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641  Economy / Lending / Re: Bitcoin Savings and Trust is probably a Ponzi Scheme: A Petition on: May 24, 2012, 04:54:59 AM
He's not shorting bitcoins. You should read this thread: https://bitcointalk.org/index.php?topic=82849.180
The thread says he's shorting Bitcoins.

The thread says:

1) He borrows Bitcoins.

2) He sells them.

3) Later, he buys Bitcoins to pay back those he borrowed from.

That is basically the definition of shorting.

Quote
In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to that third party.
http://en.wikipedia.org/wiki/Short_%28finance%29

Normally when you say short sell, you are talking about selling at market price and buy back in the future hopefully at a lower price. He's not doing this. He's selling bitcoin at a higher than market price and try to buy the bitcoins back at a price around market price when he sold the bitcoins.  And he hedges bitcoin price rising.

So in normal short selling, you only make money if prie goes down. In his case, he should make money either way if his hedging is done correctly.
642  Economy / Lending / Re: Bitcoin Savings and Trust is probably a Ponzi Scheme: A Petition on: May 24, 2012, 03:48:42 AM
My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available. Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalk.org/index.php?topic=82849.msg916286#msg916286
Effectively, you're saying that it's a huge gamble that the price of Bitcoin will go way down. He wants to sell people's coins today and pay them back with coins tomorrow, when he expects that they'll be worth less. But that doesn't work for two reasons:

1) It incurs huge, needless risk. If he's holding lots of investors' coins and the price of Bitcoin goes way up, all those profits belong to his investors, not him. If he holds 15,000 Bitcoins that have been invested and the price of Bitcoins doubles, he's much worse off. He now has to acquire Bitcoins to pay back withdrawals at twice the price. You don't hedge by holding an asset.

2) You don't need to pay 10%/month to short Bitcoins.


He's not shorting bitcoins. You should read this thread: https://bitcointalk.org/index.php?topic=82849.180
643  Bitcoin / Bitcoin Discussion / Re: A day in the life of a pirate. on: May 24, 2012, 03:47:00 AM
I'm not paying interesting interest (see I'm just tired) in fiat, it's in Bitcoins.  My lenders do whatever they want with the profits I pay out.

Oh there are doubts what you are paying interest in. Or more accurately that you prefer to have 2-3 orders of magnitude higher cost of capital when denominated in BTC as compared to cost of capital denominated in USD. This much is clear and really indisputable.

My statement is still not refuted:

Quote
there are only two possibilities:

1. The issuer is acting irrationally.
2. The issuer is offloading to "investors" some enormous risks. As such these are not really "investors", but simply gamblers. And they should be really not so much concerned about return on capital as about return of capital.

Is there a third possibility? If yes what it is? If not, is it 1 or 2?

P.S. I am aware of only one biz model where 10% per month cost of capital would make sense. It is a ponzi scheme.

I'm really not sure what's so hard to understand. His business requires holding on to a ton of bitcoins. It's more bitcoins then he's comfortable risking in his own portfolio. So he would want to offload that risk to people and share the profits with them. So it's a win-win situation.

So why does he prefer to borrow btc at such a high rate versus borrowing usd at a lower rate? notme answered it pretty well. Borrowing btc means he returns btc and borrowing usd means he returns usd. So there's no currency risk involved in holding the capital. (They is still currency risk involved if bitcoin price shoots up when he's trying to exchange usd back to bitcoins.)

Now think of it in reverse. If you had amazing business idea that can for sure make 10% a week on an almost unlimited amount of usd capital, would you want a usd loan that costs 5% a week? Or would you want a btc loan that costs 5% a month. Sure you would make a lot more with the btc loan. But what happens when btc prices shoots up to $30? You're left holding usd that you need to convert back to btc to return to your lenders. You would have to have increased your capital 6x in order to return that loan. Now that's a risky loan for the lenders!

So the smart thing for pirate to do is to take however many bitcoins he feels comfortable owning and put that into his business. As his business demands more bitcoins than he has, he should borrow the rest. It's true that he won't make as much from the bitcoins he borrows, but then he has no risk on them either.

I used to question why pirate would need to borrow so many bitcoins and not use his own. But now that I understand why, I believe that pirate's lending is legit and not a ponzi scheme. Well the only other thing is I think he may be paying too much (7% a week) to his lenders when most other people are only paying half as much. He could probably reduce it to 5% a week and still be able to get as many lenders as he needs. But maybe he is not greedy and want to share the wealth.

644  Economy / Goods / Re: Interested in selling my 2007 SLK 280 for bitcoins on: May 23, 2012, 08:52:59 PM
Here's my craigslist listing:
http://sfbay.craigslist.org/sby/cto/3033867282.html

The car has low mileage and has a really nice upgrade that I put in. I added a chip that allowed me to use the key remote to open/close the convertible top. So when I park, I can just walk out and have it close behind me. Or when I am close to the car, I can have it opened before I even get to the car. Normally, you need to be in the car with the engine on and hold onto a switch the whole time while the top opens or closes... and it's a real pain.

