Bitcoin Savings and Trust | Home | Closed

[Sukrim]

In addition, people getting mandatory withdraws could never happen in a ponzi, since money is always needed to fund the ponzi.

If you grow too fast, you risk not being able to pay out big/early investors (which seem to be the more vocal ones in this thread, since they have - hopefully not just "on paper" but after a successful withdrawal - already multiplied their investment) and your system could collapse early. Also for whatever weird reason people see this as a more reassuring fact.

On a different note:
If anyone is interested in running some blockchain analysis: http://blockchain.info/fb/1gpuma seems to be a payout address to a miner (who also used satoshidice, so don't assume all inputs are from pirate) on GPUMax. http://blockchain.info/fb/1nz2hx for example is with quite high certainty an address controlled by GPUMax and thus pirateat40. Have fun working your way from there!

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[copumpkin]

We're pages into the latter. Still no explanation, still it looks like Pirateat40's decision is a massive loss for him unless it is a Ponzi. Still nothing on the need for insanely large individual accounts to get the 7% yield.

Vandroiy,

You want me to tell you how I run my business?  That's your end result, right?  You don't care what happens, I tell you what it is and you'd ruin it for my lenders or I don't tell and you keep up the never ending slander.

We got the message, you've warned everyone.  I'll be sure to post that "YOU WERE RIGHT" when things come crashing down.

No no... no! We're not stopping, we're going to keep repeating the same red flags until you can't find anyone new to "invest" with you before answering some crucial questions. You see, we're not exposing you so those who already take in to their account the very high risk that you are a fraud before they "invest" with you, no no, we are trying to save those unsuspecting naive people without which, if you are the fraud that we think you are, you're going to go bust ASAP.

Thank God for these white knights

[hazek]

There have been some very good posts that you've made elsewhere; this fanatical desire to tilt at windmills is truly beneath you and insulting to your intelligence. Nobody wins from this scorched earth method. Stop it and go find a cause that's worthwhile.

Awww   Thank you!   But the thing is I'm having immense fun thinking I could be ruining the "fun" of a scammer so my posts might be formulated childishly but they still contain valid arguments and valid red flags that I will not stop raising.

I might even take your advice and make a special thread and bump it all the time as well.

[copumpkin]

There have been some very good posts that you've made elsewhere; this fanatical desire to tilt at windmills is truly beneath you and insulting to your intelligence. Nobody wins from this scorched earth method. Stop it and go find a cause that's worthwhile.

Awww   Thank you!   But the thing is I'm having immense fun thinking I could be ruining the "fun" of a scammer so my posts might be formulated childishly but they still contain valid arguments and valid red flags I will not stop spreading.

I might even take your advice and make a special thread and bump it all the time as well.

Okay, fine, I'm making too much money here to let you keep doing this. Where should I send the 10k to shut you up?

[hazek]

Where did you get the idea you could pay me to stop raising valid arguments and red flags in order to prevent people from needlessly losing their money?

[Sukrim]

5000 BTC to 1PjZWL4QmwHNa4Py16uWJr1T9udNRXXrpm within the next 24 hours and this is my last post in this thread.

Edit: cheaper than hazek because I'm probably less annoying...

[miscreanity]

Surely it must be that and not that I wouldn't want people to lose money and endlessly suffer right?

A coddled child, protected from all difficulty, rarely becomes more than an automaton. We learn through our failures. Development of rational judgment requires trial and error.

Go get a dog so you can come to understand cause & effect.

Awww   Thank you!   But the thing is I'm having immense fun thinking I could be ruining the "fun" of a scammer so my posts might be formulated childishly but they still contain valid arguments and valid red flags that I will not stop raising.

I might even take your advice and make a special thread and bump it all the time as well.

And if you destroy what might turn out to be a legitimate outfit that may well be a primary factor in maintaining a stable Bitcoin exchange rate, what will you say? "Oops"?

You are not the judge, jury, and executioner.

[Tomatocage]

I'm leaning away from the whole Ponzi thing and more toward the idea that Pirate is converting money for smaller drug cartels.  Occam's razor has another edge.

[mb300sd]

5000 BTC to 1PjZWL4QmwHNa4Py16uWJr1T9udNRXXrpm within the next 24 hours and this is my last post in this thread.

Edit: cheaper than hazek because I'm probably less annoying...

