Did pirate default? IRC Chat Log inside!!

[LoupGaroux]

Wow! What an expert on all things internetish. Good to know that the internet, which was conceived, developed, implemented, and opened up to the public at large by 40+ year old dudes couldn't possibly be fathomed by those selfsame oldsters. Not with you hip young geniuses around, no siree. With you punks on the case nothing bad would ever happen.

Although, like a true child, you have gone off making ignorant statements without any grounding in truth and added exactly nothing to the discussion at hand. Get back on topic you ignorant little shithead- that being the question of pirate's default yea or nay? Do you have any cogent thoughts on something relevant or do you want to stay stuck in your little homoerotic fantasy world talking about anal rape?

[bitlane]

He will be the first one on the forum talking about how badass he is. While bending over and taking it in the ass while never doing shit. Loudest mouths are the last people to worry about. Dude is some 40+ year old who thinks internet attention is worth 25K+ Should scam him some more with confidence knowing he won't do shit but post about it.

38...and I would gladly come looking for you. I don't hide, as I don't have a reason. You are welcome to meet me face to face and see if your opinion changes.

Another misconception is that everyone here is and was a scrawny little geek first and loudmouth second. Some of us with the biggest mouths have had the most practice backing up what comes out of them and if I was SO unsuccessful, I wouldn't call you out for being an anon little pussy.

Anytime you are interested in having your teeth fed to you, feel free to look me up. I am in Calgary, Alberta, Canada. You want more info ? just ask.

[JoelKatz]

Nope. I'm still not getting it.

For Pirate to continue to profit by selling his debt, it needs to be newly-created debt. The debt of which I am aware that is still selling is pre-existing debt. It's debt he issued some days/weeks/months ago. As it is already in the marketplace, he can benefit from it no further. It is not Pirate that is selling this debt, it is existing owners of Pirate debt.

Perhaps I have just missed notice of a sale of newly-minted Pirate debt. Can you point me to a specific transaction?

It doesn't matter when it was created. So long as he holds it and isn't selling it yet, it's not in the marketplace. He can benefit from it by selling it. The "existing owners of Pirate debt" may well be Pirate.

There are many reasons Pirate may have been acquiring his own debt. It costs him basically nothing. The money just flows back to him. He never pays any interest on debt he holds because he never withdraws. It helps to push up the price of his pass throughs. More demand suggests the market is more confident than it really is and more shares outstanding make the passthrough operators bigger Pirate enthusiasts. And, if he knew he was going to default by cutting off withdrawals abruptly and then stall on repayments, he'd know he could sell them for extra money.

If I were running a Ponzi scheme and had not one shred of honesty and only cared about personal profits, I'd do these things. So if Pirate isn't, he's either more honest or less clever.

I don't think there's any good way we can tell whether this is actually happening or not though.

[jbreher]

I must be slow today. I'm not following this at all. What new debt can he be selling? Do you see others lining up to lend him more? Are there new Pirate securities being issued? What new money is rolling in?

Pirate debt is still selling for more than 0. Pirate can create as much Pirate debt as he wants at a cost of zero to him. Until Pirate debt is completely worthless, Pirate has no incentive to stop selling his own debt.

Nope. I'm still not getting it.

For Pirate to continue to profit by selling his debt, it needs to be newly-created debt. The debt of which I am aware that is still selling is pre-existing debt. It's debt he issued some days/weeks/months ago. As it is already in the marketplace, he can benefit from it no further. It is not Pirate that is selling this debt, it is existing owners of Pirate debt.

Perhaps I have just missed notice of a sale of newly-minted Pirate debt. Can you point me to a specific transaction?

Step 1: Open your database, create a new account with a BTC12345.67 balance.
Step 2: Log in to newly created or already existing sock puppet account on bitcointalk.org
Step 3: Offer to sell BTC12345.67 for BTC2468.
Step 4: Sell BTC2468 on Mt Gox.
Step 5: Repeat x5
Step 6: Buy Corvette Z06

Either I am being _really_dense toady (always a possibility), or you've not thought this through very well. While I will reply in more depth to JoelKatz's post below I do offer the following.

