Can you clarify what precisely you are buying? Are you buying just the rights to any future payout? Or are you buying the rights to damages from defaults to date as well? There's a huge difference between these two things, and the latter is likely worth much more than the former.

Say I have a 50,000 BTC Pirate debt that I sell to you for 5,000 BTC. If it is proven that Pirate is a scammer, who has the right to sue Pirate for the 45,000 BTC loss in value -- you or me? If it's you, you are buying more than just the debt.

Also, will you state unequivocally that you are not conspiring with Pirate in any way and that the sale is revocable and the debt returnable to the seller should the contrary ever be established? Also, if you are conspiring with Pirate, making this offer is Pirate defaulting. (Taking the agreement off the table and putting a lesser agreement on the table alone is a default of the original agreement.)

In other words, everyone associated knew, or should have known, that it was a scam. That means the operators knew, or should have known, that they were participating in a scam.

You're missing the point. The point is not what happened to the money they paid Pirate, the point is what they paid Pirate to do. The fact is, they knowingly paid Pirate to transfer funds to them that they knew, or should have known, were obtained from others on the fraudulent promise (credible or not, believed or not) that they would be legitimately invested, knowing that such a transfer is in no way a legitimate investment.

(Again, I am not pointing blame at any specific people. I'm just refuting the argument that people who funnel money into Ponzi schemes are blameless for doing so because the blame instead rests with others. Also, you should pick just one of "I didn't know what I was getting into" or "Everyone knew what they were getting into". You can't argue both at the same time.)

I'm curious if you would indulge me in a small favor. Would you, please, estimate for me what you think the odds are of this happening? I'd like to gauge the extent to which you are connected with reality so that I can tune my responses accordingly.

I don't know enough about the specifics to point blame at any particular people, but I find it really hard to imagine anyone could have been running a PPT and not be either aware of, or willfully blind to, the near certainty that they were paying Pirate to transfer to them money that other people were induced to transfer to him in the belief that it would be invested, and that transferring that money to them was not in fact an investment. In my opinion, that makes them scammers.

And no disclaimers would eliminate this, because the issue is not how they collected their funds but what they paid Pirate to do.

Again, I don't know enough about the facts of any specific situation to point blame at any particular people. I am not saying that any particular person is a scammer.

One of the most horrible things about Ponzi schemes is that they promise free money in way that turns honest people into scammers. Pirate cleverly tricked you into being a scammer.

Then you are a scammer. You knowingly paid Pirate to fraudulently transfer other people's money to you without their consent.

That's not the issue. It's not what Pirate did with your money, it's what you paid him to do.

Okay, so you knowingly participated in a scam. You are a scammer.

Right, so you knew it was a scam.

Umm, how do you figure? You don't agree that they paid Pirate to fraudulently transfer other people's money to them?

Because they knowingly participated in a scam and tried to profit from it. Duh.

You are a scammer because you knowingly participated in a scam, paying Pirate to make you the beneficiary of fraudulent transfers of other people's money. Sorry, but that's the truth.

True or false: Pirate induced people to invest in him by claiming to have an actual business that turned a legitimate profit. You knew, however, that he was probably using new investments to pay off interest on previous investments. You knew or should have known that by investing with Pirate, you were in fact paying him to transfer some of those funds that others were lead to believe would be invested to you, which is in no way an investment of those funds.

How can you say that doesn't make you a scammer? How long until reality sinks in and the cognitive dissonance stops?

If you hire a hit man to kill your boss, you ought only to blame yourself. But everyone else can blame the hitman too.

If you invested in Pirate, you probably deserve some blame. If you encouraged others to invest in Pirate, you probably deserve some blame. If you lied a "white lie" to help people invest in something you thought would really help them but should have known was a Ponzi scheme, you deserve some blame. Etcetera.

So long as there's no shortage of supply of ASICs, it stands to reason that they will keep selling until they raise the difficulty to the point where they no longer provide an attractive ROI. (Of course, you have to factor in risk, and there's lots of that because of difficulty changes and exchange rate changes.)