I'll take the same deal, but for 50.. see sig

I don't think I've posted much more than "Happy monday!" though.

[copumpkin]

Where did you get the idea you could pay me to stop raising valid arguments and red flags in order to prevent people from needlessly losing their money?

You told us! Don't you remember??

[bpd]

BTCST is a Ponzi scheme, pure and simple. It's been masterfully planned and executed, but I suspect the end is near. 7% a week (28% a month, non-compounded) is far too high to sustain the operation for very long, and it's impressive that it has lasted 6 months. Madoff survived so long by offering about ONE percent a month. People handed him billions to be able to get those returns. There is simply no business opportunity on the planet for which it makes sense to borrow at a compounded annual interest rate of 3300%. If you had a way of making even 1% a week, you'd be crazy to share those profits for longer than it took you to accumulate enough capital to self-fund and bear the risk of whatever you're doing. Or convince a single large private lender of what you're doing, and borrow at something like 6-8% annually.

Here are some aspects that make this a well-played Ponzi:

- Establish trust and reputation over a long period by making OTC trades and building a high OTC and Forum rating. What is the trust rating of an anonymous avatar ultimately worth vs. potentially stealing 100k BTC or more? "Con man" derives from "confidence man". A successful confidence man goes for the long con -- building trust over a long period of time, not taking the small short-term gain in order to take the big score at the end.

- Build an early core of investors who are well-known forum members. My guess is these people were pulled in a month or more before he ever posted the first thread on the forum. This army of early investors serves as a mob who can shout down the inevitable ponzi warnings on the forums. Read the EVE Online account for an account of how this works. In particular, have certain forum members claim to know Pirate's real name or have met hime. If there are forum members here who claim to know who Pirate is (with proof), you should commit to that identity now in the forum with an encrypted message. When the scheme goes south, you can provide the key for decryption. I highly down anyone actually knows who he is though.

- Limit capacity early on, visibly kicking people's investments out. This serves multiple functions. First, it sidesteps the "whale" problem of taking on too much money too early and not being able to make payments. Second, it is a psychological trick that causes investors to be afraid of the wrong thing. Instead of having the fear of losing their entire investment, investors fear being kicked out by earlier investors or "lack of capacity". This makes them reluctant to withdraw, because they may not be able to get back in. Finally, it gives preferential status to early investors, who can offer pass-thru investments to others, and essentially magnifies the marketing efforts of what he could do on his own. He can still control the overall growth rate by restricting these pass-thru providers though. These pass-thru providers may or may not be in on the scheme. Even if they're not in on it, but suspect it's a Ponzi, they can effectively collect risk-free spread by skimming off their spread, while shifting the blame onto Pirate when the eventual default comes.

- Use very vague description of the business. Indicate that there are these large "whales" out there who want to invest in bitcoin and are willing to pay absurd premiums to the market rate in order to do so, and apparently want more and more BTC over time. Even though no one else has found such clients, no one can really prove that you DON'T have access to such clients. This is better than Ponzi's original scheme which he said involved buying massively discounted postal coupons overseas and selling them for face value in the US for big arbitrage profit. The post office called his bluff -- that can't happen to Pirate.

- The scheme is being run using a virtual currency which is semi-anonymous and can be effectively laundered, either along the way or at the end. Based on current law, it may not even be considered a crime, if bitcoin is not considered to be property by the law.

It appears we may be nearing the end of this. The rates are being lowered (but why wait til Aug 1? Potentially, to suck more money in for the next 4 weeks to earn the still-high returns). These "trust" accounts are where the real money is to be made. By making a large differential between the direct accounts and the high value "trust" accounts, it encourages the inflow of a lot of capital to trust accounts (with a nice little 500 BTC kicker per account for the "security deposit"). This is the time for the payoff, so it makes sense to take as much money as quickly as you can before the end. No more worries about whales.

Posting that he's going to be available to meet up in person is another signal that he needs to create additional assurance to suck more investors in. Odds are, either the scheme will collapse before then, or he'll conveniently get sick and not be able to make it.

How does this end? I can think of 3 main ways:

1) He simply disappears, never to be heard from again on the forums.

