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[Serenata]

I would look for a Pirate Pass Through type scheme in the lending section; there are a number of people offering them.

Those have the advantage of liquidity and higher interest rates for smaller investments, though risk is increased due to an additional middleman.

That! not all pirates are "200 years too late"

Thank you both for the answers though.

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[Raoul Duke]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

[imsaguy]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

Pirate was getting all sorts of attention long before PPT.  We are trying to counter Pirate risk by offering the insurance.

[Raoul Duke]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

Pirate was getting all sorts of attention long before PPT.  We are trying to counter Pirate risk by offering the insurance.

Yes he was, from lenders. Now he gets attention from jealous haters.
Nice try tho. Did I touch a soft spot? Sorry, I have the tendency to do that...
Also, your insurance is a joke from a mathematical perspective. You can fool the fools, or even fool yourself, but you don't fool me.

[PatrickHarnett]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

psy, I don't have "a beef"  However, I actually work reasonably hard at what I do, and built my initial deposit with pirate from 70-ish coins to 4000.  I have also helped a few other people get to their next tier of interest.  You also obviously don't understand (and can not actually know) all of the things I'm doing to make my money in the bitcoin world, and speculating on GLBSE is still only a small part of it.  (I know of several people that are doing that much more seriously than I am.)  When/if you have $20k or $100k at risk, then you would also seek to have diversified investments.  For example, there are people with much more than me with Pirate.

I am also not messing around with other people's business.  I have a much lower proportion of my assets deposited with BS&T having dropped from a max around 50% to currently around 20%.

What I was saying is that it makes practical sense to obtain a greater return over a decent time scale than a peaky return that only lasts a short time as the overall payoff is larger.  If you disagree with 5%/wk for six months versus 10%/week for a month, then that is just silly.

[imsaguy]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

Pirate was getting all sorts of attention long before PPT.  We are trying to counter Pirate risk by offering the insurance.

Yes he was, from lenders. Now he gets attention from jealous haters.
Nice try tho. Did I touch a soft spot? Sorry, I have the tendency to do that...
Also, your insurance is a joke from a mathematical perspective. You can fool the fools, or even fool yourself, but you don't fool me.

nice attitude, but no, you didn't touch a soft spot.  Haters are gonna hate, regardless.  Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

[coin_toss]

I don't have a problem with pass throughs per se, but i would like to see you guys offering them setting some kind of limit to the amount of space you offer. At the moment they are growing exponentially and it is only a matter of time before people start getting force refunded and have to invest with whoever opened the first account. That means trusting 2 people rather than 1, and is something I would prefer to avoid.

[Raoul Duke]

The lazy Starfish likes the poll and has actually said interest rate is a bit high.

However, before someone shoots me, I'm thinking about the longer term and not the nice ride that the past six months has delivered.  There are some structural things that can be done to improve the whole deposit/interest rate trade-off to promote the business, and while 7% is nice for another month, even if it was 5% for another six months that would be better.

1- I only get 5.6%, so, what's your beef?
2- You talk like that because you're making money from the GLBSE speculators

Stop messing around with others business. If Pirate is getting all this unwarranted attention he can thank you and your PPT buddies.
If you wish a lower interest rate, be my guest: withdraw all your money and put it in a bank or on hashking program.

psy, I don't have "a beef"  However, I actually work reasonably hard at what I do, and built my initial deposit with pirate from 70-ish coins to 4000.  I have also helped a few other people get to their next tier of interest.  You also obviously don't understand (and can not actually know) all of the things I'm doing to make my money in the bitcoin world, and speculating on GLBSE is still only a small part of it.  (I know of several people that are doing that much more seriously than I am.)  When/if you have $20k or $100k at risk, then you would also seek to have diversified investments.  For example, there are people with over USD100k in with Pirate, much more than I do.

I am also not messing around with other people's business.  I have a much lower proportion of my assets deposited with BS&T having dropped from a max around 50% to currently around 20%.

What I was saying is that it makes practical sense to obtain a greater return over a decent time scale than a peaky return that only lasts a short time as the overall payoff is larger.  If you disagree with 5%/wk for six months versus 10%/week for a month, then th!at is just silly.

Like I said, I'm already making 5%. the one making 10% is you and your PPT buddies. If you think 10% is too much, get out. Who's keeping you here?

[PatrickHarnett]

Like I said, I'm already making 5%. the one making 10% is you and your PPT buddies. If you think 10% is too much, get out. Who's keeping you here?

Not true, but then most of the stuff said about BS&T isn't true.

Plus, no one is keeping me "there" and you obviously were not listening to what I was saying earlier.

[Raoul Duke]

Case in point:
PPT announcement thread, April 13 https://bitcointalk.org/index.php?topic=76594.0
Second PPT thread, April 19 https://bitcointalk.org/index.php?topic=77237.0
First FUD thread about Pirate, April 24: https://bitcointalk.org/index.php?topic=77889.0

Before that thread every nay sayer told it on the main BS&T thread(this one) and quickly gave up.
The pattern is here for everyone to see.
Now, Patrick, tell me, who's in it for a quick buck? Me or you and your PPT buddies?
The greatest blind is the one that refuses to see...

