How could Pirate fuck your brains so well that even now many believe in him?

[el_rlee]

Bitcoin is supposed to be the most secure currency, but the way people handle it is like it's monopoly money.
I am surprised on how pro-pirate the atmosphere is still now, on Saturday without pirate paying out anybody.
-Matthew makes a bet about 10kBTC which seams a lot of money for him because he is sure that pirate will pay (and he is still confident at this moment)
-bids for TYGRR-P bonds still range >60% of face value, even with the issuer saying that pirate defaulted
-bitcoinmax accounts are still trading for >60% of their theoretical value
etc..

Is the human soul really made in way that makes it vulnerable for such scams by nature? I presume the pro-pirate users have a normal level of intelligence, so how could they get so brain-washed?
Did anybody follow the tony scam on SR? He fucked them over pretty nice in the forums, it also took some time for them to realize that there won't be anything arriving...

Stockholm syndrome as an explanation is not totally accurate IMHO.

[P4man]

Ive always assumed it to be a ponzi, but if anything, right now Im more inclined to believe pirate will somehow pay out than I was 2 weeks ago.

Why? Matthew might have ahmmm..  issues, but despite what he says, I dont believe he would really risk $100,000 on betting something that appears so unlikely, unless he knows something that we dont.
Bitlane is owed a fair chunk of money by pirate, but yesterday I saw he wanted to buy more debt (presumably, pirate debt). Is he nuts, or does he too now know something we dont?
GPUmax is still running and paying out every day.  

Lots of pirate backers have a large financial interest in everyone else assuming pirate will default, because it allows them to buy up pirate debt at a discount. Pirate might even be buying up his own debt at a discount through these proxies. So the fact he hasnt yet paid out, IMO says nothing.

What i do fear is that if pirate does pay up, it will be in very cheap coins, because I dont believe he could have made the profits that he promised, but perhaps he found a way to manipulate the value of btc that would allow him to pay out such sums in devalued coins. How? I have no idea, but to take an extreme example; assume he has been using his coins to fund some asic farm that has been mining a forked blockchain for a few months now, a chain now longer than the current blockchain. All he has to do is publish it and presto, he can pay out any amount of coins he wants. Im not saying I think thats whats happening, but something along those lines.

[el_rlee]

you're down the bitcoin rabbit hole way too deep. take a step back, look back in history, what is more likely to happen?

[istar]

And as I said in speculation. All it takes to bring value down to $1.25 is 370,000 Btc. In fact probably even way less as people panic on the way down.

Then buy lots of cheap coins at <$1 pay back the Bitcoins, profit and laugh.

[P4man]

And as I said in speculation. All it takes to bring value down to $1.25 is 370,000 Btc. In fact probably even way less as people panic on the way down.

Then buy lots of cheap coins at <$1 pay back the Bitcoins, profit and laugh.

It doesnt work like that. You can crash the price by selling that many coins, but you cant buy back even more coins later without the price shooting up again, way above the point you sold yours.

[el_rlee]

I would wish for Mr. Pirate to bring BTC down to such a value. I would buy loads of those cheap coins.

[Nubarius]

And as I said in speculation. All it takes to bring value down to $1.25 is 370,000 Btc. In fact probably even way less as people panic on the way down.

Then buy lots of cheap coins at <$1 pay back the Bitcoins, profit and laugh.

It doesnt work like that. You can crash the price by selling that many coins, but you cant buy back even more coins later without the price shooting up again, way above the point you sold yours.

Exactly. Pirate seems to have thought along the lines of istar's argument, basically expecting that by owning an insane amount of bitcoins he could bring the price down, make everybody panic and then buy cheaply. What he did't take into account was that there is an upward momentum in favour of Bitcoin as more and more people around the world learn about it and become interested. Any downward movement in the price finds the resistance of newcomers buying bitcoins and staunch believers in the long-term value of Bitcoin, like myself, who keep on buying. Besides, in order to give the crazy interest he promised, he'd have to eventually buy more bitcoins than he originally sold.

So my impression is that Pirate was basically betting that the selling panic he could cause in the market would be big enough to offset the subsequent appreciation when he came back to buy. He basically thought he could manipulate the market, took a huge gamble, and lost.

