How did people fall for this Pirate scam?

[Grinder]

I think that one thing that has made Bitcoin users more inclined to believe in it is that until about 1 year ago, Bitcoin was a pure Klondike. You would earn silly amounts of money compared to the investment in a short time no matter if you mined or just bought the coins. People kind of got used to that, so 7%/week didn't really seem all that much.

There are probably still a lot of unexplored and very profitable opportunities, but there is no need for those who see them to pay that much for funding, and they won't be able to keep a bitcoin business that involves this much money secret. What people says he might be doing is the equivalent of starting another MtGox with about 4 times the daily volume, and keeping it secret from the entire Bitcoin community for 6 months. It's just not realistic at all.

[cryptoanarchist]

I think its odd that so many people on here defend pirate.

Particularly Matthew Wright, who has always been quick to call everyone else a scammer who wasn't 100% transparent. He called bitscalper a scammer just for claiming 5% weekly returns based on arbitrage, but pirate claims 7% and he's willing to bet $100,000 that he's honest.

It seems to me that there are a lot of people here that are in on this with pirate. Matthew is definitely one of them. Hmmm...seems he was involved with another scammer just recently too.

[myrkul]

I think its odd that so many people on here defend pirate.

Particularly Matthew Wright, who has always been quick to call everyone else a scammer who wasn't 100% transparent. He called bitscalper a scammer just for claiming 5% weekly returns based on arbitrage, but pirate claims 7% and he's willing to bet $100,000 that he's honest.

It seems to me that there are a lot of people here that are in on this with pirate. Matthew is definitely one of them. Hmmm...seems he was involved with another scammer just recently too.

I doubt Matt's in on it. I think he was just tired of hearing all the bitching and moaning and wild speculation, and asked people to put up or shut up, as it were. He's just willing to spend a great deal of cash to shut people up for a little bit. Ironically, I think it backfired a bit, since it didn't quiet the pirate junk, and just made another channel of bitching and moaning and wild speculation. Probably would have been wiser to log off for a month or so and get peace that way.

[P4man]

He's just willing to spend a great deal of cash to shut people up for a little bit

He isnt going pay. I was going to offer a bet, but I see there is one already:
http://betsofbitco.in/item?id=588

[makomk]

This was quite clever actually.

It really wasn't. Tired of hearing that. Most reasonable people called bs&t for what it was the very first week it started taking deposits. Long-term members promoted it only for their own profit and should be ostracized for being the scamming trash they are.

Oh, you definitely had to be a greedy fool or a scammer to buy into the idea that Pirate's scheme was somehow trustworthy, but his high OTC rating and flim-flammery gave the fools and the scammers a way to justify thinking he was on the up-and-up. Also, from what I can tell a scary proportion of Bitcoin users - including long-term, trusted members of the community - have invested their own money in BS&T without actually promoting it or even publicly mentioning that they had until the whole thing imploded. The loud-mouthed supporters are just the tip of the iceberg. Apparently greed is a really powerful motivation, especially when everyone around you is telling you that you're a fool for not going for it.

[myrkul]

He's just willing to spend a great deal of cash to shut people up for a little bit

He isnt going pay. I was going to offer a bet, but I see there is one already:
http://betsofbitco.in/item?id=588

We'll see. I doubt he's in on it, but I wouldn't be surprised with either result, frankly. The 9th is going to be an interesting day around here.

[Brunic]

You mean to some big idiot. Who else would pay 20% over market price for such volumes to get his investment faster? And again, this wouldnt be happening once, but constantly at an ever increasing volume.

To keep the price low.

If right now, if you buy 111k BTC from Mt. Gox, the price goes from 10.34$ to 14.99$. Better to go see pirate and buy all the bundle for 11.25$. Pirate is happy because he makes money, and the investor is happy because his volume doesn't increase the price like it should. He sign the check, give it to pirate for a price and that's it. 111k BTC in your wallet without risk.

Also, the price would increase to that price if ONLY the investor would buy. But since it's a free market, many other people would see the price increase and would also try to buy. The price has the potential to go higher than 14.99$ during this buy.

You're asking why he should pay 11.25$ for BTC he can buy at 10.34$ ? I'm asking you why he should pay 14.99$ for BTC he can get at 11.25$.