Why would anyone buy debt -- debt aready in default, and highly likely to remain bad debt in perpetuity - from some random sock _who_has_no_way_to_prove_they_own_that_debt_?

What is random sock going to do when asked to show that they own that debt? Tell prospective buyer to talk to pirate for verification?

[jbreher]

For Pirate to continue to profit by selling his debt, it needs to be newly-created debt. The debt of which I am aware that is still selling is pre-existing debt. It's debt he issued some days/weeks/months ago. As it is already in the marketplace, he can benefit from it no further. It is not Pirate that is selling this debt, it is existing owners of Pirate debt.

It is fairly common in ponzi scams to create false accounts to give the illusion of popularity. Other people will be more inclined to invest if they think other people believe it works. This costs him nothing or very little, because the money goes back to himself, and they will never be claimed while the scam runs. If they are in the form of extra shares on GLBSE it would be trivial to sell them at a discount now, and somewhat more work if he's sent them through one of the pass-throughs.

Does anybody have any evidence to suggest that pirate offered any shares on GLBSE? Under his name or any other? Please point.

People invested with Pirate directly, not through the GLBSE, right?

The various pass-throughs may be listed on the GLBSE, but those were offered through people other than Pirate, right?

I could perhaps envision that he may have purchased shares through some of the various pass-throughs. But these would have been purchased at market rates. Now to be sold at distressed rates. Not much of a business plan, if you ask me.

Sure, he could _buy_ passthrough shares at distressed rates. If he had an intention of paying up, this could save him a lot of money in the long haul. Bu that is not the topic of this sub-discussion.

ETA: "...sell them at a discount...". What motivation would he have to do that?

[MrTeal]

I must be slow today. I'm not following this at all. What new debt can he be selling? Do you see others lining up to lend him more? Are there new Pirate securities being issued? What new money is rolling in?

Pirate debt is still selling for more than 0. Pirate can create as much Pirate debt as he wants at a cost of zero to him. Until Pirate debt is completely worthless, Pirate has no incentive to stop selling his own debt.

Nope. I'm still not getting it.

For Pirate to continue to profit by selling his debt, it needs to be newly-created debt. The debt of which I am aware that is still selling is pre-existing debt. It's debt he issued some days/weeks/months ago. As it is already in the marketplace, he can benefit from it no further. It is not Pirate that is selling this debt, it is existing owners of Pirate debt.

Perhaps I have just missed notice of a sale of newly-minted Pirate debt. Can you point me to a specific transaction?

Step 1: Open your database, create a new account with a BTC12345.67 balance.
Step 2: Log in to newly created or already existing sock puppet account on bitcointalk.org
Step 3: Offer to sell BTC12345.67 for BTC2468.
Step 4: Sell BTC2468 on Mt Gox.
Step 5: Repeat x5
Step 6: Buy Corvette Z06

Either I am being _really_dense toady (always a possibility), or you've not thought this through very well. While I will reply in more depth to JoelKatz's post below I do offer the following.

Why would anyone buy debt -- debt aready in default, and highly likely to remain bad debt in perpetuity - from some random sock _who_has_no_way_to_prove_they_own_that_debt_?

What is random sock going to do when asked to show that they own that debt? Tell prospective buyer to talk to pirate for verification?

Show screenshots of their BS&T or allow a view only Teamviewer session of them logging into the account showing the balance?

[jbreher]

Nope. I'm still not getting it.

For Pirate to continue to profit by selling his debt, it needs to be newly-created debt. The debt of which I am aware that is still selling is pre-existing debt. It's debt he issued some days/weeks/months ago. As it is already in the marketplace, he can benefit from it no further. It is not Pirate that is selling this debt, it is existing owners of Pirate debt.

Perhaps I have just missed notice of a sale of newly-minted Pirate debt. Can you point me to a specific transaction?