And the aftermarket navigation is an Eclipse AVN6620. It's very similar to Toyota's navigation since it's based on the same software: http://www.crutchfield.com/S-TKD5mklSCzL/p_099AVN6620/Eclipse-AVN6620.html

Let me know if you are seriously interested.

Good Lord that is a sexy car.  I have driven the BMW 760i and the Benz v12 Kompressor.  Benz freaking scared me.  Faster then my bosses Modena.  (Modeno?) 

Anyhow, I will crunch some numbers and get back to you.  I have been saving for a mini-rig or two ... but how cool would it be to buy a freaking SLK with BTC?  Sounds pretty rad to me LOL

Yeah, I wonder if this may be one of the most expensive thing sold for bitcoins. Well in terms of number of bitcoins, nothing beats the 10,000 btc for 2 pizzas. 1 pizza = 1 slk Smiley
645  Economy / Goods / Re: Interested in selling my 2007 SLK 280 for bitcoins on: May 23, 2012, 08:45:03 PM
Here's my craigslist listing:
http://sfbay.craigslist.org/sby/cto/3033867282.html

The car has low mileage and has a really nice upgrade that I put in. I added a chip that allowed me to use the key remote to open/close the convertible top. So when I park, I can just walk out and have it close behind me. Or when I am close to the car, I can have it opened before I even get to the car. Normally, you need to be in the car with the engine on and hold onto a switch the whole time while the top opens or closes... and it's a real pain.

And the aftermarket navigation is an Eclipse AVN6620. It's very similar to Toyota's navigation since it's based on the same software: http://www.crutchfield.com/S-TKD5mklSCzL/p_099AVN6620/Eclipse-AVN6620.html

Let me know if you are seriously interested.
646  Economy / Goods / Interested in selling my 2007 SLK 280 for bitcoins on: May 23, 2012, 06:52:58 PM
I'm trying to see if anyone is interested in buying a car for bitcoins. I'm in the SF bay area. Don't know the price yet, but we could talk about pricing if you are interested. It would likely be in the >5000 bitcoins range. I can post more info if anyone is interested.
647  Economy / Lending / Re: Bitcoin Savings and Trust is probably a Ponzi Scheme: A Petition on: May 23, 2012, 08:43:24 AM
What stops him from buying coins on birges?
Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)

Thats the point.. why would he borrow at an insane interest rates if he has to buy coins at exchanges anyway. All that changes is that he has to buy even more.

My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available. Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalk.org/index.php?topic=82849.msg916286#msg916286
648  Economy / Lending / Re: Bitcoin Savings and Trust is probably a Ponzi Scheme: A Petition on: May 23, 2012, 08:33:48 AM
Hey hey, he might just be selling coins, why not?
Because he pays people their interest in coins. So he must, on net, *acquire* coins. I have tried to imagine how such a system could work where he obtains his investment in coins and also pays out interest in coins. I couldn't do it. If you have an idea, please share.

Well, he's said previously that he's selling coins locally to groups of buyers. So if you accept that, all he does is sell coins at a markup to people for cash, deposit that cash to mtgox, trade for btc, pay interest to depositors, and whatever is left is his profit.
649  Bitcoin / Bitcoin Discussion / Re: A day in the life of a pirate. on: May 23, 2012, 08:17:49 AM
Would you be willing to disclose anything about your actual profit margins over the 7% weekly you pay for the use of funds?

The only good thing about this ever ending is that I'll find out what the hell it is. I might be able to replicate it in a different context .... Wink

Sure, I net gross 10.65% per week and payout 5.98% on average and it really depends on how much I want to work.  The process has become pretty automated lately which is nice because I can spend more time on my other projects and with the family. Smiley

Thanks for your polite and non-divulging question. Smiley

To those that wonder why pirate still needs to borrow coins from people and not use his own coins, I think I know why. It's true that if he uses his own coins, he can earn the full 10.65% he makes each week, but then he had to take on the risk of bitcoin failing. For example, if a flaw is found in bitcoin and the value drops to 0, he would lose all the money he held in bitcoin. Even if bitcoin doesn't fail, he may not want to have so much of his wealth tied to such a risky currency.

So instead of holding 10,000 of his own bitcoins to use in this business and earn 1065 btc each week (10.65% of 10k), he can just borrow 25,000 bitcoins from us and earn 1168 btc each week. (10.65% - 5.98% of 25k). Another way to look at it is, would you rather make 10.65% a week but have some risk of losing your capital if bitcoin fails OR would rather make only 4.67% a week using someone else's capital and have pretty much no risk whatsoever. I think pirate would be stupid to risk his own money. If you don't agree, ask yourself this: if you had a way to make 3% a week on your bitcoins with absolutely zero risk on your capital, would you still invest in pirate's program and make 7% a week but risk losing it all if it turns out to be a ponzi scheme?
650  Bitcoin / Bitcoin Discussion / Re: A day in the life of a pirate. on: May 23, 2012, 08:00:45 AM
The only thing that would affect my profits would be a huge spike in price over a very short period of time.  At this point I really don't need to know when things will affect my operation because I'm able to hedge my risk with how it operates.  If I saw something coming that I felt would cost me more than I'm willing to lose, I would take the necessarily actions to limit the loss, but like I said... it's just a profit loss.  Like I've said before and my lenders know, if I had to take a large loss to cover coins... One, they wouldn't know about it (I still owe them the coins) and two it wouldn't be enough to put me in a pinch or cause me to run to Antarctica.  So as far as my lenders are concerned the only thing they need to trust is me.