2) He announces it's a Ponzi -- sorry, you've all been had.

3) He announces that (horror of horrors!) he's been hacked. All the BTC are gone. He's really sorry to let down all his investors -- but it's that damn hacker you should track down!

In any of these cases, he could cash out to USD beforehand or afterwards at a later time. But if you were uncertain as to the impact that revealing BTCST as a ponzi might have on the exchange rate, I think it's much more likely that you'd try to cash out beforehand.

The sooner people test their ability to actually withdraw their account balances, the sooner this will all be over. A ponzi can't tolerate even the HINT of a run on the bank. Why pay out money that you know you can't? Better to keep it and end the scheme.

Good luck to you all.

[Serge]

Already discussed and defended ad nauseum: https://bitcointalk.org/index.php?topic=82849.msg916286#msg916286

would you rather make 10.65% a week but have some risk of losing your capital if bitcoin fails OR would rather make only 4.67% a week using someone else's capital and have pretty much no risk whatsoever. I think pirate would be stupid to risk his own money.

Do you really want me to do that math for you?

Okay. Whatever. Difference in yields there is 5.98%. Amortization time of risking own money: 12 weeks. However, Pirateat40 pays 7%, so it's shorter even! Bitcoin has survived trading for decent amounts for over a year now, so the decision to use other people's money is a massive loss for him already. In fact, a factor 5.7 using these understated client yields.

Plus, just investing the earnings from the current scheme now and kicking people out would not risk a bitcent of his starting capital!

This is a joke. Next argument, please?

following thoughts come with an assumption that pirate's business is not a ponzi for argument's sake

i figure pirate doesn't have a luxury to keep all the profits for himself otherwise it would be poorly reflected on overall bitcoin economy, he would acquire massive amount of bitcoins but since no one else making such great returns bitcoin demand and price could potentially significantly degrade which could lead to his business drying up as well. by distributing wealth throughout his lenders he ensures bitcoin economy keeps floating and therefore bitcoin demand and attractiveness continues to stay on level and increase.

  BWAHAHAHAHAHAHAHA  YOU CAN'T BE SERIOUS    Did you hear people? He's giving up profit for the greater good of Bitcoin. Man how deluded can some get.. 

we all agree that compounding over 40%/month interest is not sustainable in the long run, at some point there will be reached hard limit. count how long would it take to acquire all bitcoins in existence with that rate. but once you're closing in on majority of bitcoins with such compounding you will be effectively devaluing bitcoin price or price would go crazy UP with very very very limited bitcoins available on the marker, there would be no liquidity in economy - it would make bitcoin economy stale or crash hard in the end and everyone else losing interest in it.  with such great returns, profits IMO must be shared and further distributed throughout market participants, it only makes sense to take a little cut and pass rest of the profits on to others - this effectively makes economy move and flourish which in turn re-fuels and supports his business further.
what will happen when pirate's business reaches the limit of incoming bitcoins as they're can't be printed out of thin air? - bitcoin price would increase and he will be forced to adjust his rates - this is much better and prolonged outcome than being greedy milking over 40%/mo compounding all by himself while going towards drying up and crashing or at the very least stalling bitcoin economy, don't you think so?

[R-]

BTCST is a Ponzi scheme, pure and simple.
How does this end? I can think of 3 main ways:

1) He simply disappears, never to be heard from again on the forums.

2) He announces it's a Ponzi -- sorry, you've all been had.

3) He announces that (horror of horrors!) he's been hacked. All the BTC are gone.

Yep. Pirate realises his identity will be uncovered and whereabouts distributed to the masses when he disappears. I wonder what his move will be. He knows stealing an excess of $400k from a pool of tech savy individuals is not smart.

[Vandroiy]

Vandroiy,

You want me to tell you how I run my business?  That's your end result, right?  You don't care what happens, I tell you what it is and you'd ruin it for my lenders or I don't tell and you keep up the never ending slander.

We got the message, you've warned everyone.  I'll be sure to post that "YOU WERE RIGHT" when things come crashing down.

No, I need no details. I just want to know why you don't have enough BTC to continue without investors by now. Exponential growth is pretty neat, and I don't see why these peoples' BTC should be better than your own.