It doesn't matter when it was created. So long as he holds it and isn't selling it yet, it's not in the marketplace. He can benefit from it by selling it. The "existing owners of Pirate debt" may well be Pirate.

Hmm. To my knowledge, there are two ways Pirate debt entered the market. The first is by depositing directly with Pirate. The second is by investing in a GLBSE-listed PPT, the initial transaction of which was subsequently deposited directly with Pirate by the security issuer. Am I missing anything?

If the debt you speculate that Pirate might be selling is that of the latter form, he would have to have bought it already on the open market. It is already in the marketplace. While I don't know all the intricacies of GLBSE, surely Pirate cannot now be issuing brand new debt through this mechanism, correct? Bypassing all the security issuers?

Which leaves us debt issued directly by Pirate to a creditor. Are you seriously suggesting that people are even today depositing additional coin directly with Pirate? (Even if they did, he stated when he closed up shop that all additional deposits would be immediately returned. Not that I'd want to test the veracity of that claim with my own coins, but he did say it.) More importantly, _who_ would deposit? Point to a transaction?

There are many reasons Pirate may have been acquiring his own debt. It costs him basically nothing. The money just flows back to him. He never pays any interest on debt he holds because he never withdraws. It helps to push up the price of his pass throughs. More demand suggests the market is more confident than it really is and more shares outstanding make the passthrough operators bigger Pirate enthusiasts. And, if he knew he was going to default by cutting off withdrawals abruptly and then stall on repayments, he'd know he could sell them for extra money.

Yes, if he wanted to settle his debt, it wold be prudent for him to purchase as much discounted Pirate debt as he could. But the topic of this discussion is him selling additional newly-minted debt. I still don't see that being tenable.

[jbreher]

Why would anyone buy debt -- debt aready in default, and highly likely to remain bad debt in perpetuity - from some random sock _who_has_no_way_to_prove_they_own_that_debt_?

What is random sock going to do when asked to show that they own that debt? Tell prospective buyer to talk to pirate for verification?

Show screenshots of their BS&T or allow a view only Teamviewer session of them logging into the account showing the balance?

Still not buying it.

Union Carbide owes me money. I can show you a scan of a letter acknowledging the debt. Wanna buy this debt from me for one penny on the dollar?

While Union Carbide doesn't actually owe me squat, this works for reason of example. The relevant point is that there is no way the potential buyer has to check on the veracity of the claim of the potential seller. Even if the debt was real, it could not be verified to be real without the assistance of Pirate hisownbadself.

It's not like it is one of the passthroughs, which have an externally-verifiable chain of custody.

[DeathAndTaxes]

jbreher,

I think you are way overthinking this and missing the obvious.

Say I tell you I want to sell my account (I don't have one but lets pretend I do).  You are suspicious so I let you watch me login to my account through teamviewer.  You see Pirate owes "me" 1000 BTC.  So you buy it from me for 500 BTC.

Now there are two scam possibilities:
a) I am merely a socket puppet for Pirate.  The account is just one made up 10 seconds ago.  It looks legit because it is suppose to look legit.  Pirate knows he won't pay so you bought a worthless account for 500 BTC.  Net profit to Pirate 500 BTC.

b) I am not a sockpuppet but working for Pirate.  He promised me 20% of the value of any fake account I sell to suckers like you.  Same as before but you pay  me 500 BTC, I pay Pirate 400 BTC and keep 100 BTC.  Once again the account you bought is worthless.

If someone right now offers to sell you an account how do you know it isn't really just Pirate or someone working for him?  You don't.

Now for the record I don't think Pirate is that smart.  I don't think he is running this reverse con but he could be.  That is the whole point in a situation like this you have no idea who you are buying from (directly or indirectly) so it may not be a fair sale.  The person selling it to you might already know it is worthless.  Not risky as in Pirate might not pay but absolutely completely worthless as in there is no plan to every pay you a bitcent and that was decided before you ever bought it.

[jbreher]

jbreher,

I think you are way overthinking this and missing the obvious.

