That is an impossible burden of proof.  Baring some insider blowing the whistle, or the Police seizing evidence under a warrant it is impossible to prove a ponzi, given the fact that the operator can simply choose to not provide enough information to make that proof possible.  Still it isn't up to you to decide what constitutes acceptable evidence.   

Anything offering 3400% APR on $5M in capital is a ponzi.  Anyone who could pay that much interest simply WOULDN'T.  If they are smart enough to earn >3400% per year, then you are smart enough to use that profit to pay down the debt and keep the entire 3400% return to yourself.

If you feel I can't say that then feel free to sue me.  Baring a lawsuit it doesn't really matter what you think other people can or can not say. 



Pirate is in debt service default of his own contract.  By the rules of this forum he is a scammer.   

He owes forum members in excess of $5M and has not repaid that nor provided any transparency on how/when he intends to repay it.   
His obligations are increasing at a rate of $57,600 per day. 

I mean by your logic as long as he never admits to it being a ponzi he simply can never pay anyone back ever and it isn't a ponzi or a scam. 
There may never be absolute proof baring a confession.  To be convicted in a criminal court only requires "proof beyond a REASONABLE DOUBT", in civil court is merely requires the "preponderance of evidence".  Yes based on the facts known unless Pirate provided additional evidence to his defense he would lose a civil case alleging fraud and running a ponzi scam.  Pirate is certainly free to provide evidence to his defense.  He has chosen to provide nothing, and not repay more than a token amount, provide no specific timelines on repayment, and is in default of his own contract.

THAT IS A SCAM.  PERIOD.

He is in even more trouble if that $2 he owes is being compounded at 3,400% per year and you demand payment only in cash.

Less of a joke than SolidCoin.   

I put in a request to withdraw $9,320 USD on Aug 13th.  I was not advised on any excess delays.  I actually had been waiting longer than Aug 13th because the week prior CryptoXChange delayed all their wires and since I had a wire pending I didn't see the value in having another one pending (the prior wire was finally processed 6 days late).  I have been doing business with CryptoXChange for four months now and despite their website being horrible and customer support very slow they were a useful source of liquidity.  This is not the first bank wire, I have withdrawn in excess of $70 to this account in past transactions.

My request was made on 13th.  They made no notification it would be delayed or that it had been processed.    

On the 17th I requested a status update. I got this response:

That was the last contact I have had with CryptoXChange.  
I have made numerous email and support ticket requests.  

No response in over a week on a $9,320 bank wire delayed almost two weeks.  

I will be filing a Police report with the Australian police on Monday.  I just didn't want anyone else to deposit funds without knowing.

On edit:
Issue resolved.  While I still feel the delay and lack of communication was unacceptable the wire did arrived and in the proper amount. 
I give credit to CryptoXChange for accepting responsibility and resolving the issue.  I should point out the bank account is a company bank account and the had a new employee processing wires who sent it under the wrong name.

There are no updates.  TADA back on topic.  

Well there is one update since yesterday:
The amount owed by Pirate to his creditors has increased by another 5,000 BTC!

If Pirates claim of 500K BTC is accurate that would mean he now owes ~540,000 BTC (minus the value of 11 unconfirmed "small accounts").
Also his interest only obligation is now ~$56,700 per day or $39.38 per minute.  That means he needs to pay $56,7000 a day every day not to pay off the "investors", but to avoid the amount he owes from increasing.
Yes his debt in in BTC but I am using USD because maybe that makes it more "real".  So say today he paid back $25,000.  The amount he owed would still be increasing.  

Even if you still believe he had a legit business which could afford $57,600 a day in interest, he shut it down a week ago.   He nows owes about a half million USD more than when he shut it down.

SEC is one of the largest regulatory bodies in the world and Madoff ran a scheme for over a decade that makes Pirates stunt look like an idiotic highschool prank.

You can't regulate stupid.   How would one regulate Bitcoin?  Honestly.   Not that I am for more regulation (which merely raises the cost of business for legitimate businesses) but how exactly would you do it?

Yes.  TC is the company account I didn't realize I was logged into it.

Also I agree.
I think the timeline is even longer.  Bitcoin reaching PayPal tx volumes in 5-10 years would be an amazing accomplishment.  That would put VISA scale volume probably decades (plural) out.

Also even if the 500K was accurate (although it would be more like 540,000 now due to another 8 days of interest) the ponzi has been running for months now.  
The amount of coins actual invested is obviously much less.   If may be 100K BTC were put at risk and the 540,000 BTC simply represents imaginary paper profits that simply never existed.

