The crazy person.

His magazine's forum rep isn't worth $100,000 either. I somehow doubt they have made $100k worth of sales from it yet, plus I doubt anyone who buys it online or at Barns & Unable will give a crap if one of the owners has a scammer tag on a forum full of trolls. If he does pay out, I'll be surprised. I'm not sure if that will make my opinion of him improve or not.

Same on Xoom. Piuk said he'll be releasing and update that fixes it soon.

Why do you say suicide is a problem?

I wasn't too skeptical about him paying out when the bets totaled about $10k to $20k, but my skepticism went way up when it his $100k. Honestly I hope he doesn't pay. His reputation is definitely not worth $100k, anyway, let alone $300k

FPGA = BFL singles


In that case you are speculating, or just gambling, on the hopes that you'll win and won't default. Not quite the same as earning money to pay back the loan. I hope the people who borrow from HYIPs aren't doing that  

BTW, ran the numbers for FPGAs, and with what's available now, they are even worse short term.

Well, let's check that.
Using info from https://en.bitcoin.it/wiki/Mining_hardware_comparison. Let's assume price of BTC is $10.50
For GPU mining, best card is AMD 5850. Lowest cost is $145 (Google shopping search). Hash/s 283. Wattage 92.25. Cost of electricity, 0.13 USD/KWh. Plug that into http://bitcoinx.com/profit/index.php and you get $27.46 USD profit in the first month. Divide by 4, that's $6.87 per week, or 4.7% profit a week. Sounds good, unless you include GPU depreciation, or extra cost of hardware.

Let's say the card you bought for $145 can only be resold for $120 after a month. Now your profit is $27.46 - ($145 - $120) = $2.46 a month, or $0.62 / 0.4% a week.

Or let's say there is no depreciation, but you ran out of PCI express ports, and need to buy another PC to stick your new GPU into. Let's be VERY  conservative and say a new PSU, MoBo, RAM, and CPU will cost you $150. Now your profit is $6.87 / ($145 + $150) =  2.3% per week.

Combine extra hardware with depreciation (and having a crappy, hard to resell PC), and you're even worse off. Since the large purchases are one-time costs, over a longer period of time they will pay off, of course. E.g. $2.46 / $145 = 1.7% profit per month. But also keep in mind that these components continue to depreciate, and even more importantly, the initial investment is now tied in hardware that may be difficult and time consuming to sell. This is why I think mining is OK for individuals (long time horizon, pay off GPUs over a few months, still have something to play games on), and is too risky to invest in. I definitely would not consider mining investments as something that can pay 2% to 3% a week though.

BTW, I'm not excusing beliefs in interdimentional 2000 year old zombies either 

Um, let me rephrase what I said: Lending to borrowers exposes you to fiat risks taken on by those borrowers. If the BTC borrowers have to deal with fiat, since they are borrowers, any fiat risk they are exposed to (such as what I mentioned above) will directly impact the lenders.
Even if a BTC-only lender/HYIP lends only to other BTC-only lenders/HYIPs, eventually someone down the road will have to lend to someone who will be exposed to fiat risk, and that risk in turn will transfer up the entire chain of all the lenders (last fiat borrower defaults, his direct lender defaults, the next lender defaults,n and so on). I think the only way around this would be BTC-only lenders just lending to each other, but that would make high interest rates (or any above 0%) impossible.

Don't forget that Pirate failed because him lowering rates signaled that his business was weaker, which initiated essentially a bank run. Other investments can fail the same way.
Also, there's still almost no such thing as dealing only in Bitcoin. Unless you buy and sell everything in Bitcoin (such as only earning money on Silk Road and paying your suppliers in Bitcoin), you're still affected by exchange rates.
The best explanation to date I've heard about how 3%/week is possible, is that people take out these loans instead of paying 4%+fees to BitInstant, and then pay the loans back once their money clears and they can buy the BTC back. However, if someone borrows BTC for the same amount of USD they are transferring to MtGox, and the price jumps %10 in a week, they will be 10% short on their loan once the week is up. Just borrowing Bitcoin and sitting on it won't make it grow either, and I can't think of ways for borrowers to increase their Bitcoin holdings 3% in a week without some input from fiat (can you?)

Actually they are not. Having stupid, ridiculous beliefs in magical SciFi directly impacts your credibility regarding other beliefs you may hold. If you believe in unsubstantiated magical BS, who's to say your beliefs about drugs don't come from unsubstantiated magical BS sources as well?

Actually it works both ways. Higher risk investments do mean that people would charge more for giving their money to it (higher interest rates), which is the standard understanding of interest rates (price charged for taking on risk, including time risk). However, at the same time, someone paying higher interest rates (especially fixed) is at a much higher risk of not being able to pay should anything happen. It does depend on average revenues for a set business, i.e. I would agree that default risk is low for companies paying 1% and 3% if average revenues are 5%, but Bitcoin doesn't exist in a vacuum, and does get affected by outside economies and exchange rates. So even if average revenues were 5% for these types of businesses in Bitcoinland, should something happen to bring the revenue rates down (Bitcoin price going up, or an unexpectedly high default rate), the business paying 1% will survive, while the business promising 3% could easily go in the red and fail.
Also, even if we stick to the "higher risk of default implies higher interest rate," one could argue that the reason these guys are offering such high interest rates is because they themselves are pricing in their high risk (though more accurately they're likely just chasing greed).

*face palm* Social Security is insurance, not a ponzi. That entire 7 point list that you applied to social security can be applied to every other insurance product out there, and it'd be wrong.

Totally concur with the A rating suggestion. Actually, I would use the following criteria to determine the rating, listed from highest to lowest weight:

Leverage ratio (how much is invested / how much is on hand in reserve)
Proof of reserves (whether the claimed reserves are stored in a public verifiable address)
Interest rate (higher rate = higher risk of default, so lower grade)
Delinquency rate (percentage of loans/investments that are delinquent or in default)
Weekly/monthly report of new deposits v.s. new revenues/profits (publicly verifiable if possible)
Business type (short-term loans, something else, or undisclosed)

Things like how long it's been going, or whether the people behind it are well known and have a reputation, are fairly useless, as demonstrated by pirate and Madoff. The earnings to liability ratios are also useless, if the earnings are just on paper as in a ponzi.
Someone who covers all 6 of the above should only get an A if their leverage ratio AND their interest rates are very low, since someone with even a 2:1 leverage ratio and 3% a week interest will get wiped out if Bitcoin jumps 50% in price too quickly and all the borrowers who were lent the investor's money to end up defaulting. A should mean a safe place to park your money in. Not a good quality casino.

Sorry to chime in, but I have a masters in finance, and work for a banking entity, so have experience in lending and such, and this starfish thing also doesn't seem right to me. From what I've read, it doesn't seem that Patrick is trying to deliberately scam people, but it very much looks like he is promising something that will be impossible to deliver.

I'm assuming these weighted scores are out of 100?

Way to get yourself trolled Dank. Holy Xenu! 

OK,  very highly improbable.

I'm just worried that he will get himself burned, since those types of returns are impossible for seasoned pros, let alone newbies.