#BTCST Updates. Latest: August 28th 6:16PM EST

[Phinnaeus Gage]

Pirate's almost halfway cashed out 

http://blockchain.info/charts/balance?address=1DkyBEKt5S2GDtv7aQw6rQepAvnsRyHoYM

i have not seen solid evidence that is pirate's wallet. after all, how does one get 500K in BTC and
magically pay interest without touching that original 500K? Some type of business? Doubtful.

Notice how it just kept going up for the most part.

Simple math! You only deposit 93% of the take into the main account. (or something like that)

[1714104055]

1714104055

[1714104055]

1714104055

[repentance]

Pirate's almost halfway cashed out 

http://blockchain.info/charts/balance?address=1DkyBEKt5S2GDtv7aQw6rQepAvnsRyHoYM

i have not seen solid evidence that is pirate's wallet. after all, how does one get 500K in BTC and
magically pay interest without touching that original 500K? Some type of business? Doubtful.

Notice how it just kept going up for the most part.

If you pull in more in deposits than you pay out (not keep compounding) in interest, you can always deposit the excess in your cold wallet without withdrawing. Of course, is that was the case Pirate's paper liabilities must be over BTC1M.

Except that pirate maintained that he was selling the Bitcoins his lenders were giving him, which means they'd need to leave the wallet.  He also said that BS&T and GPUMax used the same wallet - have any GPUMax payments come from that address? 

[MrTeal]

Pirate's almost halfway cashed out 

http://blockchain.info/charts/balance?address=1DkyBEKt5S2GDtv7aQw6rQepAvnsRyHoYM

i have not seen solid evidence that is pirate's wallet. after all, how does one get 500K in BTC and
magically pay interest without touching that original 500K? Some type of business? Doubtful.

Notice how it just kept going up for the most part.

If you pull in more in deposits than you pay out (not keep compounding) in interest, you can always deposit the excess in your cold wallet without withdrawing. Of course, is that was the case Pirate's paper liabilities must be over BTC1M.

Except that pirate maintained that he was selling the Bitcoins his lenders were giving him, which means they'd need to leave the wallet.  He also said that BS&T and GPUMax used the same wallet - have any GPUMax payments come from that address? 

Wel yeah, if Pirate was running his operation like people describe, then that wouldn't make sense. That above as describing how that could be Pirate's wallet if he was running a ponzi.

[Grinder]

Wel yeah, if Pirate was running his operation like people describe, then that wouldn't make sense. That above as describing how that could be Pirate's wallet if he was running a ponzi.

It doesn't make sense either way. It has many more coins than he would have if it is a ponzi, and too little usage if he was running a secret trading service.

[P4man]

It doesn't make sense either way. It has many more coins than he would have if it is a ponzi,

Why do you say that? Keep in mind that  the bulk of investors most likely compounded their interests. If you believed pirate was legit, it would be almost silly not to.  Precious few coins would therefore have to leave that wallet.

[repentance]

It doesn't make sense either way. It has many more coins than he would have if it is a ponzi,

Why do you say that? Keep in mind that  the bulk of investors most likely compounded their interests. If you believed pirate was legit, it would be almost silly not to.  Precious few coins would therefore have to leave that wallet.

pirate said he maintained several wallets.  The PPT operators would be able to confirm whether they ever sent funds to the wallet in question.

[Shadow383]

It doesn't make sense either way. It has many more coins than he would have if it is a ponzi,

Why do you say that? Keep in mind that  the bulk of investors most likely compounded their interests. If you believed pirate was legit, it would be almost silly not to.  Precious few coins would therefore have to leave that wallet.

pirate said he maintained several wallets.  The PPT operators would be able to confirm whether they ever sent funds to the wallet in question.

Given that most funds were reinvested and there appeared to be a net inflow every week, he could maintain a buffer somewhere else whilst diverting any coins he didn't need to make that week's interest payments to this massive cold storage address.

Furthermore, remember when pirate claimed to be crashing the market, and brought BTC price down from $9 to $7.50?
There are 80K BTC of withdrawals from that wallet that coincide perfectly with that event 

Also, now that BS&T is gone the funds from that wallet are slowly disappearing into various mixing services - Is it that hard to believe?

[Grinder]

Why do you say that? Keep in mind that  the bulk of investors most likely compounded their interests. If you believed pirate was legit, it would be almost silly not to.  Precious few coins would therefore have to leave that wallet.

Because all the explanations to how he would earn so much involves buying and selling bitcoins. In this wallet they are just sitting there. The buying and selling explanations don't really make sense in the first place, but they make even less sense if his clients never even get any coins. The sum of the accounts is just a number in any investment fund or bank. The invested money doesn't just sit in an account that magically increases. They are being invested in shares and whatever, or lended to other customers.

[P4man]

Because all the explanations to how he would earn so much involves buying and selling bitcoins. In this wallet they are just sitting there.

You ignore the most plausible explanation; namely that he didnt earn any money at all and was just operating a ponzi. That correlates perfectly with what you see with that wallet.

[Grinder]

You ignore the most plausible explanation; namely that he didnt earn any money at all and was just operating a ponzi. That correlates perfectly with what you see with that wallet.

