It would easily be worth $1,000,000 to have them early. You could run a two-hour primetime special dissecting them and the ratings would be amazing. Is it worth publicly being known as the douche who paid $1,000,000 to a blackmailer .. that's another question.

The problem with PPT investors going after the PPT operators is that the PPT operators did what they said they would do. Given that they made no provision for deducting collection expenses and the fact that such efforts are unlikely to succeed, it's hard to argue that they're obligated to pursue Pirate for the benefit of their investors at their own expense. As for going after them for running a Ponzi scheme, it's not like they had information much different from what their investors had or that their actions were significantly different from the actions of their investors. The PPT investor's hands are no cleaner than the PPT operator's.

PPT investors might be able to go after Pirate. But even that is looking unlikely. (Though the Madoff precedent, where passthrough investors were ruled unable to collect against Madoff, was specific to SIPC claims for funds involved in SIPA liquidiations, so probably doesn't apply here.)

I hit 'show' even though I have you on ignore just in case you said something coherent. I want my 15 seconds back.

Right, but that really doesn't matter. People are so risk averse they miss the big picture. Yes, you will suffer the occasional total loss, but it can still be worth doing. Especially when the alternative is a constant slight drag and the probability of total loss is low.

A few months ago, I was explaining community credit to a man who owns a grocery store. He brought up the possibility that someone would default on their debts, even someone who had built up credibility through hundreds of legitimate transactions. My conversation with him basically went like this:

Me: Suppose that one out of fifty people did that to you. It would be like one out of fifty people walked out of your grocery store with all their normal groceries but didn't pay a dime.

Him: Exactly. There's no way I could stay in business if that was happening. It would be a disaster.

Me: A lot of your customers pay with credit cards, right?

Him: Yeah. Lots.

Me: How much do you pay on those credit cards? 2%, 2.5%?

Him: Yeah, about that.

Me: 2% is 1 in 50.

Him: *lightbulb goes on*

Also, you're not helping him. Every time you post your weak defenses, others feel obligated to rebut them with much stronger arguments. On net, it makes his position worse.

Individuals can invest in PPT too.

That he would accept the label of scammer should he not hold up his end of the bargain, that is, that he understands that not holding up his end of the bargain would in fact make him a scammer and justifiably labeled as such by the community. It reads as reinforcing the seriousness of the bet as an enforceable agreement such that violating it would constitute scamming.

I wish it wasn't so, but I do believe that Matthew, at least in the beginning, believed that Pirate was going to pay people back and had he won, would have gleefully accepted any funds paid to him and pursued scammer tags for anyone who didn't pay him back. If he didn't believe this, he faked it *incredibly* well.

By the way, if your implication was that it's a reasonable interpretation that accepting a scammer tag was somehow full payment for the bet, then how do you explain why other people kept betting or why people raised their bet amounts or asked for escrow? It's not like Matthew could get more than one scammer tag. So it's pretty clear that nobody accepting the bet, except possibly the first person or two, had this interpretation. (And it's silly and unreasonable.)

Only for young boys.

Yes, exactly! Don't advocate what is right because it's too easy for someone to turn it upside down.

Awesome. A good analogy to use might be to compare Bitcoin to the Internet and these scams to Nigeria scams.

He repeatedly claimed no Pirate exposure, largely because the fund was backed by his personal funds. But we now know that much of his personal funds were in fact "invested" with Pirate. This is what we know for sure because this is what he has said. He has made vague claims about mining equipment that will be used to pay off investors (either by mining or by selling the equipment), but has not quantified this yet.

I do not believe it is known what his total obligations are or what his total equity is that will be used to pay them back.

But the crux of the argument behind those calling him a "scammer" is that he claimed no Pirate exposure but clearly had significant funds held with Pirate such that losing those funds impacted his investors. There's no way he couldn't have known that Pirate being unable to pay back would impact his investors, yet he continued to collect deposits with the promise of zero Pirate exposure. Those investors are now left with an uncertain payback schedule that may well never materialize.

Ahh, so if you don't disclose what you're doing with the coins, that's fraud? So mybitcointrade is a fraud, right? They don't disclose how they "invest" your coins.

Zeek was always vague about what they did. I don't think what Pirate claimed he did is inconsistent with what he might have believed he was doing in passing through to Zeek.

In other words, it may be that all Pirate is guilty of is the same idiocy as the folks who invested with him. Just as they speculated about the ways he might be able to make a profit and thought their speculations were reasonable, he might have thought the same about Zeek.

Great example. What's interesting about this example is that part of the reason the resistance was so effective was that it didn't have a command and control structure that could be seized. If you had to capture an AnCap society house by house, that would be a daunting task compared to just seizing the government of an already-conquered people.

Plus, it might not matter too much to people who rules them. If people don't see much difference between the two governments, then does it really matter that you were conquered. On the other hand, any conquering force would be a profound loss of freedom to an AnCap society. So there's more motive to defend. (For example, would Greek people care if France took them over? Maybe out of pride, but as a practical matter, there wouldn't be much difference.)

I don't know what "national defense" would look like in an AnCap society. But I have no reason to think it would be particularly difficult to come up with a way to do it.

The question is whether there's *only* a bank run going on. There may also be an equity crisis that is masquerading as a bank run.

For example, say someone borrowed from Patrick to invest in Pirate. They may now be slow on interest payments or even making interest payments fully to Patrick out of banked Pirate profits. But that loan will probably go bad unless the debtor opts to pay the principle out of their personal funds. So Patrick may be thinking "I have X bitcoins out there in loans that are current and so will pay on schedule", but he may never see the principle back on those loans.

Things may be much worse than Patrick thinks they are, even if he is 100% completely honest. (Though naive, it's not like lots of people didn't tell him this would happen.)

A clear statement from Patrick indicating his equity, liquidity, and obligations would go a long way towards setting reasonable expectations and allow his depositors to track whether he's meeting those expectations.

There was mountains of evidence from the very beginning. The two most obvious pieces of evidence were: 1) He was vague and even contradictory about his actual method of making money and everything he did say made no sense. 2) If he had a way to make so much money, the first thing he would do is pay down ultra-high-interest debt, but he was actually acquiring more of it.

If you think that isn't evidence, then I suspect you don't understand what evidence is.

As for mybitcointrade, the evidence is in the offer. Basically, what they've said is "Lend me $50,000. I'll go to Vegas and gamble it. If we win, we split the money. And if I lose the money, you lose. Oh, and I won't tell you how I lost your money if I do, you'll have to take my word for it." Even if all of that is completely true, and even if they do everything they promise, it's still an obvious scam. Only a complete fool would send someone their money on terms like that.

And also, what's the total equity that will be available to pay debts to depositors?

Wait. Are you saying the Bitcoin Police have no police power?!?!

If that happens, I will apologize to both of you.

If Pirate provides evidence that he was actually operating a passthrough to Zeek, will you still hold him responsible for returning your coins?

Umm, what?! That's like describing me buying a gun by saying that I "will soon have the right to shoot people".