[idea] Ponzi plus. Bet against ponzi's

[Puppet]

There are some attacks against this.

For one, the Ponzi operator can join your system, and withdraw everything a moment before he shuts down.

Thats the beauty of running this on an exchange, there is no out, there is no risk of a bank run. Ask OBSI.HRPT investors, the only way out is selling your bonds (/shares) at market value.

So you require some sort of lock-in mechanism that's spread out over time. Still, you need to measure the Ponzi's actual size, or else someone can burn you out by using massively inflated numbers. They never offer internal bookkeeping, so that's also an annoying task.

Indeed, this was already brought up and answered. Again its not a problem on an exchange where you can find this data, but it would be a problem for an off exchange ponzi.

As Pirateat40 said, the market for his kind of operation will be saturated after he leaves. I don't see a big BTC Ponzi coming up any time soon, now that everyone is more skeptical.

Lets hope none ever gets remotely as big as pirate again, but there is no shortage of new and old ponzi's. Have you checked this subforum recently?

[Deprived]

I don't see a profit mechanism here. How do you make anything doing this?

-MarkM-

The profit mechanism is that you're betting that the ponzi collapses before you've paid out more interest than the original capital deposited with you.  In theory it could work - in practice there's a bunch of difficulties.

As an example take OBSI.HRPT - which many believe to be a ponzi.  Let's assume, for the purpose of discussion, that it IS a ponzi.  If so, then it's teetering on the verge of collapse - with no new funds coming in.  But it would still be hard to make a profit on it from the means described in the op?  Why?

Becasue OBSI.HRPT doesn't allow withdrawals and DOES allow paying 0% interest.   So even assuming it IS being run as a ponzi it's stll hard to see a point where a scheme such as OP's could claim that it had defaulted.  In theory Obsi could just sit there paying out 0% and refusing to pay out funds forever - without at any stage defaulting from what what was agreed in his contract.  Worse still (from the perspective of the operation described in the OP) the price on his shares  will crash heavily if that happens.  If they drop low enough he can buy a load back cheap then has the option of actually cashing out all remaining investors at their original investment and still keeping a handy profit.  At that stage the operation described in OP would have to refund all its depositors too - in addition to having paid out interest and having had all the funds sit around doing nothing in the meantime.

OBSI.HRPT also has another edge on a competing investment such as the one in OP.  If it's a ponzi/scam (we're assuming it is for this discussion) then he's also pulling in income from his other shares/bonds.  If he drops the rate OBSI.HRPT pays to 0% then he can still continue to suck in cash on the other shares so has no reason to make plain that OBSI.HRPT was a ponzi (allowing the OP's operation to 'win') as that would dry up his other income.

It seems to me that the amount of time investor's funds would be tied up for before they could safely be claimed would degenerate the rate of return so low as not to be worthwhile even if a profit was made.

[Puppet]

Becasue OBSI.HRPT doesn't allow withdrawals and DOES allow paying 0% interest.   So even assuming it IS being run as a ponzi it's stll hard to see a point where a scheme such as OP's could claim that it had defaulted.  In theory Obsi could just sit there paying out 0% and refusing to pay out funds forever - without at any stage defaulting from what what was agreed in his contract.

This is precisely what I expect will happen. But it wouldnt  be a problem for ponzi plus, as we would also pay 0% on our ponzi+ bonds. We dont need an official default date or something, and the market price for Obsi bonds would give us a good indication of how much of the coins we need to keep in reserve. As the market price for these bonds approaches zero, our 10% buyback offer will be used by our depositors, extinguishing our liability and cementing the rest as profit.

OBSI.HRPT also has another edge on a competing investment such as the one in OP.  If it's a ponzi/scam (we're assuming it is for this discussion) then he's also pulling in income from his other shares/bonds.  If he drops the rate OBSI.HRPT pays to 0% then he can still continue to suck in cash on the other shares so has no reason to make plain that OBSI.HRPT was a ponzi (allowing the OP's operation to 'win') as that would dry up his other income.

He can only do that if the other shares are also fast growing ponzis, in which case we should bet against them equally.

[pyrkne]

I am against any security that is involved with ponzi schemes.

Even when betting against ponzi schemes, such securities benefit from their existence and promote their existence..

I feel the best way to handle potential ponzi schemes is to highlight all of the concerns and make such information visible to the public and then keep our distance.

Agreed, Ponzi schemes should fade away like the background noise that they are.

[🏰 TradeFortress 🏰]

This will probably collapse in a few weeks.