To help you further bury your knowledge that it was a Ponzi scheme. To help you later deny "really knowing" it was a Ponzi scheme. And for a variety of non-rational reasons.

To help avoid losing significant BTC on your bonds. To help you convince yourself that your money was safe, which is what you wanted to believe. And for a variety of non-rational reasons.

It is really astonishing how Ponzi schemes make people think and act. People who know it's a Ponzi scheme will lie about the scheme to friends and family to get them to invest and will convince themselves that they're helping them. It's pretty stunning really .. and sad. You've been reading the forums. You know how it is.

People who have money in a Ponzi scheme often maintain a kind of split personality where to some extent they know for sure it's a Ponzi scheme and to some extent they hope it isn't and can act like they don't know it is. It's quite strange and makes otherwise reasonable people do the very strangest things.

You know something. But you think it's in your interest not to know it. So you convince yourself you're not really sure. But deep down, you are sure. But you have a kind of plausible deniability that you build up in your own mind. I'm sure a lot of people reading this are finding that it resonates, and I hope a lot of them don't like that in themselves and try to learn something from this mess.

Or double down. Whatever. It's up to each of you.

That's correct, that's why that can't happen. You need an economy where almost all productive action was impossible, yet there was enough production to sustain steep deflation. It can't really happen unless some coercive entity forces people to use an artificially deflating currency.

Right.

It won't be because constant, predictable deflation is impossible. It would require me to value 10 bitcoins today as worth less than 10 bitcoins in a year. But 10 bitcoins today *includes* the option to have 10 bitcoins in a year. So it must be worth at least as much (assuming the deflation is predictable).

I disagree. If the work actually produced a loss because it was a bad investment of resources, it should be discouraged.

By you buying those seeds, you prevent someone else from buying them, someone who could have made a larger profit. Or by buying those seeds, you steer the economy towards producing seeds rather than trucks.

If you can't outperform deflation (assuming the currency isn't being deflated by coercive manipulation) your action should be discouraged. Here's a case where your consumption should have been deferred to later, and deflation encouraged it. Just like it should.

We also don't know how much of his debt he himself holds. So some portion of his interest payments may have just been to himself.

What's the rest of the offer? What happens if he doesn't accept? If otherwise Pirate pays the whole 168k, of course he won't accept it. If otherwise Pirate pays nothing, of course he will accept it. (And, of course, making that offer would be considered defaulting. If I owe you $100 due today and I say "will you take $50" and you paying me the $100 as agreed isn't on the table, you've defaulted whether I take the $50 or not.)

AnCap is not "voluntary association with a state" because no single entity or hierarchical chain of entities has a socially-accepted, regional monopoly on drawing and enforcing the rules regulating the acceptable uses of force. If your association with the entity is voluntary, it has no regional monopoly on the acceptable use of force, so it's not a state.

The key difference between AnCap and other systems is that entities don't have socially-accepted regional monopolies on the accepted use of force. One of the ways people commonly try to refute AnCap systems is to show that they would inevitably soon result in such monopolies and thus AnCap is unstable. If such an argument were accepted, that would refute AnCap as a political system.

Ahh, I see what you're missing. If Pirate buys a PPT for 10,000 bitcoins, those 10,000 bitcoins pass right through to him. That's the whole point of a PPT. So long as he doesn't withdraw, the PPT will not withdraw, so that money will just earn interest as a number.

When it compounds to, say, 13,000 BTC, he can turn around and sells it for 6,000 bitcoins or so, he just made 6,000 bitcoins for nothing. Plus, while that 10,000-13,000 bitcoin PPT was outstanding, it makes him look bigger and helps build a market for PPTs.

It makes no sense for him to buy passthrough shares at distressed rates. He knows his debt is worthless, so why should he pay good money for it that comes out of his pocket?

I honestly don't think it will have any significant affect on the price of bitcoins, though other people disagree. It's certainly possible he thinks it will. Though in that case, I'm not sure why he wouldn't have been liquidating for the past month or so.