I would also add that this way, the investor keep his anonymity. There's a limit that you can move on Mt. Gox anonymously. If you stay anonymous on Mt. Gox, you can move 10 000$/month. Or 1000$/day and withdraw 200 BTC/day. No point in buying an "anonymous" currency if you can't really stay anonymous.

[Gabi]

Greed, that's How. No matter what, everytime there is a ponzi, tons of ppl will fall for it. Mark my words, pirate ones won't be the biggest one. In the future there will be more ponzi (well that's normal) and moar ppl will fall for them (aka, more than 500k btc (yes i know that this 500k thing is not true, it's just for comparison))
I have seen this in EVE too many times, reading the pirate thread or reading the thread of any eve ponzi is like reading the same thing. At least on EVE once the scammer declare that it's indeed a scam, that's all, you can't sue other players   While here the idiots who gave pirate their money hoping for 7% for week now are all like "let's sue him11!!!!1one"

[myrkul]

If right now, if you buy 111k BTC from Mt. Gox, the price goes from 10.34$ to 14.99$. Better to go see pirate and buy all the bundle for 11.25$. Pirate is happy because he makes money, and the investor is happy because his volume doesn't increase the price like it should. He sign the check, give it to pirate for a price and that's it. 111k BTC in your wallet without risk.

OK, except now he's got all that USD, and interest totaling (at least) BTC7770 to pay out. Not to mention capital to replenish. Where is all that coming from?

[Brunic]

If right now, if you buy 111k BTC from Mt. Gox, the price goes from 10.34$ to 14.99$. Better to go see pirate and buy all the bundle for 11.25$. Pirate is happy because he makes money, and the investor is happy because his volume doesn't increase the price like it should. He sign the check, give it to pirate for a price and that's it. 111k BTC in your wallet without risk.

OK, except now he's got all that USD, and interest totaling (at least) BTC7770 to pay out. Not to mention capital to replenish. Where is all that coming from?

It can come from many sources. He can buy back directly from big miners (hey, I buy all your bundle for 10.34$, no price decrease because you're selling me 5000 BTC). If he buy from Mt. Gox, like I said, spread through time while putting ask walls to counter his own pressure.

Pirate DON'T have to pay back the capital, only the interests. It's not a loan over 12 months. If he buy back only 25% of the loan, he's ok, since he don't have to pay back the capital. The more he gets back the capital though, the faster he can sell those coins again at a premium. So he buy back at around 10.20-10.50 for a couple of days, a customer comes by, he sells again, ask for more money from his lender to cover the sell, he start buying back again, another customer, he sells again, he buy back, pay the interests ONLY (no capital to pay, only the withdraws), and it goes on and on.

He could even buy back from his own customers, with a guarantee that the price doesn't go down when they sell (unlike on the exchanges).

[myrkul]

If right now, if you buy 111k BTC from Mt. Gox, the price goes from 10.34$ to 14.99$. Better to go see pirate and buy all the bundle for 11.25$. Pirate is happy because he makes money, and the investor is happy because his volume doesn't increase the price like it should. He sign the check, give it to pirate for a price and that's it. 111k BTC in your wallet without risk.

OK, except now he's got all that USD, and interest totaling (at least) BTC7770 to pay out. Not to mention capital to replenish. Where is all that coming from?

It can come from many sources. He can buy back directly from big miners (hey, I buy all your bundle for 10.34$, no price decrease because you're selling me 5000 BTC). If he buy from Mt. Gox, like I said, spread through time while putting ask walls to counter his own pressure.

Pirate DON'T have to pay back the capital, only the interests. It's not a loan over 12 months. If he buy back only 25% of the loan, he's ok, since he don't have to pay back the capital. The more he gets back the capital though, the faster he can sell those coins again at a premium. So he buy back at around 10.20-10.50 for a couple of days, a customer comes by, he sells again, ask for more money from his lender to cover the sell, he start buying back again, another customer, he sells again, he buy back, pay the interests ONLY (no capital to pay, only the withdraws), and it goes on and goes on.

Withdraws are the capital going back out. It's in his best interest to have that available, since he does have to pay that back, when asked for it (he gave himself 2 weeks advance, clearly not enough). Whether my proposed business model, yours, or just a plain Ponzi, he got caught with his dick in his hand. 7% interest weekly should have been sufficient a signal to alert people that this is a high-risk investment. It looks like you pretty clearly understood that, though, and I respect the fact that you accept the consequences.

