2) So much growth he doesn't seem to have a need to control how much inflow of investors there are? Opening up to the public with seemingly no limits or buy in rounds? I know this is an "internet" business but I thought the dotcom bubble and now facebook would have killed the idea of such growth.
There wasn't unbounded growth. There were people that weren't ever going to invest with Pirate. There were people that were only going to invest X with Pirate. Still others couldn't afford to buy more coins because they ran out of funds and/or the price was goin gup past their preferred purchase point. That only leaves the new coins from mining and obviously, that's limited as well too. |
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And since as of late the questions seem to be directly posed at me, I'd like to say I don't speak for Pirate, nor have I talked to Pirate in the last day. The last time I talked with Pirate was in his IRC channel for the Q&A with everyone.
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Do you really think there is a never ending line of rich fools out there lining up to buy bitcoins at over inflated prices week after week? I think there are more than you're willing to give credit. Further,by compounding the interest they would need to increase their appetite for btc or he would need to find increasingly more and more rich fools.
Please point me to a solid number that was verified by Maged or someone else reputable that indicates just how much was actually reinvested, because AFAIK, nobody really knows that answer. |
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I do think it's a viable business idea on some level. I believed it at one point, mostly because I wanted to believe.
But it's the volume of BTCST plus the extraordinary interest rates (over such a long time) that make me unable to believe it.
Possible, maybe. I just don't think that is what is actually taking place. If it weren't for my new bet, I would like to be wrong.
It's also very easy for a legitimate investment scheme to slip over into the realm of ponzi. I do tend to think it was a scam from the start, and that this business idea is the only one Pirate could propagate to justify borrowing so many coins. It was only a matter of time before someone realized how simple a bitcoin ponzi scheme would be to pull off. Inevitable.
Yes, saying D&T is "missing it" is pretty flippant. If that was his model: 1. Why was Pirate's appetite for more BTC seemingly insatiable, until he closed? 2. How was he able to promise consistent returns for such a long period of time? 3. Why has he not publicly stated interest compounding has ceased? 4. What is it about this claimed trading model that has left him seemingly short of quite a bit of BTC a week after closing? I see being 'dense' goes both ways, because I already answered 1) a few posts up. 2) I expect business growth. 3) I can just imagine the additional stink people would make if he didn't pay total the interest due on things. I know its a drop in the bucket compared to the principal. It may have also just been an oversight. I really don't know, he hasn't told me. 4) If he sells coins to investor Y at say $10, coins that weren't really his, but coins that he borrowed off you and I, he must return the coins to us. In the past, the coins were slowly appreciating, so once they hit $11, investor Y would sell. Well, he announced the closure and the price tanked. So now investor Y doesn't want to sell. Sure, pirate's got cash he could buy coins. We all know trying to buying a bunch of coins on gox is going ot make the price jump like a SOB so that's a terrible option. Meanwhile, investor Y's pissed that he's taking a loss. Perhaps the contract from pirate guaranteed a certain minimum price for X amount of days. A whole slew of scenarios could be there. Regardless, the sudden closure has thrown a wrench in things. Probably an overreaction on pirate's part, but Monday morning quarterbacks always pick the right play. |
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Out of curiosity imsaguy...
1) How do you pronounce your name? I keep pronouncing it like I'ms (or Iams, like the dog food) A Guy
2) At this point, given the long delay and minimal communication do you think Pirate will be able to pay out the rapidly increasing debt he owes as per the terms of his post (principle + interest to the hour)?
1) Illinois Math and Science Academy (IMSA) 2) I've said and continue to say that I am going by the terms of the Vandroy bet which has a deadline of Wednesday if I'm not mitaken. When the bet was made, it seemed no one had issues with the terms, so if both sides signed off on it, I should be ok with it as well. It is frustrating to not have any information, but outside of filing legal action, there's not a lot I can do. Most lawyers (hell, even the credit bureaus) won't touch any sort of default until at least 30 days have passed, so it seems prudent to wait and see. So to answer your question directly, the longer things go, the lower my expectations. |
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Nobody thought it strange he never capped deposits?
Nobody thought it strange he never paid down the principal?
Nobody throght it strainge his funding requirements never changed? 1 and 3 are the big warning signs for me. Why a single, uncapped fund? Unless he could place the ever-increasing amount of BTC in his fund at 10% every single week and the interest he was receiving was being compounded, his scheme couldn't be sustained. But if the demand was predictable, then why weren't the loans fixed term (even if that term was short)? How was he protecting himself against a sudden decrease in demand or against someone else offering his clients a similar service for less? How was he hedging his risk? Were his clients repaying interest only? If so, when was the principal due to be returned? What allowance had he made for his clients defaulting? Why wasn't he trying to entice the hoarders who are still sitting on large amount of BTC which barely ever move? These are all questions to be asked the next time a similar scheme comes along - and it will. I do think there are circumstances under which people will both buy and borrow at a premium, but when that appears to be happening on a large scale I think it's probably wise to curb one's enthusiasm and ask some difficult questions before assuming you've discovered the goose which lays the golden egg. The theory that I've always thought for this is: There are 50*6*24=7200 new btc per day. If pirate wanted to control the market price, he'd need to control a certain percentage of the market. The open deposit policy was a way to suck up those new btc. Obviously he had to continue to expand things to cover for that, but that is probably part of the reason 1) he was lowering rates a bit (even if people argue he really wasn't) and 2) he said he didn't know how long it would go on. Anyone that thought that 7% would continue for years is sadly mistaken. When I see the exponential formulas that people want to throw around and they're extrapolated to anything more than 18 months, I just write them off as trolling. |
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@nedbert9
I have get 168 shares during this hack @0.085 per share. I would like to give 0.00388888BTC*168=0.64BTC to you.
please give me your GLBSE account.
