As much as I respect Joel regarding other areas, here he's making a claim that's the equivalent of saying Goldman Sachs and JP Morgan shouldn't have been able to work. Numerous proposals have been put forth, a number of which are not just plausible, but have had successful implementations in traditional finance (though perhaps not legal). There have also been a few instances where traditional financial regulation has been projected onto Bitcoin's unregulated environment even though no such authority exists and may not even be capable of enforcing decisions.

In addition, to my knowledge he has not refuted any of the examples offered with any kind of explanation beyond the three items above. Claiming "implausibility" and "significant misunderstanding" is as helpful as the statements that 7% returns are factual evidence of Ponzi practices; implausibility is subjective, and misunderstandings can be dependent upon which school of economic though you adhere to.

I also don't know of any links that have been provided to relevant information on this matter. At this point, I could fire back the exact same accusations of implausibility and significant misunderstandings on his part about finance. Joel, any clarification or information would be greatly appreciated.

I'll say this regarding item #1:

Gains can be had by all, but some gains may be greater than others. Steady appreciation in value allows for this.

Example:

• We both buy BTC1 @ $5
• I sell at $6
• I buy again at $7
• I sell at $8
• I buy again at $9
• I sell at $10
• I buy back at $11
• We both sell at $12

The end result is that we've both gained, but because I was hopping in and out (whether trading, mining, running a business, etc), my gain due to BTC appreciation is only $4 whereas yours would be $7.

That dynamic flow is where the gains are made - the overall gains are made at the expense of the USD, as wealth represented by the dollar is transferred into Bitcoin. Read FOFOA's It's the Flow, Stupid post for a more in-depth discussion on this in terms of oil value flowing into the USD.


Yes. At the same time, I'm concerned about Micon's sham of investigative journalism hawking conclusive evidence when it's based on conjecture and opinion. No evidence other than pattern similarities have been presented, and the emotional fervor has completely discredited any semblance of professionalism.

The likes of znort987 and organofcorti would be more appropriate for this analysis IMO.


Holding shares for capital appreciation arrives at the same end point as receiving full payments on profit for the same duration.

Example:

1 share valued at $1 rises to $100.

or

1 share valued at $1 generating simple interest payments of 10% for about 84 periods (or totaling the same duration the capital appreciation took to achieve $100).

You still have the same amount deposited either way. The former makes sense when an asset is undervalued, while interest payments usually make sense when asset valuation and capital flow are stable. We're used to seeing established firms paying a dividend based on profit from a fully-realized operation. Receiving payments on profit during growth is a completely foreign concept to the majority of investors today.


There is still no legal precedent regarding Bitcoin in the first place. Nothing guarantees they'll be treated as existing intangible items are. And would the funds clawed back be in USD? Will that be done through liquidation of BTC? Even if all of the individuals could be identified, if they're distributed across jurisdictional borders, how would that reverse anything without being able to retrieve the bitcoins that have been sent? Would those targeted be subject to remuneration of the entirety, being in excess of their own participation? How would off-blockchain exchanges be handled?

This is a legal and regulatory nightmare that is not confined to a single system of law. Bitcoin is not explicitly subject to any law as of yet, and its very nature defies traditional structures to begin with.


Looking forward to actual proof, one way or the other.

Today saw an interesting signal - normally the gold-silver ratio rises, or moves in favor of gold during price management. This time, the ratio unequivocally moved in favor of silver during the takedown.


In the end, there is only one path...

Three steps forward, two steps back. The weight of the old order is sitting on gold and silver (most real assets also). Bitcoin doesn't have such opposition to contend with yet. Buy a gold Casascius coin for extreme win

So where's the material misrepresentation? We're back to no concrete proof from either side, only accusations and conjecture. The responsibility remains squarely on the individual for now, scam or not.

The first sentence from the OP:


Where is there any suggestion for an individual to use his own judgement, that the decision belongs to the individual? The above is not an objective stance. The majority of team Ponzi posts make unequivocal claims that are unverifiable from either direction, and proceed to tell people what to do with their own assets. Apparently, there's no such thing as buyer beware in their collective vernacular.

The whole concern about changing the tags appears to be secondary to the crusade, especially when considering the repetitious and emotionally-charged assertions devoid of proof. That's colloquially known as a witch hunt or smear campaign. Team Ponzi is more fraudulent and inciteful than any of the accused as far as I'm concerned.

Yes, in a sense I am "complicit" in some of the investments listed - shock of shocks: I'm invested in a few of them. Why? Because the risk/reward is not dictated by baseless accusations from short-sighted individuals whom have demonstrated their inability and/or unwillingness to explore alternative possibilities that are fully viable in the unregulated Bitcoin environment.

If they can't agree to disagree in the face of logic and lack of evidence, then there's an apparent lack of emotional and intellectual maturity on their part.

Etiquette.



What happens if/when capacity opens up? Can that availability be predicted?

Apologies accepted at the Bitcoin address in my sig.

That's what team Ponzi want - no freedom of choice for anyone. They don't offer recommendations, but demands.

If you did plunk down 15k, it's your money, your decision, and your ass iff things go awry.

Just pull the principal after ~11 weeks and let the rest ride. Then there's no more risk.

Hey team Ponzi: ignorance is expensive, especially in the form of lost profit!