If there's one thing I found out by now, then it's that you joke a lot less than it seems. I trust you can fulfill the promise above, and you'll have a laugh at a lot of people when you do.

In addition, people getting mandatory withdraws could never happen in a ponzi, since money is always needed to fund the ponzi.

Do. You. Guys. EVER. Actually. Read. What. I. Have. Repeated. A. Gazillion. Times?

Forced withdraws are necessary to limit the scheme's growth in the beginning. The expected behavior matches observations of BS&T to the best of my knowledge. Also, the method provides a cheap argument for discussions like this one.

If this turns out a scam, people will be angry at everyone who was advertising it. This is the main point! Feel free to throw out your money, we're a free community. However, advertising something you cannot distinguish from a Ponzi is a no-go. This includes misinformed "explanations" as to why this "must be legit".

Right because this forum are the center of the Bitcoin universe, right?  At this point, there's nothing you can do about it.  Keep trying though.

LOL man, you got guts, I give you that. If it weren't Bitcoin, I'd just have fun watching. Your style is so brazen, it's outright funny. OK, you got me, I gotta do something else. If people read that and keep going "lalala it's safe," well, gosh I'm out of words.

But I'm just gonna post the quote again for good measure.

At this point, there's nothing you can do about it.  Keep trying though.

[Tomatocage]

BTCST is a Ponzi scheme, pure and simple. It's been masterfully planned and executed, but I suspect the end is near. 7% a week (28% a month, non-compounded) is far too high to sustain the operation for very long, and it's impressive that it has lasted 6 months. Madoff survived so long by offering about ONE percent a month. People handed him billions to be able to get those returns. There is simply no business opportunity on the planet for which it makes sense to borrow at a compounded annual interest rate of 3300%. If you had a way of making even 1% a week, you'd be crazy to share those profits for longer than it took you to accumulate enough capital to self-fund and bear the risk of whatever you're doing. Or convince a single large private lender of what you're doing, and borrow at something like 6-8% annually.

Here are some aspects that make this a well-played Ponzi:

- Establish trust and reputation over a long period by making OTC trades and building a high OTC and Forum rating. What is the trust rating of an anonymous avatar ultimately worth vs. potentially stealing 100k BTC or more? "Con man" derives from "confidence man". A successful confidence man goes for the long con -- building trust over a long period of time, not taking the small short-term gain in order to take the big score at the end.

- Build an early core of investors who are well-known forum members. My guess is these people were pulled in a month or more before he ever posted the first thread on the forum. This army of early investors serves as a mob who can shout down the inevitable ponzi warnings on the forums. Read the EVE Online account for an account of how this works. In particular, have certain forum members claim to know Pirate's real name or have met hime. If there are forum members here who claim to know who Pirate is (with proof), you should commit to that identity now in the forum with an encrypted message. When the scheme goes south, you can provide the key for decryption. I highly down anyone actually knows who he is though.

- Limit capacity early on, visibly kicking people's investments out. This serves multiple functions. First, it sidesteps the "whale" problem of taking on too much money too early and not being able to make payments. Second, it is a psychological trick that causes investors to be afraid of the wrong thing. Instead of having the fear of losing their entire investment, investors fear being kicked out by earlier investors or "lack of capacity". This makes them reluctant to withdraw, because they may not be able to get back in. Finally, it gives preferential status to early investors, who can offer pass-thru investments to others, and essentially magnifies the marketing efforts of what he could do on his own. He can still control the overall growth rate by restricting these pass-thru providers though. These pass-thru providers may or may not be in on the scheme. Even if they're not in on it, but suspect it's a Ponzi, they can effectively collect risk-free spread by skimming off their spread, while shifting the blame onto Pirate when the eventual default comes.

- Use very vague description of the business. Indicate that there are these large "whales" out there who want to invest in bitcoin and are willing to pay absurd premiums to the market rate in order to do so, and apparently want more and more BTC over time. Even though no one else has found such clients, no one can really prove that you DON'T have access to such clients. This is better than Ponzi's original scheme which he said involved buying massively discounted postal coupons overseas and selling them for face value in the US for big arbitrage profit. The post office called his bluff -- that can't happen to Pirate.

- The scheme is being run using a virtual currency which is semi-anonymous and can be effectively laundered, either along the way or at the end. Based on current law, it may not even be considered a crime, if bitcoin is not considered to be property by the law.