I guess the bitcoin transfer between GLBSE accounts is free, right? who can give me a confirmation.
bitcoin transfer is free, shares aren't. |
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You all are dumber than a box of fraking hammers.
One:
No rich idiots exist that buy 10% over price. Period. Certainly not enough to move 500K BTC a week every week into perpetuity.
You're already missing it. No the only thing that is missing is your money. It is gone because you are even stupider (if that was the theory you invested your funds on) than the ones who were just clueless. Most of them were just gambling. If you thought that theory made sense then please find a broker. Please please because with investing "skills" like that you are going to need a good one. You aren't adding anything to this conversation but personal attacks. To the ignore you go. |
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One:
No rich idiots exist that buy 10% over price. Period. Certainly not enough to move 500K BTC a week every week into perpetuity.
I disagree. Look at the spread that coinabul charges. It is closer to 20%. Um that is why coinabul isn't moving $5M in gold a week. Hell they probably aren't moving $5M in gold this year. Poor execution. Does the owner even leave mommy's basement? |
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You all are dumber than a box of fraking hammers.
One:
No rich idiots exist that buy 10% over price. Period. Certainly not enough to move 500K BTC a week every week into perpetuity.
You're already missing it. |
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If you can imagine all the investors standing on an island it looks like pirateat40 standing at the wheel of the pirate ship and the PPT operators are swabbing the decks. Now the PPT operators are claiming they were never on the pirate ship when their are pictures of them sailing the high seas with the captain  I have not ever met Pirate IRL. I was supposed to meet him in Vegas, but ended up sick while out there and leaving without meeting anyone but the few people I had met earlier in the week to exchange coins with. Those parties did confirm the trades, either here or in #bitcoin-otc. |
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When I first joined #bitcoin-otc, I did a crapton of trading. I did a bunch of moneypaks to btc and back. Basically, playing market maker for whomever needed to move. Pirate joined around the same time as me, a few days earlier if I'm not mistaken. He was doing much the same thing. As a result, it was inevitable for us to end up trading. At various times, we each would come up with some big fish (or so it seemed at the time) and would help each other out with sourcing coins or finding coins good homes. All of these trades were always online, with random people that would join #bitcoin-otc. Eventually, pirate had some 'IRL' customers and it seemed they were larger than your typical moneypak transactions. Eventually, I got into mining rather than trading because of a few bad moneypaks that someone screwed me with. It seemed safer and less time intensive. Meanwhile, pirate seemed to be branching out his trading and there were times where he needed to borrow coins. When trading, you'd try to line up the incoming with the outgoing to minimize exchange risk and maximize profit, but then sometimes things go weird with one side or whatever and a person would end up needing to borrow. It happened to me at times in the past so I didn't think anything of it to loan out. Time went on, the lending became more regular and one thing leads to another and we end up here. Pirate never really told me what he was doing but I felt I had a good grasp of what was going on. The dip in and out of two transactions could make 10% pretty easy (5% on both sides, sometimes much more than that) so 7% actually seemed fair.
There is a small bit more, but pretty much my understanding. Also, you can see how hard it would be to unwind this. If this was the primary source of Pirate's income, wouldn't it imply that at 10% fee per trade he is doing 350k in trading per week? That's almost 2/3rds of MtGox's volume. I never sourced my coins on gox. When he and I traded, afaik, neither did he. We knew large miners, etc that had coins and were looking to sell. |
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I agree that anyone expecting extra consideration from an uninsured pass through is mainly in denial or trying to pass the buck. But I think it's about time for people who said they "knew what pirate was doing" to step up and either say "nah I was just fronting for pirate" or reveal the information they claimed to possess.