Before bitcoinica went down, you could have used bitcoinica to hedge your risk in case the value of bitcoin rises too much and wipe out your profit. What are you using now?
651  Economy / Securities / Re: [GLBSE] BFLS - Bitcoin Mining & Sales on: May 21, 2012, 07:56:39 PM
I assume your dividend payment is calculated after electricity cost, right? Your dividend payment for this week is equivalent to about 880 mhash/s per bfl single without even counting electricity cost. Are you using something like GPUMAX to get higher than PPS?
652  Other / Off-topic / Re: Butterfly Labs - Bitforce Single and Mini Rig Box on: May 21, 2012, 12:13:31 AM
Can anyone tell me what's the best way to cool a BFL single with a fan?
I have one of these usb fans: http://www.amazon.com/Thermaltake-Mobile-External-Cooling-AF0007/dp/B002OJN250/ref=sr_1_2?ie=UTF8&qid=1337559123&sr=8-2
I currently have it sitting on top of the single and pulling air upwards. Is that the best way? Or maybe having it blow air in from the side? Or do I need to remove the case for a fan to be effective?
653  Economy / Goods / Re: [WTS] Two rev2 x6500 (SOLD) on: May 18, 2012, 06:59:54 PM
Final payment sent.

Received. Thanks!
654  Bitcoin / Hardware / Re: FPGA development board "Icarus" - DisContinued/ important announcement on: May 18, 2012, 07:55:00 AM
Hmm, yeah, it's a bit hard to value the Icarus boards now that the new Lancelot boards are about to be released.

Also may I ask why you are selling them? Looking to replace them with BFL Singles?

I'm interested as well but the asking price seems a bit high.

Well, make me an offer.

There's nothing wrong with my 2 icarus boards. Compared the the BFL Singles, the break even time is just long. Of course, if I just let it mine for a year or 2, I will likely make my money back and it will keep "printing money". But I'm just kind of testing the water to see if I can get a good enough price for these right now.

Are these boards Rev1, 2 or 3?


I already sold these. Thanks.
655  Bitcoin / Hardware / Re: FPGA development board "Icarus" - DisContinued/ important announcement on: May 17, 2012, 04:50:37 PM
Hmm, yeah, it's a bit hard to value the Icarus boards now that the new Lancelot boards are about to be released.

Also may I ask why you are selling them? Looking to replace them with BFL Singles?

I'm interested as well but the asking price seems a bit high.

Well, make me an offer.

There's nothing wrong with my 2 icarus boards. Compared the the BFL Singles, the break even time is just long. Of course, if I just let it mine for a year or 2, I will likely make my money back and it will keep "printing money". But I'm just kind of testing the water to see if I can get a good enough price for these right now.
656  Bitcoin / Hardware / Re: FPGA development board "Icarus" - DisContinued/ important announcement on: May 17, 2012, 06:07:44 AM
I have 2 icarus boards for sale. PM me if interested.

How much and are you willing to accept bitcoins?

I'm in the US. I was looking for 210 btc shipped to US, but I don't know what the demand is for this so I'm willing to negotiate.
657  Bitcoin / Project Development / Re: [ANN] Bitcoin Mining Hardware + Services, Pfmarket Technologies on: May 17, 2012, 12:18:04 AM
No it isn't, I know the owner personally! Also, they use use cutting edge technology... hint hint

Now we just need a low post count user to have met Gladamas in person and seen the mining hardware and vouch for him.
658  Bitcoin / Project Development / Re: [ANN] Bitcoin Mining Hardware + Services, Pfmarket Technologies on: May 17, 2012, 12:11:32 AM
We offer Bitcoin Mining hardware equipment!

http://bitcoinminingproducts.co.cc

It's a scam!
659  Bitcoin / Hardware / Re: FPGA development board "Icarus" - DisContinued/ important announcement on: May 16, 2012, 11:47:10 PM
I have 2 icarus boards for sale. PM me if interested.
660  Other / Off-topic / Re: Butterfly Labs - Bitforce Single and Mini Rig Box on: May 16, 2012, 10:02:48 PM
Semi off topic I wonder if there would be interest in a falling price auction for my Single.
Start the price at say 200 BTC and it falls 3,306 Satoshis every second (20 BTC per week).
Auction continues until someone bids.  First valid bid wins.

Interesting to see when it gets sold. Obviously a single cannot make 20 BTC a week. Let's see... with 850 mhash/s, you can make about 15 BTC a month. The current wait time for a single from BFL is about 2 months. So paying 120 BTC ($600) for a single in 2 months is equivalent to paying 150 BTC for a single that you can get immediately. So I think the optimal price for your auction will be 150 BTC (or waiting 2.5 weeks). If anyone is willing to pay more than that, they should just order a single from BFL right now. But then people are irrational...
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