It appears we may be nearing the end of this. The rates are being lowered (but why wait til Aug 1? Potentially, to suck more money in for the next 4 weeks to earn the still-high returns). These "trust" accounts are where the real money is to be made. By making a large differential between the direct accounts and the high value "trust" accounts, it encourages the inflow of a lot of capital to trust accounts (with a nice little 500 BTC kicker per account for the "security deposit"). This is the time for the payoff, so it makes sense to take as much money as quickly as you can before the end. No more worries about whales.

Posting that he's going to be available to meet up in person is another signal that he needs to create additional assurance to suck more investors in. Odds are, either the scheme will collapse before then, or he'll conveniently get sick and not be able to make it.

How does this end? I can think of 3 main ways:

1) He simply disappears, never to be heard from again on the forums.

2) He announces it's a Ponzi -- sorry, you've all been had.

3) He announces that (horror of horrors!) he's been hacked. All the BTC are gone. He's really sorry to let down all his investors -- but it's that damn hacker you should track down!

In any of these cases, he could cash out to USD beforehand or afterwards at a later time. But if you were uncertain as to the impact that revealing BTCST as a ponzi might have on the exchange rate, I think it's much more likely that you'd try to cash out beforehand.

The sooner people test their ability to actually withdraw their account balances, the sooner this will be all over. A ponzi can't tolerate even the HINT of a run on the bank. Why pay out money that you know you can't? Better to keep it and end the scheme.

Good luck to you all.

Unfortunately none of that proves it's a Ponzi.  And even more unfortunate is that seldom Ponzi can be proven until it's too late.  In the case of each one of your three end-game scenarios, we still have full dox on him, and some people still have a lot of BTC.  

[hazek]

BTCST is a Ponzi scheme, pure and simple. It's been masterfully planned and executed, but I suspect the end is near. 7% a week (28% a month, non-compounded) is far too high to sustain the operation for very long, and it's impressive that it has lasted 6 months. Madoff survived so long by offering about ONE percent a month. People handed him billions to be able to get those returns. There is simply no business opportunity on the planet for which it makes sense to borrow at a compounded annual interest rate of 3300%. If you had a way of making even 1% a week, you'd be crazy to share those profits for longer than it took you to accumulate enough capital to self-fund and bear the risk of whatever you're doing. Or convince a single large private lender of what you're doing, and borrow at something like 6-8% annually.

Here are some aspects that make this a well-played Ponzi:

- Establish trust and reputation over a long period by making OTC trades and building a high OTC and Forum rating. What is the trust rating of an anonymous avatar ultimately worth vs. potentially stealing 100k BTC or more? "Con man" derives from "confidence man". A successful confidence man goes for the long con -- building trust over a long period of time, not taking the small short-term gain in order to take the big score at the end.

- Build an early core of investors who are well-known forum members. My guess is these people were pulled in a month or more before he ever posted the first thread on the forum. This army of early investors serves as a mob who can shout down the inevitable ponzi warnings on the forums. Read the EVE Online account for an account of how this works. In particular, have certain forum members claim to know Pirate's real name or have met hime. If there are forum members here who claim to know who Pirate is (with proof), you should commit to that identity now in the forum with an encrypted message. When the scheme goes south, you can provide the key for decryption. I highly down anyone actually knows who he is though.

- Limit capacity early on, visibly kicking people's investments out. This serves multiple functions. First, it sidesteps the "whale" problem of taking on too much money too early and not being able to make payments. Second, it is a psychological trick that causes investors to be afraid of the wrong thing. Instead of having the fear of losing their entire investment, investors fear being kicked out by earlier investors or "lack of capacity". This makes them reluctant to withdraw, because they may not be able to get back in. Finally, it gives preferential status to early investors, who can offer pass-thru investments to others, and essentially magnifies the marketing efforts of what he could do on his own. He can still control the overall growth rate by restricting these pass-thru providers though. These pass-thru providers may or may not be in on the scheme. Even if they're not in on it, but suspect it's a Ponzi, they can effectively collect risk-free spread by skimming off their spread, while shifting the blame onto Pirate when the eventual default comes.