No, I said there were too much money for that. There was a message somewhere that said how much interest he was paying for one week, and if that number was right the base sum would be about 500 000 BTC when he defaulted. That includes a lot of compound interest, so the total sum people have sent to him and not withdrawn would be perhaps 100-150k. This wallet has much more than that.

[repentance]

Because all the explanations to how he would earn so much involves buying and selling bitcoins. In this wallet they are just sitting there.

You ignore the most plausible explanation; namely that he didnt earn any money at all and was just operating a ponzi. That correlates perfectly with what you see with that wallet.

I don't really doubt that he was running a ponzi (or a variation thereof).  I'm just not sure why he would choose to hold his ill-gotten gains in BTC for any length of time knowing that when he pulled the plug he'd have a large number of coins to liquidate.

[Shadow383]

You ignore the most plausible explanation; namely that he didnt earn any money at all and was just operating a ponzi. That correlates perfectly with what you see with that wallet.

No, I said there were too much money for that. There was a message somewhere that said how much interest he was paying for one week, and if that number was right the base sum would be about 500 000 BTC when he defaulted. That includes a lot of compound interest, so the total sum people have sent to him and not withdrawn would be perhaps 100-150k. This wallet has much more than that.

I think we can work on the assumption that the guy running the massive ponzi scheme might have... lied 

[P4man]

You ignore the most plausible explanation; namely that he didnt earn any money at all and was just operating a ponzi. That correlates perfectly with what you see with that wallet.

No, I said there were too much money for that. There was a message somewhere that said how much interest he was paying for one week, and if that number was right the base sum would be about 500 000 BTC when he defaulted. That includes a lot of compound interest, so the total sum people have sent to him and not withdrawn would be perhaps 100-150k. This wallet has much more than that.

AFAIK the estimate was made on interest payments that actually went out, ie, not reinvested. Using that to guess the total size of this might vastly underestimate the actual deposits if the bulk of it was  being reinvested.

[ErebusBat]

I'm just not sure why he would choose to hold his ill-gotten gains in BTC for any length of time knowing that when he pulled the plug he'd have a large number of coins to liquidate.

Unless he is long bitcoins...  if he didn't want/need the fiat immediately and he believes that their value will increase this makes sense.

Also if he had liquidated them in the past through gox then you can bet you ass they would have some sort of paper trail on him.

[TangibleCryptography]

It doesn't make sense either way. It has many more coins than he would have if it is a ponzi,

Why do you say that? Keep in mind that  the bulk of investors most likely compounded their interests. If you believed pirate was legit, it would be almost silly not to.  Precious few coins would therefore have to leave that wallet.

Well the compounded interest is just paper dragons.  If Pirates claim of 500K is correct and most users compounded the amount of true deposits is probably closer to 220K or less.  Some users likely did withdraw principal and interest lets say ~15% that would put the value of the actual coins ~180K vs 500K owed. 

[P4man]

the compounded interest is just paper dragons.  If Pirates claim of 500K is correct and most users compounded the amount of true deposits is probably closer to 220K or less.  Some users likely did withdraw principal and interest lets say ~15% that would put the value of the actual coins ~180K vs 500K owed. 

I dont think Pirate ever claimed 500K. I think people noticed a pattern in blockchain that matched his interest payouts and worked out a number based on that.

[TangibleCryptography]

No he did; in IRC at the time of closing.  Now he may have been full of shit but all the guesstimates and theories were based on that.

Also dammit I used the wrong account to post that & this.

[P4man]

No he did; in IRC at the time of closing.  Now he may have been full of shit but all the guesstimates and theories were based on that.

I missed that then. Then again, it seems entirely plausible Pirate would refer to the number of coins in his wallet(s) instead of the principals + fictional accumulated interest.

[Micon]

No he did; in IRC at the time of closing.  Now he may have been full of shit but all the guesstimates and theories were based on that.

I missed that then. Then again, it seems entirely plausible Pirate would refer to the number of coins in his wallet(s) instead of the principals + fictional accumulated interest.

yup.  He was talking about how much he got away with.

That bad boy:  https://bitcointalk.org/index.php?topic=94675.0   had 500k ish BTC in it, the wallet was built over the course of 2012.

Best fit numbers for this scam:

1,000,000 BTC on paper

~700k BTC collected

~200k BTC paid out in interest over this year, most of it last 3-6 weeks

~500k BTC left when he now owes ~70k/wk BTC on paper,  some will take only interest out, most leave it in, but then with the interest takers + a few principal withdraws, the writing was on the wall for Pirate that he'd be broke in just a few short weeks of interest + withdraws, so just stop now with 500k+ BTC.

[repentance]

I'm just not sure why he would choose to hold his ill-gotten gains in BTC for any length of time knowing that when he pulled the plug he'd have a large number of coins to liquidate.

Unless he is long bitcoins...  if he didn't want/need the fiat immediately and he believes that their value will increase this makes sense.

Also if he had liquidated them in the past through gox then you can bet you ass they would have some sort of paper trail on him.

I'm assuming that if it was a con he would liquidate OTC as BTC came in and not try to hold them hoping for a price increase.  Then again, I doubt anyone executes a con perfectly.