Since the amount deposited grew over time, and had withdraws finding out exactly how many coins were deposited would require access to the books but as a hypothetical example.

"Simple Example Ponzi"
100K deposited on day 0.  7% per week.  No withdrawals allowed for 12 weeks.

After 12 weeks the "value" of all deposits on paper is 225K however at no point did more than 100K BTC ever exist.  At best there is 100K BTC but if the Ponzi operator paid him some of that "profit" then the scheme would have less funds.  It shows the futility of buying ponzi assets for even 50% on face value because the face value is highly inflated.  In this hypothetical example the reality is every balance needs a 60% haircut just to get inline with reality.  The buyer is taking a risk so the selling price should be discounted not from the face value but the from real value (40% of face).  In a real ponzi where the operator is skimming off the top and some withdrawals are made the amount of coins available at the end (even if the operator decides to not steal them) is likely an even smaller fraction.  Maybe 10% of the face value.

Well on a long enough timeline maybe but is Bitcoin tx volume grows faster than available bandwidth it is certainly a bottleneck.  Note I don't think any of these bottlenecks are fatal but depending on how fast Bitcoin grows it certainly can create issues which need to be solved.

For example at VISA scale tx volume (2,000 tps average, 4,000 daily peak, 10,000 annual peak) if we assume the average tx is 1KB and it is relayed to each node twice (once as an unconfirmed tx and once as part of a block) we are looking at a peak of 160 Mbps.  However each node should maintain at least 8 connections to other nodes to create a robust mesh so that would be 1.2 Gbps of bidirectional bandwidth.   Certainly not impossible but it is beyond the capabilities of most home internet connections.

Still to say it is will never be an issue is naive.

20 years ago your HDD was only ~1 GB.  
In 20 years your HDD will probably be 1000 TBs.  

I wouldn't call it a "problem".  It is an area developers will have to continually work on.  Making the node more and more efficient so it can handle higher and higher volume.  It means the work will never be done.  In 10 years the client code will be far more optimized but (hopefully) network volume will also be far higher.  One example of an optimization is a pruned database (remove spent outputs from blocks).   Satoshi had enough of a long term vision to make that possible by putting all the transactions in a merkle tree structure.  Also Moore's law will continually helps.

Still storage although the most visible is IMHO the least critical of the resource bottlenecks.

In order from most to least critical I would say it is:
* Bandwidth
* Memory
* CPU power (and energy consumption)
* Storage

Maybe or maybe not the point is that the origination IP address is never recorded.  blockchain.info saying the IP address is x simply means that is the first node which relayed it to blockchain.info.   It could be the IP address of entity who submitted that transaction but it also could just happen to be a node which received the tx from another node who received it from another node who recieved it from another node ..... who received it from the source.


My guess just based on past thefts is a keylogger.  Your PC is infected and the attacker recorded the password the last time you logged in and then just logged in as you.

Use 2 factor authentication.  If a service doesn't offer 2 factor authentication then don't use the service.

A password which is "fj32!89r@pnfejSSnfds9X089RD03j^lkj%sa&uyi2nk;ff" doesn't provide any more security than "password123" if the attacker is using a keylogger.   

Use 2 factor authentication.
Use 2 factor authentication.
Use 2 factor authentication.
Use 2 factor authentication.
Use 2 factor authentication.

I have yet to see one of these reports from someone who's account was protected by 2 factor authentication. 
While nothing is "hackproof" 2 factor does raise the bar very high and as such it is far more likely a hacker will just exploit weaker targets.

Common questions because the explanation of mining is always done wrong, with the emphasis on "free coinz" and not on the purpose.  Why are miners given "free coinz"?

The purpose of mining is to validate transactions and create a permanent record of the network consensus.   This is done by organizing new valid transactions into blocks and adding new blocks to the blockchain.
As such obviously as long as there are transactions there will still be mining.

For this service, miners are compensated with a block reward. The block reward consists of a block subsidy and tx fees. Currently fees are very low and the block subsidy is high.  Satoshi implemented the block subsidy as it ensures the network is strong even while Bitcoin is in its infancy.

However over time the block subsidy will decline and fees will become more important.

Mining never ends if it ends then Bitcoin ends.  It would be useful if people stopped talking about mining as a way to get free coins.  The purpose of mining is to protect the network.  The purpose of mining is to validate transactions.   Mining gives all coins value because it protects their authenticity and scarcity.  Miners just happen to be compensated for this service by the subsidy and tx fees.