- Use very vague description of the business. Indicate that there are these large "whales" out there who want to invest in bitcoin and are willing to pay absurd premiums to the market rate in order to do so, and apparently want more and more BTC over time. Even though no one else has found such clients, no one can really prove that you DON'T have access to such clients. This is better than Ponzi's original scheme which he said involved buying massively discounted postal coupons overseas and selling them for face value in the US for big arbitrage profit. The post office called his bluff -- that can't happen to Pirate.

- The scheme is being run using a virtual currency which is semi-anonymous and can be effectively laundered, either along the way or at the end. Based on current law, it may not even be considered a crime, if bitcoin is not considered to be property by the law.

It appears we may be nearing the end of this. The rates are being lowered (but why wait til Aug 1? Potentially, to suck more money in for the next 4 weeks to earn the still-high returns). These "trust" accounts are where the real money is to be made. By making a large differential between the direct accounts and the high value "trust" accounts, it encourages the inflow of a lot of capital to trust accounts (with a nice little 500 BTC kicker per account for the "security deposit"). This is the time for the payoff, so it makes sense to take as much money as quickly as you can before the end. No more worries about whales.

Posting that he's going to be available to meet up in person is another signal that he needs to create additional assurance to suck more investors in. Odds are, either the scheme will collapse before then, or he'll conveniently get sick and not be able to make it.

How does this end? I can think of 3 main ways:

1) He simply disappears, never to be heard from again on the forums.

2) He announces it's a Ponzi -- sorry, you've all been had.

3) He announces that (horror of horrors!) he's been hacked. All the BTC are gone. He's really sorry to let down all his investors -- but it's that damn hacker you should track down!

In any of these cases, he could cash out to USD beforehand or afterwards at a later time. But if you were uncertain as to the impact that revealing BTCST as a ponzi might have on the exchange rate, I think it's much more likely that you'd try to cash out beforehand.

The sooner people test their ability to actually withdraw their account balances, the sooner this will be all over. A ponzi can't tolerate even the HINT of a run on the bank. Why pay out money that you know you can't? Better to keep it and end the scheme.

Good luck to you all.

Yep, this story fits.

[Vandroiy]

This is the one rare occasion that calls for a deliberate double-post.

At this point, there's nothing you can do about it.  Keep trying though.

I'm off, guys, it doesn't get any better than this, and that's when you quit.

[Clipse]

Ive been on the fence putting some of my coin into one of the pass-thrus and this is my conclusion right now:

1. After the Vegas meetup(sadly Im not on the same continent) alot more people who arnt specificly part of the in-group will know who pirate is.

2. There is a ton invested in Pirate savings from all kinds of people, some potentially passive(will shrug if its a ponzi at the end) and some potentially aggressive(will go as far as potential kill pirate due to lost money if all goes to shit)

Fact of the matter is that due to pass-thrus I can assure you pirate doesnt know who he is dealing with via all the channels and if he runs a ponzi and defaults he will have no idea who he ultimately pissed off enough to cause serious harm to himself(unless he can physically drop of this planet and not be found) which isnt possible unless he would be happy to spend his fortune in the amazon rain forest or something crap like that.

This is my take on the matter, none of those suggested scams from EVE online ever revealed their own identity to the investors thus they could effectively pull the plug at will and laugh it off, this is not the case here and to me Pirate simply cannot be this stupid to effectively end his own life(he might have to be on the run just on principal alone some people have much more available capital to continue persuing him out of principal)

[herzmeister]

Nice coincidence, on the first page of gotbalotelled right now:

[pirateat40]

No, I need no details. I just want to know why you don't have enough BTC to continue without investors by now. Exponential growth is pretty neat, and I don't see why these peoples' BTC should be better than your own.

If there's one thing I found out by now, then it's that you joke a lot less than it seems. I trust you can fulfill the promise above, and you'll have a laugh at a lot of people when you do.

I can't remember how many times I've explained this, but for you I'll do it again.

Bitcoin is not fiat yet.  That doesn't mean it won't be at some point nor does it mean I don't believe in it.  There's simply no reason at this time for me to risk market movements with my converted fiat > bitcoin when there's hundreds of users that will let me make money with their coins.  I don't need them, I just prefer them.

My operation is funded by my lenders and I do hold a few personal coins myself.