It's the most basic of supply & demand reasoning, so it may not have warranted explaining. If HK's capacity is full at 1.9%, there's no reason to keep the high rate in place to draw funding.

Micon, I'm not sure about this one. Let me know if you think it's a Ponzi.

AFAIK, yes. Estimates of above-ground gold are around 170,000 tons, of which the ~30 level is held by governments and supranational organizations.

Yeah, nothing like a closed mind to make you want to leave the sheep behind. At least some can maintain a productive discussion.


Yup, the pipes analogy is great.

You're giving Atlas a run for being the most obnoxious troll around.

Ignore.

If you want a Kardashian dog & pony show, you won't get it from me. Ignorance prevents you from connecting the dots and engaging in any argument of substance. Read the links to expand your knowledge.

A buyer at $5 may be a seller at $10. New entrants may be buyers at $10 and sellers at $9. In either situation, supply is replenished and available for acquisition to be redirected as return for investors. Everyone is looking at the total amount of BTC in existence rather than the churn at the margin, where holders of bitcoins sell, reintroducing flow into the market. Once more - that flow becomes fodder to be picked up and supplied to Pirate & investors. There is a recirculating dynamic.

Get it? No? Read the links again. Then read them a third, fourth, and fifth time. Sleep on it. Read it again. Read through my explanations in this thread again. Not an easy concept to wrap your head around when you're stuck in the fiat world, is it? Keep reading.

To help, study the difference between cash/physical market pricing and derivative-driven pricing of underlying assets (esp. options & futures). Bitcoin is almost entirely a cash/physical market, and its stock to flow ratio works nearly identically to gold.

Ad hominem. If you want to contribute anything of substance, you need to have comprehension of the dynamics I'm talking about. The critical concepts:

Capital flow

Stock to flow ratio

Video discussing S:F

Everyone is concentrated exclusively on the stock, which not where the action is. The margins are where the flow becomes most important, and also where the profit is gained. It's very similar to hydraulics, where a marginal effort amplifies results.

Then what's your DCA? 

Why isn't everyone creating The Next Big Thing^TM? Wealth has little to do with the ability to understand an idea. There's a perspective shift required to make use of a situation, especially when it comes to new technologies. It's summed up well by the phrase:

"Why didn't I think of that?"

If everything Pirate is doing were confined exclusively to the Bitcoin economy, there would be no chance of perpetual operation; it would've been over almost three months ago. Instead, I think churn at the margins is being capitalized on. As long as that continues, there will be profit potential.

As I've suggested - gold and silver market management is extremely profitable for the entities involved, and it continues to be profitable for them even as the USD price rises. The same applies to Bitcoin on a smaller scale (for now). To understand how this is possible, that perspective shift is necessary. There are perhaps a few dozen prominent individuals with this view regarding gold, and they're mostly labelled as the fringe. Gold and silver continue to defy the skeptics, who happen to be the vast majority and many of whom are very wealthy.

How many big, wealthy household names understand Bitcoin (not that [m]any are even aware)? Does that make them right and us wrong, or do we share a unique perspective that they haven't been able to grasp?

Yes.


Neither Gox nor Pirate are the entire economy. Data shows that both fit well within the overall activity.

Daily transactions: uptrend

Daily transactions excluding the highest volume addresses: uptrend

Mt. Gox USD volume: uptrend

Unique addresses: uptrend

Transaction volume: uptrend

At an estimated 200,000BTC transferred per day, 1,400,000BTC per week is sufficient to contain trading and interest payments related to BTCS&T in addition to all other market activity.


How do you know?

Paper variants, perhaps. With physical metal, and other physical assets in general, capital flows will rush to them (smart money already has) in an escape from financial instruments. In this situation, paper gold and silver could fall below $500 and $10, respectively. So don't hold ETFs or shares unless there's actual metal or production backing them up and there are multiple records of your ownership aside from just the broker. Otherwise, you risk becoming another MF Global victim.

Meanwhile, if bonds experience an outflow, the primary recipients will be commodities and equities. Currencies will benefit, but will not be the primary targets because of inherent instabilities shared with bonds. Everyone is expecting stock market crashes when there are signs of accumulation, and the opposite in bonds. I expect a bond market crash instead.

Bitcoin - weekly Gox volume below 350k would be suggestive of a $10.80-11 floor next week, and <320k points to $12 or better.

The bull doesn't want anyone along for the ride, so there probably won't be any obvious dips as entry points. It's probably best to scale in and out by selling some BTC at spikes, then buying PMs.

Several alternate revenue streams have been pointed out repeatedly.

There's no way to prove or disprove their existence and capital movement without revealing more information, but doing so might reduce the competitiveness of BTCS&T. That's the same situation that exists with the inability of proving or disproving a Ponzi. In the end, everything may be legitimate and Pirate might still decide to simply run off with everything regardless of whether it's a Ponzi or not.

Micon is his own worst enemy even beyond being emotionally unstable, as his actions only benefit Pirate in the following ways:

• Sporadic, unorganized withdrawals simply allow a Ponzi to continue operating
• Withdrawals allow for continued legitimate operations to provide an elevated return for a longer time before market saturation slows growth

Either way, whomever maintains a deposit (that has already doubled and the principal withdrawn) wins because the risk of default is reduced while returns persist.