People believe him because they want to believe him. It's easier on one's ego to think that you're clever enough to invest in other clever people's business models than to accept that you've been duped by one of the silliest Ponzi schemes ever.

[bitcats]

Bitlane is owed a fair chunk of money by pirate, but yesterday I saw he wanted to buy more debt (presumably, pirate debt). Is he nuts, or does he too now know something we dont?

Didnt you know that Bitlane is one of Pirates sockpuppets? Hes very skillfully manipulating the market.

[markm]

And as I said in speculation. All it takes to bring value down to $1.25 is 370,000 Btc. In fact probably even way less as people panic on the way down.

Then buy lots of cheap coins at <$1 pay back the Bitcoins, profit and laugh.

It doesnt work like that. You can crash the price by selling that many coins, but you cant buy back even more coins later without the price shooting up again, way above the point you sold yours.

The Brits and Canucks discovered this, much to their surprise, when they tried to manipulate prices to achieve GBP parity for the UKB (United Kingdom Britcoin) and CAD parity for the CDN (Canadian Digital Note). Selling off coins cheap just ends up with everyone else holding the coins you sold, and the price climbing way above your target price again whenever you stop throwing away your coins. NKL (bitNicKeLs) also tried it to some extent, partly perhaps due to pressure from the Brits and Canadians arguing that maybe it was the rising price of bitNicKeLs, combined with people's tendency to think a nickel should be a twentieth of a something (whether 1/20 CDN, 1/20 UKB, or even 1/20 BTC), that was spoiling their attempts at keeping UKB and CDN from rising too high. It just doesn't seem to work...

-MarkM-

[el_rlee]

People believe him because they want to believe him. It's easier on one's ego to think that you're clever enough to invest in other clever people's business models than to accept that you've been duped by one of the silliest Ponzi schemes ever.

This might be it.

I read an interesting interview with a prison director. He said from all the prisoners the least comprehensible are the white-collar criminals. They always live in their own thought world were they find a million reasons why they are innocent and the other people are all wrong.
So maybe (probably?) we will find many users here finding some excuse of why pirate didn't pay even after weeks...

[Technomage]

It's actually common for ponzi scheme victims to believe that the money will be payed back years after the collapse.

In this case it would be strange because he isn't a real life character except for the people who met him at Vegas.

All he has is internet charisma, but I guess that can go a long way these days.

[salty]

The Brits and Canucks discovered this, much to their surprise, when they tried to manipulate prices to achieve GBP parity for the UKB (United Kingdom Britcoin) and CAD parity for the CDN (Canadian Digital Note). Selling off coins cheap just ends up with everyone else holding the coins you sold, and the price climbing way above your target price again whenever you stop throwing away your coins. NKL (bitNicKeLs) also tried it to some extent, partly perhaps due to pressure from the Brits and Canadians arguing that maybe it was the rising price of nitNicKeLs, combined with people's tendency to think a nickel should be a twentieth of a something (whether 1/20 CDN, 1/20 UKB, or even 1/20 BTC), that was spoiling their attempts at keeping UKB and CDN from rising too high. It just doesn't seem to work...

-MarkM-

Source?

[markm]

The Brits and Canucks discovered this, much to their surprise, when they tried to manipulate prices to achieve GBP parity for the UKB (United Kingdom Britcoin) and CAD parity for the CDN (Canadian Digital Note). Selling off coins cheap just ends up with everyone else holding the coins you sold, and the price climbing way above your target price again whenever you stop throwing away your coins. NKL (bitNicKeLs) also tried it to some extent, partly perhaps due to pressure from the Brits and Canadians arguing that maybe it was the rising price of nitNicKeLs, combined with people's tendency to think a nickel should be a twentieth of a something (whether 1/20 CDN, 1/20 UKB, or even 1/20 BTC), that was spoiling their attempts at keeping UKB and CDN from rising too high. It just doesn't seem to work...

-MarkM-

Source?

I don't have blow by blow archives from way back then; I only began keeping snapshots of historical data a while ago and only recently started making some quick and dirty scripts to put the data into HTML table form so I could look at it using a web browser. Its just a simple start, made actually for my own use so I can look at the numbers: http://galaxies.mygamesonline.org/digitalisassets.html

-MarkM-

[Herodes]

Is the human soul really made in way that makes it vulnerable for such scams by nature?