Arguing over the means that Pirate intended to make his money isn't very productive, though. Whether or not he gets labeled a scammer will depend on the results of the next week. We can stop rearranging the deck chairs, now.

[Brunic]

Withdraws are the capital going back out. It's in his best interest to have that available, since he does have to pay that back, when asked for it (he gave himself 2 weeks advance, clearly not enough). Whether my proposed business model, yours, or just a plain Ponzi, he got caught with his dick in his hand. 7% interest weekly should have been sufficient a signal to alert people that this is a high-risk investment. It looks like you pretty clearly understood that, though, and I respect the fact that you accept the consequences.

Arguing over the means that Pirate intended to make his money isn't very productive, though. Whether or not he gets labeled a scammer will depend on the results of the next week. We can stop rearranging the deck chairs, now.

Yeah, I agree that the withdraw is the capital going out. But he wasn't forced to pay it back like a regular loan, he was only screwed with a bank run.

Arguing over the business model is not productive, I completely agree with that. But the question to the topic is "why people loaned to pirate", and it was to explain my reasoning. I have made my due diligence, I've researched and worked many many hours to build and understand the model, and with that in mind, I've invested with pirate. Without all the reasoning I've just explained in that topic, you can be sure that pirate would have never received any of my coins.

It was still a risky investment, no doubt about that. But it was only to explain the reason, and show that there is more to that than "lol greed!!11!1!". For that business to work, you need one of the most trust able guy around here, and few guys qualify for that. Pirate was one of them.

I don't think I'm completely burn yet, since pirate is still around and seems to be trying to work this out. But this fire who could burn all my money....I can almost touch it.

*EDIT*
Just as I'm writing this post, GPUMax payments are coming out. If BTCST is a scam, pirate is the weirdest scammer I've seen for sure.

[Raoul Duke]

How did people fall for this Pirate scam?

It was very easy. pirateat40 gave each one a bitcoin address and people sent their coins there.

[myrkul]

It was still a risky investment, no doubt about that. But it was only to explain the reason, and show that there is more to that than "lol greed!!11!1!". For that business to work, you need one of the most trust able guy around here, and few guys qualify for that. Pirate was one of them.

I don't think I'm completely burn yet, since pirate is still around and seems to be trying to work this out. But this fire who could burn all my money....I can almost touch it.

It is a shame. He had (and still has, so far) some serious positive rep going.

If you can get him to talk, directly, rather than through his lawyer, I'd be more than happy to broker an equitable deal, for a fraction of the cost of lawyering up yourself, check out the thread linked in my sig.

I hope this goes well for you regardless, you seem like a very nice person.

[Brunic]

It was still a risky investment, no doubt about that. But it was only to explain the reason, and show that there is more to that than "lol greed!!11!1!". For that business to work, you need one of the most trust able guy around here, and few guys qualify for that. Pirate was one of them.

I don't think I'm completely burn yet, since pirate is still around and seems to be trying to work this out. But this fire who could burn all my money....I can almost touch it.

It is a shame. He had (and still has, so far) some serious positive rep going.

If you can get him to talk, directly, rather than through his lawyer, I'd be more than happy to broker an equitable deal, for a fraction of the cost of lawyering up yourself, check out the thread linked in my sig.

I hope this goes well for you regardless, you seem like a very nice person.

Thanks for the offer and the good words! 

I'll have to wait and see for now, he's still around and GPUMax is still paying out. There's some sort of "hope" I would say, but my trust in pirate is severely tested right now.

[Herodes]

Of course greed is the easy answer, but seriously, people who are intelligent enough to build and maintain mining rigs fall for the oldest trick in the book?

This is why people with poor business models like BFL can thrive in this environment. Obviously this community has a heavy dose of greedy folks.

It's simply a shame because I believe the point of bitcoin was to escape greed to a large degree, yet here we are...

Just a shame really.

Some ppl learned a lesson:

When something looks too good to be true, it usually is too good to be true.

[bitlane]

Blah.... I didn't learn shit.

I did it and I will do it again..... cocaine is a hell of a drug......

[AndrewBUD]

LOL..... Sometimes

[bitlane]

LOL..... Sometimes

Rick James...bitch....