unit. Instead of receiving 2749 units of BDK.BND, he should now receive (1.350946386*2036) = 2751 units of BDK.BND.
God, that was terrible. This is a trivial waste of time. Alright -- next week, when the exchanges to BDK.BND have been complete, I'll throw in a few extra BTC of dividends and that should more-or-less cover the insignificant dividend y'all missed this week. For those who wanted BTC, the revised amounts are:
500 BDK -> 62.5441BTC (BDK has been transferred in)
150 BDK -> 18.76323BTC (BDK has been transferred in)
Why don't you just send BTC for the dividends after (or before) you send the bonds? Also, will we receive the BDK.BND interest paid today when you clear the transfers? |
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Good news and bad news. First the good news.
And what would be the bad news?  lol Ok, got it. |
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Good news and bad news. First the good news.
And what would be the bad news? |
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What will happen if the insurance is paid and P' eventually does pay out , lets say in 2 weeks?
Will there be any way to pay the difference?
No. I have had this question already and considered it. There are many reasons why the answer is "no" and not many why it should or could be yes. When I was pondering this issue again today I did think that you might be able to provide evidence from a GLBSE account that you were subject of the buy-back, but normally insurances don't pay out twice. Also, if P does eventually pay out, it might not be at full 1.28 value so any payment would be discretionary. Worth checking if/when it happens. If you do a buyback for 0.32 then ofc all the info is gone concerning who had what. Possibly you could give 0.32 as a dividend and IF P' does eventually payout something - buyback the bonds accordingly. Not doing it in is some way would give you a very nice profit at the expense of your clients and you arent that type of person. I know it's a mess as far as the contracts and stuff but we are in an unusual situation. Or you can put bid walls @0.32, so those who want the liquid btc of the insurance now can sell, knowingly losing the rest if pirate finally pays out. And those who prefer waiting can keep their bonds, hoping for the buy back. That's how usagi is handling YARR... |
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then I propose a tag something like "Don't trust with money", which doesn't necessarily entail scamming, just that at the very least this person has been negligent in some way.
"Incompetent" Irresponsible. |
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Yo creo que justamente este debe ser el gran negocio tan rentable que se ha montado el pirata: ¡La venta de pochoclos! |
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So what you're saying is that pirate can pay it back but bitcoin will plummet in value...
I don't know if pirate can pay back. With the information available today to everybody, that's in fact just a matter of faith. If pirate was legit and he really had such a great business which gave him such great profits, he may be able to pay. But even if this is the case, I think that the repayment process certainly will not be easy and it could be really risky anyway. So investers will have their ammount of bitcoin back but it wil be worth less than before.
Maybe. If he really repays everybody, we certainly will have a sudden flood of liquidity which will have some inflationary and devaluatory consequences in the short term. The long term would depend on how the markets take the changes on the interest rate... I hope that everything turns more stable, it doesn't matter that much if it's higher or lower... Its only theoretically possible to continuously pay at continuously decreasing rates. If you owe more bitcoins than exist, then its not possible to repay it all at once, or to repay it ever. Not possible, not even in theory.
It certainly won't be easy. But given some extremely extraordinary circumstances, I think it could be possible... Anyway, this is not the case we have now. |
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Theoretically you can owe an unlimited number of btc, even more than will ever be in existence, and you still could be able to pay your debt. As long as you have enough backup assets, an some control over the flows, it could be possible...
What you cannot do in such a case is repay ALL your debt at once, but you could start a successful repayment process, because as you start paying, some of the flow of capital you were holding is going to find it's way to the exchanges, in pursuit of realizing a profit. If you're also there, offering the realized profit for other goods, you'll recover some of the bitcoins you just has left, and you can continue the payment process with those same bitcoins...
Now. I'm not saying that pirate will be able to do this. I'm just saying that this is theoretically possible...
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Better to buy some put options, so you don't depress the price by selling now, but help it staying higher than the strike.
Who's providing that service? Are they insured? and bitcoinopx are the ones I know of. I don't know if they're insured or how trustworthy you can find them... I trusted some coins to the former and I'm still researching the latter... The information about the provider of the options in Mpex is sparse. To say the least. bitcoinopx.com seems down - which is also not a good sign. icbit.se is what I recommend they sell futures  //DeaDTerra Has a more professional look. But - no terms and other red flags.. Heck I don't even know with whom I'm trading online. (Next bitcoinica?) Yes, I forgot about icbit... Anyway, as in any investment, it's a matter of diversifying to balance the associated risks. Just selling the coins immediately to avoid currency risk depresses the price and leaves you exposed to a rebound, so you get exposed to a currency risk in the opposed direction... If you hedge by buying derivatives (options or futures) you are contributing to stabilize the price but you get exposed to counterparty risk. That's just the way it is, you'll always be exposed to risks when you manage some capital... So, there's no other options than lowering the risks by diversifying. But just selling the coins right now, just in case, as has been proposed is, IMO, the worst option... |
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Better to buy some put options, so you don't depress the price by selling now, but help it staying higher than the strike.
Who's providing that service? Are they insured? and bitcoinopx are the ones I know of. I don't know if they're insured or how trustworthy you can find them... I trusted some coins to the former and I'm still researching the latter... |
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The answer was in this very thread I will release the code for p2pmining at the end of the month (as soon as I go down to Chicago to get my backup) if anyone wants to implement it. If someone wants to donate a server, I could set it up. If you just wanted to do bitcoin and namecoin merged mning, a VPS would work.
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Massively Merged Mining: http://p2pool.knotwork.com:10332Halifax Nova Scotia::Canada::p2pool.knotwork.com:10332::0%::BTC,NMC,DVC,GRP,I0C,IXC,CLC::Massively Merged Mining::MarkM (knotwork) I have set commission to ZERO so that all the bitcoins mined will go out to the miners automatically. That means how much each miner contributed will be recorded in the bitcoin blockchain; altcoin awards can then be computed from that data. -MarkM- So, do you intend to pay out also the altcoins, proportionally? That would be really nice... |
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Jaycoin said that he was open sourcing p2pmining's code. You can use it for your needs.
p2pmining.com is looking like a dead/abandoned site to my browser... -MarkM- Yes, it was hacked and emptied. But it had the functionality that you need already working. Check this thread. |
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I have been using p2pool to merged mine many chains at once for a long time now, it works fine for me personally however I am not at all sure how or where to find statistics about third party miners so that I can calculate appropriate payoffs for them.
Since the objective is to be able to give them choices about which type of coins they get paid in, I have commission set to 100% to prevent them getting automatic payments in bitcoins.
Looking through the browser interface I see some graphs but don't seem to be able find any clear summaries of how many shares or how much hashing or somesuch that each miner has contributed, nor any way to clear a miner's total on paying them in order to start accumulating a new work-total toward a future payment.
-MarkM-
Functionality to do this is not built in. You'll have to write custom code to do that yourself (as p2pmining.com did). Jaycoin said that he was open sourcing p2pmining's code. You can use it for your needs. I have been asked how p2pool knows how to pay third party miners who connect to it, and neither the wiki page nr the github page seems to say how that is done. I took a wild ass guess that its done by using a bitcoin address as username but is that correct?
-MarkM-
Correct. |
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