Say I tell you I want to sell my account (I don't have one but lets pretend I do).  You are suspicious so I let you watch me login to my account through teamviewer.  You see Pirate owes "me" 1000 BTC.  So you buy it from me for 500 BTC.

Now there are two scam possibilities:
a) I am merely a socket puppet for Pirate.  The account is just one made up 10 seconds ago.  It looks legit because it is suppose to look legit.  Pirate knows he won't pay so you bought a worthless account for 500 BTC.  Net profit to Pirate 500 BTC.

b) I am not a sockpuppet but working for Pirate.  He promised me 20% of the value of any fake account I sell to suckers like you.  Same as before but you pay  me 500 BTC, I pay Pirate 400 BTC and keep 100 BTC.  Once again the account you bought is worthless.

If someone right now offers to sell you an account how do you know it isn't really just Pirate or someone working for him?  You don't.

Now for the record I don't think Pirate is that smart.  I don't think he is running this reverse con but he could be.  That is the whole point in a situation like this you have no idea who you are buying from (directly or indirectly) so it may not be a fair sale.  The person selling it to you might already know it is worthless.  Not risky as in Pirate might not pay but absolutely completely worthless as in there is no plan to every pay you a bitcent and that was decided before you ever bought it.

OK, I concede that this _could_ happen. I don't think it _would_, but that's another story. Any such buyer would be severely at risk.

Here's the problem with your scenario: even if we presume that Pirate is on the up-and-up, he would have no obligation whatsoever to transfer an account from one owner to another.

Try walking into your buddy's bank, with a piece of paper (signed by your buddy) that indicates that you have purchased his savings account at that bank. The bank would rightly laugh you out the door.

There may be some procedures the bank has allowing one party to transfer their savings account to another party (probably not, but...). But you'd have no expectation of this working without first coordinating the conditions and requirements with that bank - ahead of the transaction.

If you've got an open channel to Pirate that allows you to work out the details of such a transfer, that would be one thing. But somehow, I doubt you do.

Again - anyone - please point to a specific instance of Pirate issuing additional newly-minted debt since the 'closing' announcement.

[jbreher]

Or more illustrative - does anyone have any evidence of any direct Pirate debt being sold at discount? Passthroughs don't count. Anyone? Anywhere?

[1l1l11ll1l]

I'm mostly curious about what are the "legalities" and "Real world contracts" he mentions?

There are none. That's just making unverifiable excuses. You're supposed to imagine that because you don't really know what he's doing, there might be circumstances that prevent him from paying people back immediately. He's hoping you'll make up the excuses you find most plausible, that way he doesn't have to figure out an excuse everyone believes.

Also, if somebody could explain me that sentence, I'm not sure if I understand it correctly:
"I'm going to be forced to pay everyone at once"

Does this mean paying everybody as soon as possible? Or does that mean paying everybody in one shot?

It means he's asking for the maximum stall time you're willing to give him. The idea is to induce people to wait as long as they would be willing to wait for a full payback by promising that he'll pay everything at once. It's a classic tactic.

Say you owe me $1,000 and $50 is due now. I'm mad at you. You say, "I'll pay you the $50 next week". I still break your legs. But you say, "I'll pay you *all* of it next week". Maybe now I'm willing to wait another week. While they both stall for another week, the greater promise makes the stall more tolerable.

Classic stalling tactic -- to get more time when you don't plan to deliver at all, increase your promise to the maximum and thus earn the maximum stalling time anyone is willing to give you.

It seems to me pirate is now saying the market or conditions have turned against him, and now he's blaming personal attacks too.  Makes me wonder how long before he declares 'I would have returned all the money long ago, but it's your fault I haven't because so many people said I'm running a ponzi scam'.

What I know about the personal attacks is that some people on IRC become REALLY aggressive when pirate shows up and completely destroy the conversation. Add to that the PM he gets each day, all the personal informations splattered on the forums and how everything he says is scrutinized like under a microscope, I'm happy to be me and not to be him at the moment.

If pirate is a fraud, I'm seriously wondering why he's still hanging around here. Close GPUMax, stop the payments and run dude! I don't know what you're waiting for, nobody is going to deposit more BTC anyway.