It's really this simple:

Every legitimate investment provides investors some way to reasonably assure themselves that their money was in fact invested in something that has a reasonable expectation of making a profit. Every legitimate investment provides investors a way to assure themselves that claimed profits were in fact earned from investments that actually turned a profit and that any claimed losses were in fact incurred by investments consistent with the fund's claimed investment strategy. Every legitimate investment provides a sufficiently detailed description of how funds will be invested to allow investors to make realistic assessments of risk. Risk is never just categorized as "high" or "low" but the specific risks are identified so that investors can make rational decisions about how to diversify their portfolio to manage excessive exposure to common risks.

In contrast, Ponzi schemes never provide investors with any way to know where their money is going. They never provide any way to establish the source of purported profits. There is never any way for investors to assess the level of risk, the specific risks, or the connection between those risks and the amounts their investment will lose. Ponzi schemes always promise absurdly high returns relative to risks and generally hand wave and give vague explanations of how those returns will be accomplished. A common claim is that the Ponzi operator knows some secret way to make money and that revealing it to others would ruin the opportunity.

Everything I've said above is backed by concrete evidence. I don't think anything there is really even remotely controversial. Now, all you have to do is take what you know about Pirate and match it up against those facts.

This is not rocket science. There is no missing evidence. Everything you need to reach a near certain conclusion is right in front of your eyes, you just stubbornly refuse to see it and claim that all this evidence somehow does not exist.

Can you provide evidence of this? Or will your investors just have to trust you when you tell them that their investments have dropped in value?

It doesn't matter when it was created. So long as he holds it and isn't selling it yet, it's not in the marketplace. He can benefit from it by selling it. The "existing owners of Pirate debt" may well be Pirate.

There are many reasons Pirate may have been acquiring his own debt. It costs him basically nothing. The money just flows back to him. He never pays any interest on debt he holds because he never withdraws. It helps to push up the price of his pass throughs. More demand suggests the market is more confident than it really is and more shares outstanding make the passthrough operators bigger Pirate enthusiasts. And, if he knew he was going to default by cutting off withdrawals abruptly and then stall on repayments, he'd know he could sell them for extra money.

If I were running a Ponzi scheme and had not one shred of honesty and only cared about personal profits, I'd do these things. So if Pirate isn't, he's either more honest or less clever.

I don't think there's any good way we can tell whether this is actually happening or not though.

That doesn't change anything. The argument still applies regardless of what the price does. The only thing the manipulator knows that nobody else knows is what he himself is doing. He still has to push the price up by buying higher than those not trying to manipulate the market or push the price down by selling lower than those not trying to manipulate the market. He still has no special advantage when he tries to buy at the inflated price or sell at the depressed price.

There's no way Pirate can pump Bitcoins though. It's not like he can cook Bitcoin's books. The only thing Pirate can know about Bitcoins that nobody else knows is what he himself is doing. And there are lots of people who are fundamental, long-term investors in Bitcoins who will buy them up every time there's a panic sell and when sell them any time there's a sudden buying rush.

Damn. I really am happy to admit my mistakes. Now I won't get the pleasure.

That's ridiculous. Borrowing at 3,600% is what would kill your business. Try as you might, you'll never make the numbers work that way.

There's no reason you have to borrow in the BTC economy unless something about your business requires it. Why would a rational businessman position himself to compete with Ponzi schemes over anything but the very shortest possible time frame?

Because that's not what legitimate businesses do. Ford doesn't advertise a sale where you drop money in a garbage can in the middle of the night and maybe they'll give you a car in a month.

Every legitimate investment provides investors with some way to know that their funds were actually legitimately invested in something that has a reasonable expectation of making a profit and provides them some way to know that claimed profits or losses were actually the result of legitimate investment activity and not manufactured. It provides an assessment of the risk factors that affect the investment and some way for the investor to at least begin to assess the level of risk.

It is immediately obvious why this rule is essential to investing. A person with a shred of integrity wouldn't even consider asking someone to invest without these basic safeties in place.