I don't think this is unreasonable. Even if pirate spun a plausible line of bullshit about his business model, I'm interested in hearing why people were willing to trust him with large amounts of money without investigating his prior business background, references, etc. Anyone can claim anything on the internet. What did pirate say which convinced people that he, personally - as opposed to his business model - was both trustworthy and competent? What evidence did people ask for of his competence and worthiness of trust? A plausible business model is no guarantee that someone isn't just going to run off with your funds, so I don't think that can be the only reason the "institutional" investors placed their funds with pirate (or at least I hope it's not, because it would be hopelessly naive not to research the person behind the offer). Here's a post I made a bit ago: Investing in stocks or shares is one thing. A startup company is telling you "give me money so our business may succeed and we'll all earn good money". You make the decision to invest or not invest based on your judgment whether the expected returns on the investment is positive in the light of the viability of the business model, the state of the market, etc. And now for a reasonable answer: When I started loaning coins to pirate, it was much smaller, with only a handful of people. He never promised this would continue forever. Over time, its grown but pirate's not done anything contrary to what he originally said and given me any real cause to not trust him. Now, there's a bunch of people coming into this late in the game, claiming to have insight that others just can't see because they're "idiots". Even if it was gambling, that's my right and often times, venture capital is gambling, even with the best of knowledge. To call me an idiot because I partake is well within your right, but it doesn't make you correct. and to further expand.. When I first joined #bitcoin-otc, I did a crapton of trading. I did a bunch of moneypaks to btc and back. Basically, playing market maker for whomever needed to move. Pirate joined around the same time as me, a few days earlier if I'm not mistaken. He was doing much the same thing. As a result, it was inevitable for us to end up trading. At various times, we each would come up with some big fish (or so it seemed at the time) and would help each other out with sourcing coins or finding coins good homes. All of these trades were always online, with random people that would join #bitcoin-otc. Eventually, pirate had some 'IRL' customers and it seemed they were larger than your typical moneypak transactions. Eventually, I got into mining rather than trading because of a few bad moneypaks that someone screwed me with. It seemed safer and less time intensive. Meanwhile, pirate seemed to be branching out his trading and there were times where he needed to borrow coins. When trading, you'd try to line up the incoming with the outgoing to minimize exchange risk and maximize profit, but then sometimes things go weird with one side or whatever and a person would end up needing to borrow. It happened to me at times in the past so I didn't think anything of it to loan out. Time went on, the lending became more regular and one thing leads to another and we end up here. Pirate never really told me what he was doing but I felt I had a good grasp of what was going on. The dip in and out of two transactions could make 10% pretty easy (5% on both sides, sometimes much more than that) so 7% actually seemed fair. |
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Finally, got my 2215 btc interest paid in full... about to sell now while it's still high in value.
tx id or it didn't happen. |
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I actually asked Maged at one point to post it, because obviously, if there's something that can prove something besides hunches and coincidences, it should be brought to light. He basically replied back about how he didn't have anything definite or something along those lines (my memory fails me, I'm looking for the thread/post).
I also have yet to get a response from him after asking about his 'proof' as well. As soon as I brought it up and suggested that evidence would change my stance, there were no more replies. "Proof" only exists in mathematics; it isn't required in a court of law. There is plenty of evidence. And everyone knows it -- even you and your ilk, no matter how much you try to pretend. That is what I was asking him to provide. |
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Weird how quiet it's gotten on this thread now that it's increasingly clear OP is basically right on the big one.
Potentially. Should GPUMAX stop paying out, I'd call the show over and done. I am perturbed by the delay, although it was counterproductive for Pirate to announce his move to close the operation before preparing for it. Right now it's wait-and-see. If you've been following #btcst you'd know that he hasn't disappeared, and has stated his willingness to sacrifice his own profit soon if he can't make progress with the initial plan. Talk is cheap, but we'll see. As far as I'm concerned, Maged has been more disingenuous by proclaiming evidence that supposedly proves BTCS&T was a fraudulent operation, yet refusing to supply said evidence. If it does turn out that Pirate ran a scam, Micon and most of Team Ponzi were just on a crusade to save people from themselves, but Maged may have had sufficient material to establish proof. To me, that would be a lesser version of withholding the cure for a virulent plague that wipes out a large percentage of the population. I actually asked Maged at one point to post it, because obviously, if there's something that can prove something besides hunches and coincidences, it should be brought to light. He basically replied back about how he didn't have anything definite or something along those lines (my memory fails me, I'm looking for the thread/post). |
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No you don't because that is complete and pure hyperbole. Not a single person has calimed they will engage in vigilantism and even if they did that would be what 1 (or a handful) out of tens of thousands.
I've actually reported several over the last few days and the forum mods seem to be cleaning them up pretty quick. LOL, RolloPollyBrownShit guy put up a bounty on me today. Mods deleted it. Yeah. I've seen a lot of posts disappear lately like that. So to say the threats aren't happening is probably a misguided. You just have to be in the right place at the right time before ninja maged gets them. |
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No you don't because that is complete and pure hyperbole. Not a single person has calimed they will engage in vigilantism and even if they did that would be what 1 (or a handful) out of tens of thousands.
I've actually reported several over the last few days and the forum mods seem to be cleaning them up pretty quick. |
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you see the 100k BTC xfer he just made? that's likely heading to Gox, which he will then fuck the market a little by dumping it, getting yet another ~ $1M USD for his scam.
I wouldn't assume that these 100K are headed for liquidation at Gox, (unless Pirateat40 controls 100 or so Gox accounts, which is unlikely) since this is now stolen money, and since that would be a bit transparent. I thought Gox was capable of blacklisting coins. Why don't they track the coins now? That way they would't let him cash out the stolen coins. Does gox consider them stolen? |
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When I was young, I, too, wrote bad checks, some of which were by accident, and most of which I resolved.   |
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