If he's legit though, the amount of pressure must be gigantic.

He's still making money. Why would he run when money is still rolling in? So long as people continue to believe that he might pay, his debt is still worth something, so he can keep selling it. He can produce an unlimited amount of debt, so he's not going to stop until his debt has zero value.

Interesting, so essentially, an announcement that BTCST is closing instead of just not paying interest all of a sudden, and then further stalling, the BTC price remains higher, thus enabling additional time to liquidate?

[Littleshop]

Or more illustrative - does anyone have any evidence of any direct Pirate debt being sold at discount? Passthroughs don't count. Anyone? Anywhere?

Bitcoinmax is the type account being traded outside of the GLBSE.

[jbreher]

Or more illustrative - does anyone have any evidence of any direct Pirate debt being sold at discount? Passthroughs don't count. Anyone? Anywhere?

Bitcoinmax is the type account being traded outside of the GLBSE.

I did not realize Bitcoinmax ran outside the 'registered' securities system of GLBSE. Mea culpa - this is a third category. Still, seems no mechanism in this category for Pirate to continue to issue new debt.

This is not direct Pirate debt, right? Bitcoinmax is a separate entity, correct? By 'passthorugh' or any other name. Accordingly, such debt cannot be newly-minted by Pirate after the close.

Unless Bitcoinmax is in on it. Is that your assertion?

[MrTeal]

Or more illustrative - does anyone have any evidence of any direct Pirate debt being sold at discount? Passthroughs don't count. Anyone? Anywhere?

Bitcoinmax is the type account being traded outside of the GLBSE.

I did not realize Bitcoinmax ran outside the 'registered' securities system of GLBSE. Mea culpa - this is a third category. Still, seems no mechanism in this category for Pirate to continue to issue new debt.

This is not direct Pirate debt, right? Bitcoinmax is a separate entity, correct? By 'passthorugh' or any other name. Accordingly, such debt cannot be newly-minted by Pirate after the close.

Unless Bitcoinmax is in on it. Is that your assertion?

No, I don't think payb.tc is in on it. He could be though, it's a non-zero risk that should be taken into account in all this.

A quick search did turn up a couple people just buying direct Pirate debt.
https://bitcointalk.org/index.php?topic=104052.msg1139171#msg1139171
https://bitcointalk.org/index.php?topic=104068.0

[JoelKatz]

I could perhaps envision that he may have purchased shares through some of the various pass-throughs. But these would have been purchased at market rates. Now to be sold at distressed rates. Not much of a business plan, if you ask me.

Sure, he could _buy_ passthrough shares at distressed rates. If he had an intention of paying up, this could save him a lot of money in the long haul. Bu that is not the topic of this sub-discussion.

ETA: "...sell them at a discount...". What motivation would he have to do that?

Ahh, I see what you're missing. If Pirate buys a PPT for 10,000 bitcoins, those 10,000 bitcoins pass right through to him. That's the whole point of a PPT. So long as he doesn't withdraw, the PPT will not withdraw, so that money will just earn interest as a number.

When it compounds to, say, 13,000 BTC, he can turn around and sells it for 6,000 bitcoins or so, he just made 6,000 bitcoins for nothing. Plus, while that 10,000-13,000 bitcoin PPT was outstanding, it makes him look bigger and helps build a market for PPTs.

It makes no sense for him to buy passthrough shares at distressed rates. He knows his debt is worthless, so why should he pay good money for it that comes out of his pocket?

Interesting, so essentially, an announcement that BTCST is closing instead of just not paying interest all of a sudden, and then further stalling, the BTC price remains higher, thus enabling additional time to liquidate?

I honestly don't think it will have any significant affect on the price of bitcoins, though other people disagree. It's certainly possible he thinks it will. Though in that case, I'm not sure why he wouldn't have been liquidating for the past month or so.

[Grinder]

Or more illustrative - does anyone have any evidence of any direct Pirate debt being sold at discount? Passthroughs don't count. Anyone? Anywhere?

