That should be everyone's stance. Individual lenders have no authority to settle any debt with Pirate because the other lenders own a portion of that debt. The agreement between the lenders and the PPT owner controls how any payments on that shared debt are distributed, and bypassing the PPT owner breaches that agreement.

If two people pool their money to buy a house as an investment, each paying half, with an agreement to split the profits when the house is sold, then each one can certainly sell their interest in the house. But they cannot cut off any 50% portion of the house they choose, sell it, and keep all the money. They don't each own a particular half of the house that is theirs to do what they wish. They each have a one-half interest in the entire house. Selling half the house and keeping the profits deprives the other half-owner of their half of the proceeds from that portion of the house. The proceeds from the house are to be distributed according to their pooling agreement.

It is the same with PPTs. There isn't some specific Pirate debt that corresponds to a single share such that Pirate can pay that share back. Each holder has a pro-rate share of the entire debt with their agreement governing how payments are distributed.

The difference, though, is that BTC is much more volatile from the perspective of a diversified collection of goods.

Pirate defaulted as soon as he didn't process a withdrawal on time. Matthew's bet was offered in response to Pirate's response to his failure to pay. Any defaults prior to or implied by Pirate's agreement wouldn't cause Matthew to lose the bet.

"Post in this thread how much you're committing and I will double that amount you commit (maximum of 10,000BTC in bets allowed in this thread total) if Pirate does not pay out in 3 weeks as he described in his thread."

I can't quite figure out which thread that's referring to. Anyone have a link?

This will probably all become academic anyway once Matthew's deadline passes. I have a feeling we won't need to do any lawyerly parsing of ambiguous terms to figure out who won.

I don't think so. For example, here's a middle position:

C) Pirate honestly, but stupidly, believed that if he acquired enough BTC, he could make huge profits by manipulating the market. Or, failing that, the value of Bitcoins would drop to zero before he collapsed because he believed Bitcoin was doomed to fail. He operated as a Ponzi scheme to build sufficient funds fully expecting to make enough profits before he had significant withdrawals. He was never able to make a profit manipulating the market but just figured he didn't quite have enough funds yet. Then, he got hit with a large number of withdrawals at once and realized that if he made all those withdrawals, he'd never be able to be profitable. He still has a pile of money, though not enough to cover all withdrawals, and is not sure what to do with it. Maybe he thinks he can settle with many people for pennies on the dollar and is acquiring his own debt at low cost and hopes that some day soon he can make 100% payouts to everyone who still holds his debt.

I'm not saying I think that's what happened. I'm saying though that there are any number of possible middle positions.

If I had money I could afford to lose, I'd definitely take your bet. I haven't looked at the terms of your bet or the trustworthiness of your agent, but if the terms are as you describe and the agent is trustworthy, I would advise people to take your bet. (After investigating the issued I described about Matthew's bet such as precisely what the conditions of the bet are.)

I am 99.99% convinced Pirate was operating a Ponzi scheme. That is, at least most of the time, interest payments on older deposits were made from newer deposits rather than any actual investment proceeds.

I guess that depends on how generously you want to construe the terms. For example, if the price of Bitcoin drops to $1 in four months and he pays people back the number of Bitcoins owed, does that count as him paying back? If he claims that he has to have copies of driver's licenses to pay back money and the vast majority of his investors are unwilling to do that, and he pays back everyone who submits the precise documentation he demands, does that count as him paying back? If people agree to a 10% payback because that's all it seems like they are likely to get, does that count?

By fair and reasonable criteria, I would put the odds of him paying back at around 1%. The criteria are roughly that his investors don't suffer losses that are significant relative to the amount they invested. The odds that everyone who paid Pirate bitcoins will get at least those bitcoins they deposited back are very, very low.

In that case, yes, because the agreements are different. The sandwich example only shows why indirect payments don't work.

Right, and as PPT operator, you have no incentive to pursue Pirate for those bonds. As the bond holder, you do.