It appears so. The same thing we say about Pirate is the same thing we could say about many politicians around the world.

But do we know for a fact how much money was invested with Pirate ? I hear figures of 500K BTC, but I haven't seen conclusive evidence to this.

The moral aspect put aside, it must be nerve wrecking to live with the knowledge that if you only did a single mistake, or didn't hide all your tracks well, then suddenly one day there may be someone on your doorstep that will put an end to your misery. Not saying that I condone anything like that, or that I would like to see it happen, but if you fuck the wrong people over, they will not ask nicely to have you rectify the situation.

And the day it happens, it will be all over the news: "Killed over Pirate money". (No phun intended).

[salty]

I don't have blow by blow archives from way back then; I only began keeping snapshots of historical data a while ago and only recently started making some quick and dirty scripts to put the data into HTML table form so I could look at it using a web browser. Its just a simple start, made actually for my own use so I can look at the numbers: http://galaxies.mygamesonline.org/digitalisassets.html

-MarkM-

Cheers.

[Grinder]

But do we know for a fact how much money was invested with Pirate ? I hear figures of 500K BTC, but I haven't seen conclusive evidence to this.

We have no idea. The 500K is based on the last dividend calculation, but of course that includes a lot of compound interest. Schemes like this also usually have a lot of false accounts to give the impression that lots of people believe in it. The best real indication I have seen is this message from greyhawk: https://bitcointalk.org/index.php?topic=102107.msg1124122#msg1124122

So about 70 000. That may be a completely false lead, though, if they for instance have been put through MtGox.

[BitCoinsLOL]

 How did Pirate get some many people to give him BTC without revealing his so called method for promising 7% weekly returns. I'm sure plenty of people were willing to gamble with small amounts and not really mind losing knowing something aint kosher here. Those who invested larger amounts were doing it out of blind faith unless they knew Pirate. I feel alot of scams will be weeded out as time goes on because BTC is still in it's early stage. I hope Pirate pays back everyone and my belief is he/she will.

[DeathAndTaxes]

But do we know for a fact how much money was invested with Pirate ? I hear figures of 500K BTC, but I haven't seen conclusive evidence to this.

We have no idea. The 500K is based on the last dividend calculation, but of course that includes a lot of compound interest. Schemes like this also usually have a lot of false accounts to give the impression that lots of people believe in it. The best real indication I have seen is this message from greyhawk: https://bitcointalk.org/index.php?topic=102107.msg1124122#msg1124122

Also even if the 500K was accurate (although it would be more like 540,000 now due to another 8 days of interest) the ponzi has been running for months now.  
The amount of coins actual invested is obviously much less.   If may be 100K BTC were put at risk and the 540,000 BTC simply represents imaginary paper profits that simply never existed.

Since the amount deposited grew over time, and had withdraws finding out exactly how many coins were deposited would require access to the books but as a hypothetical example.

"Simple Example Ponzi"
100K deposited on day 0.  7% per week.  No withdrawals allowed for 12 weeks.

After 12 weeks the "value" of all deposits on paper is 225K however at no point did more than 100K BTC ever exist.  At best there is 100K BTC but if the Ponzi operator paid him some of that "profit" then the scheme would have less funds.  It shows the futility of buying ponzi assets for even 50% on face value because the face value is highly inflated.  In this hypothetical example the reality is every balance needs a 60% haircut just to get inline with reality.  The buyer is taking a risk so the selling price should be discounted not from the face value but the from real value (40% of face).  In a real ponzi where the operator is skimming off the top and some withdrawals are made the amount of coins available at the end (even if the operator decides to not steal them) is likely an even smaller fraction.  Maybe 10% of the face value.

[barbarousrelic]

I've got to admit I am a little embarrassed at the Bitcoin community's gullibility to such an obvious scam.

[markm]

I've got to admit I am a little embarrassed at the Bitcoin community's gullibility to such an obvious scam.

So basically never attribute to collusion that which can be passed off as ignorance / stupidity / foolishness / being a victim?

(Oh look, a ponzi! Better get in quick, get my capital out fast, and make sure to suck in lots of other people who if they follow me in fast enough might even also manage to turn a profit on it... Oh, wait, almost forgot, pretend I didn't recognise it as a ponzi!)

-MarkM-