Excluding some explanations and demanding evidence against pirate is what got people into this mess in the first place. When are you going to learn?

[jbreher]

I could perhaps envision that he may have purchased shares through some of the various pass-throughs. But these would have been purchased at market rates. Now to be sold at distressed rates. Not much of a business plan, if you ask me.

Sure, he could _buy_ passthrough shares at distressed rates. If he had an intention of paying up, this could save him a lot of money in the long haul. Bu that is not the topic of this sub-discussion.

ETA: "...sell them at a discount...". What motivation would he have to do that?

Ahh, I see what you're missing. If Pirate buys a PPT for 10,000 bitcoins, those 10,000 bitcoins pass right through to him. That's the whole point of a PPT. So long as he doesn't withdraw, the PPT will not withdraw, so that money will just earn interest as a number.

When it compounds to, say, 13,000 BTC, he can turn around and sells it for 6,000 bitcoins or so, he just made 6,000 bitcoins for nothing. Plus, while that 10,000-13,000 bitcoin PPT was outstanding, it makes him look bigger and helps build a market for PPTs.

So before the 'close' he may have bought a lot of PPT debt. OK. But that does not equate to newly-minted debt (debt issued after the close), which is the entire scope of discussion.

It makes no sense for him to buy passthrough shares at distressed rates. He knows his debt is worthless, so why should he pay good money for it that comes out of his pocket?

I explicitly qualified my scenario as being one in which he has a desire to redeem his debt. In this scenario, it most certainly makes sense for him to buy heavily discounted Pirate debt. If he can absolve 1BTC of obligation by buying it on the open market for 0.5BTC, then that is 0.5BTC less he needs to pony up to settle. If he leaves it on the market, he would need to spend the full 1BTC to settle the debt.

But this is obvious, and I can tell you are a smart guy. Are you just not reading what I am writing, or are you trolling me?

Lastly, I disavow any knowledge of the last paragraph you quoted, as it was not a quote of my writings.

[Littleshop]

I could perhaps envision that he may have purchased shares through some of the various pass-throughs. But these would have been purchased at market rates. Now to be sold at distressed rates. Not much of a business plan, if you ask me.

Sure, he could _buy_ passthrough shares at distressed rates. If he had an intention of paying up, this could save him a lot of money in the long haul. Bu that is not the topic of this sub-discussion.

ETA: "...sell them at a discount...". What motivation would he have to do that?

Ahh, I see what you're missing. If Pirate buys a PPT for 10,000 bitcoins, those 10,000 bitcoins pass right through to him. That's the whole point of a PPT. So long as he doesn't withdraw, the PPT will not withdraw, so that money will just earn interest as a number.

When it compounds to, say, 13,000 BTC, he can turn around and sells it for 6,000 bitcoins or so, he just made 6,000 bitcoins for nothing. Plus, while that 10,000-13,000 bitcoin PPT was outstanding, it makes him look bigger and helps build a market for PPTs.

So before the 'close' he may have bought a lot of PPT debt. OK. But that does not equate to newly-minted debt (debt issued after the close), which is the entire scope of discussion.

It makes no sense for him to buy passthrough shares at distressed rates. He knows his debt is worthless, so why should he pay good money for it that comes out of his pocket?

I explicitly qualified my scenario as being one in which he has a desire to redeem his debt. In this scenario, it most certainly makes sense for him to buy heavily discounted Pirate debt. If he can absolve 1BTC of obligation by buying it on the open market for 0.5BTC, then that is 0.5BTC less he needs to pony up to settle. If he leaves it on the market, he would need to spend the full 1BTC to settle the debt.

But this is obvious, and I can tell you are a smart guy. Are you just not reading what I am writing, or are you trolling me?

Lastly, I disavow any knowledge of the last paragraph you quoted, as it was not a quote of my writings.

He did not buy any of his own debt.  That makes no sense if you have no intention of paying.   Some have speculated that he SOLD debt after the 17'th through sockpuppet accounts but I doubt that really happened.