BEST case scenario: these higher-than-normal market rates are only possible because Bitcoin is still a developing economy, akin to a rapidly growing start-up company. Eventually it will slow down to the pace of the overall global economy. Once that starts to happen, rates will start to go down. At that point, you better hope people are comfortable with rate decreases, because one too many "investors" pulling their money out to go invest with someone paying slightly higher will result in a bank run.

Only way I can think of avoiding this is
1) DO NOT promise fixed rates, and get people used to them fluctuating based on your returns (even if they vary by 0.01%). Not only will this make it easier to lower rates if you have to, but the changes in the rate will at least give "investor" some signal as to how your business is going
2) Be open about your holding as much as you can. At the least, tell people how much you have in reserves v.s. how much you have lent out. This will at least give them an idea of how risky you are should a bank run occur.

^^^ This... is total bullshit. Bruce Wagner hasn't been involved with Bitcoin, or had any more shows with advertising, for almost a year now.

Can we PLEASE get back on topic? Which is:

BTCST is a SCAM! A ponzi, and a scam! SCAM SCAM SCAM SCAM SCAM! Pirate is stealing all your money, because he is running an impossible to sustain SCAM!

PONZI PONZI SCAM SCAM SCAM!

I think the irony is that this bet, which was initially started in an attempt to teach those who were overly vocal and eager to accuse something of being a scam, will end up showing that when a large group of people with possible knowledge of a topic warn you about it, you REALLY should listen, lest you lose out twice, first on being involved with the thing they warned you about, and second with trying to show you know better that those with actual knowledge/experience.

And regarding Chaang, if Pirate has the money to pay back -everyone-, then what can Chaang Noi possibly do to prevent that?

I think a more accurate picture would be the same diagram, but with text reading People who know math, People who know currency, and People who know investing, and with a third of a Bitcoin at the very far tip of each circle, as far away from the center as possible (so, 3 separate pieces of a Bitcoin), and the middle section should just have text saying "NOBODY, Except maybe Satoshi"

Same P. O. Box office?

Time not worth the $20USD I "lost."

Regarding reporting this to police, other than covering his butt and adding to their list of crimes, I just don't think police have the resources to track this theft down. If it's through an anonymous proxy, from Russia, and in a currency that's easily "mixed," there's really noting they can do. Not even sure the FBI would have the resources to track this down.

That's a typical Something Awefull tone. If you go to their forums, especially ones making fun of Bitcoin, they all sound like that. I call it sanctimonious butthurt tone, just to be more PC.

I'm actually a bit annoyed that Rarity has totally covered in troll crap what I thought was otherwise a legitimate question: can Dank actually keep his business going, considering the returns are rather high.

Who is holding your GLBSE securities?

Let's make Wallstreet shit their pants!

Millions of USD compared to trillions already out there is less than 2% a month, or about 30% a year inflation that Bitcoin is going through.

Why the crap are you still taking bet increases Matthew?


It's just as PC as being openly racist about Nazis. Overly sanctimonious, know-it-all, douchebag Nazis.

Let them bash him. Frustrated people who lost money need an outlet for their anger, and Roman admittedly deserves the scolding 

This is what happens when a group of IT people crashes into a wall of finance people. Some of those finance people are not very nice, and some of those IT people think they know more about finance/investing than they really do. Hopefully, in the end, everyone will learn something from all this.

A scammer vs. a dumbass.



No, because that is PinkiePie's birthday. A totally different holiday.

If I understand what happened correctly, the issue was not as much security related as just a dumb, careless mistake. I.e. this may have happened even on a very well secured system (though not to this extent if cold storage was used). Having this happen to an operator instills some really healthy paranoia, and changes their operating procedures, i.e. the human factor of security. Despite MtGox having vastly improved their technical security, we still don't really know if they have standard procedures that everyone must follow, and if they might not accidentally copy a wallet someplace unsafe while upgrading as well.

I do understand your point though, and mine does seem counterintuitive.

Unless you already have a whole lot of mining equipment, and are just feeling generous and allowing people to buy into your profits, the way that USD may come into play is if someone invests in you and you have to spend that investment on purchasing mining hardware. I'm assuming an extra $1,000USD worth of Bitcoin invested will require an extra $1,000USD worth of profit generating... something. You're right, the hardware can be bought with Bitcoin. But then the investment is still tied up in hardware. Depreciating hardware that may only be reselable in USD.

Also, I trust MtGox because it was previously hacked, and was forced to review its security procedures. Someone new may not care until they got hurt badly. Should it come back, I would trust Bitfloor more than other new exchanges (assuming their security policies we're also publicly scrutinized), because, like MtGox, they were forced to learn from mistakes and the owner knows just now much stupid oversights can cost him.

I don't think selling ownership of the company is a good idea. Loans or bonds may be a better way to go. Running the numbers, to borrow $260k for 15 years at 5% interest will cost $2,056 per month (extra $20k to get the infrastructure and security rebuilt). If Roman can't borrow that from a bank, it may be prudent to sell long-term bonds that pay out a dividends the sum of which equal to that monthly amount. Now, in bitcoinworld, a paltry 5% a year dividend may seem like crap, especially compared to 7% a week ponzis, AND there's a huge risk that this business may not survive for very long anyway (using personal bank accounts for deposits?), but the benefits are:

1) All the money needed to cover stolen BTC are raised immediately
2) Roman still takes a hit (punishment) by working for zero profit for a few months, until revenues exceed the dividend payouts.
3) Roman still retains ownership of the company, and has incentive in keeping it going, because
4) While the volume continues to grow, and Bitcoin continues to increase in value, the fixed ~$2,000 monthly payments remain the same, and become easier and easier to pay off, and once the business is established enough, Roman can start buying the bonds back early (though he may not have the incentive to do so).

Again, it's important to keep in mind that this business itself is risky, with plenty of competition and regulatory traps, and it's dealing with a risky currency, so 15 years (even with the hope that once Bitfloor revenues improve, it may turn into 2 to 5 years) may be hard for people to swallow. Especially since this is in computer years. We were using dial-up and Windows 95 15 years ago. Who knows where Bitcoin and our tech will be 15 years from now. But, if run well, a 5% a year bond is still a damn good investment in the real world.