Why?

Why would you need to know the order tx arrived?

The order received is no guarantee that is the order sent.  You are dealing with a peer to peer network where independent nodes can arbitrarily join, leave, fail to forward, run alternate versions or codebases, have unpatched bugs, etc.  

I mean even in streaming video a client doesn't assume that the order packets are received is the order they are sent.  The packets are given a sequence number so the player can re-arrange the stream and even with buffering occasionally sufficient number of packets arrive far enough out of order that playback is affected.   Now that is dealing with dedicated internet switches.  Replace that with a volentary loose association of nodes and you have even less assurance (none) that txs will be received in order.


It can't be answered.  The best thing you can do is perform some modeling/testing but even that has the limitation that your source nodes will traverse differing parts of the network and the network is continually changing so the results from the simulation would only be applicable to the network from that source to that destination for that specific period in time.  You may be able to draw some rough guidelines but they would be rough.

A far more useful system is for the client to be "smart".  The client could look at the past say 72 hours of blocks evaluate the distribution of fees on tx in those blocks and then compare it to the memory pool (tx waiting for a block) and provide the user with some guesstimates.   "i.e. for 90% chance of inclusion in the next block a fee of 0.005 BTC is recommended."

IIRC Gavin indicated that the end goal is for the client to give the user some information on fees HOWEVER remember that Bitcoin is in beta and a major patch which will give pool operators the ability to fine tune fee rules isn't part of the current version yet.   Until miners can make intelligent decisions about fees providing those kind of stats to users is just noise.

Why? 

If you can get 1TH/s for $x and it is the best deal are you not going to take is simply because someone else can 1/100th of TH/s for 1/100th of $x?

The idea that they must make the smaller units a worse deal is false.  They *MAY* make the smaller units a worse deal but they cartainly don't have to.
The economics of ASIC (high fixed cost and low per unit cost) make it most profitable for them to offer a competitive price for both small and large miners.

Still even if there was no $150 unit, a $5,000 rig isn't an impossible barrier for a hobbyist. 

A lot of fiat is a much more difficult to keep secret than a lot of BTC.  There weren't that many coins traded in the crash.  

Transfer coins to a brain wallet and sell a couple grands worth every week.   If BTC keeps rising you essentially have a lifetime annuity (in USD terms).

No come back stairway to heaven.  You were reassuring me.  Now that you are gone obviously nobody wants bitcoins and they are worthless.  I should sell them at any price.  Hopefully there is someone out there who needs lots and lots of cheap coins.

"Sell 10,000 BTC at market.   Let me get whatever I can for these worthless coins.  $9, $8, hell even $5."

Nah.  I will just hang on to them Mr. Stairwell.  I got no debt and you got 5,000 BTC in interest piling up every day.

tick ... tick .. tick ...

The price of BFL hardware is roughly the same (MH/$) as the high end TH/s monsters.  If the USB unit won't break even then neither will the large one.   Still even if it is dominated by commercial entities that doesn't mean a monopoly will form.  Almost nobody mines their own gold however the distribution of supply is so fragmented no single player has sufficient marketshare to control the market (I think the largest player has about 8% of global production).

Also not everyone will mine for profits from tx fees:
* Those invested in Bitcoin may mine simply to protect their investments
* Merchants and other enterprises who rely on Bitcoin may mine to ensure their companies have a network to profit from
* Users seeking anonymity will mine because it allows them to acquire coins which have no "trail"
* Some users may mine for break even in cold climates as a source of "free heat".
* Some companies may mine to gain better hardware utilization (imagine if Amazon put a PCIe ASIC miner in each EC2 server).  When the server is idle it mines and thus any profit improves the overall efficiency of Amazon datacenter.  When the instance is needed it stops mining until it goes idle again.

There is no evidence of Monopoly/Oligopoly being able to sustain themselves in a free market without either government intervention or natural monopolies and bitcoin mining is neither.  There are really no economies of scale, no high barriers of entry.  No mechanism to artificially constrain supply.  No international borders or duties to prevent global competition.

TL/DR:
If Bitcoin mining becomes a Monopoly/Oligopoly it would be the first of its kind.

OPEC wouldn't exist if it weren't for governmental interference in the free market (constraining supply, subsidizing the cost of fuel, taxpayer support of military intervention).  In the absence of that, the real cost of oil based products would be much higher today (these externalized costs would be internalized which would make oil less attractive).

Or PirateCoins^TM with a 500K PC pre-mine.  Initial exchange rate 1 PC = 1 BTC.