I'm not sure which side to take here, but maybe this will help clarify the issue: Matthew offered his bet after Pirate had already defaulted. Only an additional, subsequent default can cause Matthew to lose his bet. If the loss of additional interest was part of the original default, it cannot cause Matthew to lose his bet unless Pirate agreed to pay it back as part of the terms Matthew bet Pirate would stick to.

I'm only talking about debt corresponding to sold bonds.

I don't think he has a choice. If he reveals his client information to Pirate, what keeps Pirate from trying to negotiate individual settlements with them? He has an obligation to his investors to ensure that any Pirate payments on their collective debt is divided according to his agreement with them. If he lets them contact Pirate individually, how can he comply with his obligation?

He can't stop his customers from contacting Pirate directly, of course. But Pirate paying them directly wouldn't settle his debt with Goat anyway.

If my local sandwich store lets me have a sandwich on credit, I have to pay the shopkeeper back because he's the one who gave me the sandwich. I can't make individual deals with the shop's employers and suppliers and then claim I've settled the debt for the sandwich. The shop owner gets to decide how the money is divided per his agreement with the employers and suppliers. Me settling with them individually would cause the shop owner to be breaching his agreement with his employers and suppliers, which I would have no right to do.

Not true. See my post about intended third party beneficiaries. The PPT operator has no incentive to pursue Pirate, so equity requires the pass through account holders be able to hold Pirate liable for his default to the PPT operator. Pirate's obligation is to the operators, but most likely PPT holders can enforce it due to their standing as creditor beneficiaries.

It has nothing to do with definitions. Saving money consists of earning it and then not doing anything else with it.

The big question is whether you're happy with him passing on other people's details if it harms your chances of recovery.

Doesn't it seem logical that passing through the information reduces the chances of this? If he was going to repay centrally, why does he want everybody's information?

That is complete insanity.

Say I own a catering service. I contract with a shrimp supplier to provide me 150 pounds of shrimp on a particular date at a particular price. Are you saying I shouldn't rely on the supplier to provide me that shrimp? What should I do? Should I also buy 150 pounds of shrimp at the grocery store in case the shrimp supplier doesn't deliver the shrimp?

If the supplier just chooses not to provide me with the shrimp and I wind up being unable to do the catering job, are you saying that's my own fault for relying on the shrimp supplier and that I'm responsible for my own acts?

The whole reason we make agreements with other people is so that we can rely on them! That's the benefit we obtain and that's what we're paying for.

I'm not talking about blaming others for one's own mistakes. I'm talking about blaming people for not doing what they promised to do and the damages proximately caused by us relying on them to do what they promised to do.

When the "bad decision" was trusting someone else to keep their word, you absolutely should blame the other person.

(Not that I think it matters. I would be quite literally stunned if Matthew defaults.)

You earn the interest for earning money. "Saving" means earning money.

Your future intent does not affect the consequences of your actions.

So he's only selling debt that he actually has.

It does.

In this case though, no money is gained from selling those bonds because he's selling them at a loss.

Right, until he turns them into bonds and sells them, which is exactly what he's doing.

I cannot imagine why you think this. The whole purpose of his pass through was to convert his personal Pirate debt into bonds.

He didn't buy them "back", he simply bought them the same way anyone else would buy them.

The reliance is a direct consequence of the bet. Whether or not you "should" do it is irrelevant. The fact is that many people did do and did it as a direct result of the bet.

It is astonishing to me that you would consider earning money to be "doing nothing" but destroying goods to be something worth encouraging.

Yes, saving is investment with Bitcoin. When you save Bitcoins, you've investedwhatever productivity you exchanged for the Bitcoins you saved.

Yes, it is. Except it's just not the banks that do it. If I work at a factory, I produce value. That is value that I "deposit" into the economy. I am fully entitled to "withdraw" based on that production and destroy/consume some of the value I created. But if I save, instead of withdrawing that value, I leave it earning interest in the economy.

The most useful and beneficial investment is usually to labor to produce exactly what people most want without consuming any of the value you produced. That is, saving.