[PatrickHarnett]

I believe there are other, earlier threads that talk about BS&T and how it is a scam or otherwise illegal enterprise.  It is also a personal opinion that "curious" was a duplicate account of one of those people and wanted to highlight it to detract from BS&T and towards another, competing investment.

Also, while the PPT was announced back on 13 April, there was a particular reason for doing that, and as you are aware it was due to a market opportunity that had been announced a month earlier.  I was happily providing loans to people around that time at higher projected rates.  Like many activities, the six members of PPT committed risk capital to something that might have failed completely.  Instead, it worked well, spawned copycat schemes and generated envy from people who didn't think of it first.  Similarly, much of the hate that flies around the forum is from people that didn't have their bets pay off.

(Edit: I see you added the newbie PPT thread:  Simple advertising.)

If you're in for a "quick buck" I'm not sure, nor do I need to know.

I don't consider bitcoin or any of the pieces of it as "a quick buck", but then we probably agree to disagree on that point.  If I had wanted that (or the other buddies) then we might have sold the whole thing back then, and having people request access to the profits that we are making (including from today's auction), provided a mechanism for people to do that.  Most of my attention is turning to six-month plus activities rather than capitalising on GLBSE bubbles or other short-term issues, because, I am considering the  longer-term, and hence why I can rationally suggest lower interest rates are probably better than higher.

I could write to Pirate and ask for a reduced interest special rate, but that might be hard for him to implement, and as part of a diversified portfolio, it does actually make sense for me to have assets allocated there.

[coblee]

Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

I wouldn't say insurance is a joke, but mathematically speaking, it just increases the profit as oppose to reducing the risk. So because of the insurance, it may look like a less risky investment than a pure pirate investment. But it really is not. The risk is exactly the same, but your profit is actually more than what you thought it was.

I will give you an example. Lets say you purchased a PPT bond for 1.10, which will be bought back at 1.28. So your 4 week interest is (1.28 - 1.10)/1.10 or 16.4% with a .32 insurance if pirate defaults. But think of it another way. Since you always get paid back the .32 whether or not pirate defaults. It's as if you just set aside .32 bitcoins in a different wallet (or address) that you own, and at the end of the 4 weeks, you transfer those .32 bitcoins back to yourself. Then effectively, instead of the PPT bond costing 1.10, it now costs 1.10 - .32 or .78 btc. And instead of being bought back for 1.28, it now will be bought back for 1.28 - .32 = .96 btc. So your effective interest is (.96 - .78)/.78 or 23.1%. So mathematically, the 16.4% interest with a .32 "pirate default" insurance is the same as 23.1% interest with no insurance.

I think the insurance does more to muddy the actual risk and reward calculation for the bond. It makes it harder to do an apples to apples comparison with investing with pirate directly and with other pirate pass through bonds or deposit programs. But that's just what I think.

[coblee]

Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

I wouldn't say insurance is a joke, but mathematically speaking, it just increases the profit as oppose to reducing the risk. So because of the insurance, it may look like a less risky investment than a pure pirate investment. But it really is not. The risk is exactly the same, but your profit is actually more than what you thought it was.

I will give you an example. Lets say you purchased a PPT bond for 1.10, which will be bought back at 1.28. So your 4 week interest is (1.28 - 1.10)/1.10 or 16.4% with a .32 insurance if pirate defaults. But think of it another way. Since you always get paid back the .32 whether or not pirate defaults. It's as if you just set aside .32 bitcoins in a different wallet (or address) that you own, and at the end of the 4 weeks, you transfer those .32 bitcoins back to yourself. Then effectively, instead of the PPT bond costing 1.10, it now costs 1.10 - .32 or .78 btc. And instead of being bought back for 1.28, it now will be bought back for 1.28 - .32 = .96 btc. So your effective interest is (.96 - .78)/.78 or 23.1%. So mathematically, the 16.4% interest with a .32 "pirate default" insurance is the same as 23.1% interest with no insurance.

I think the insurance does more to muddy the actual risk and reward calculation for the bond. It makes it harder to do an apples to apples comparison with investing with pirate directly and with other pirate pass through bonds or deposit programs. But that's just what I think.

Disclosure: I've actually bought some PPT bonds. When it first came out, I was able to buy a few PPT.A for an effective interest rate better than pirate. I was the one that bought 64 shares at 1.068.
Effective cost = 1.068 - .32 = .748
Effective buyback = 1.28 - .32 = .96
Effective interest = (.96 - .748)/.748 = 28.34%
So it's better than the non-compounding pirate rate of 28% in 4 weeks.

[JusticeForYou]

Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

I wouldn't say insurance is a joke, but mathematically speaking, it just increases the profit as oppose to reducing the risk. So because of the insurance, it may look like a less risky investment than a pure pirate investment. But it really is not. The risk is exactly the same, but your profit is actually more than what you thought it was.

I will give you an example. Lets say you purchased a PPT bond for 1.10, which will be bought back at 1.28. So your 4 week interest is (1.28 - 1.10)/1.10 or 16.4% with a .32 insurance if pirate defaults. But think of it another way. Since you always get paid back the .32 whether or not pirate defaults. It's as if you just set aside .32 bitcoins in a different wallet (or address) that you own, and at the end of the 4 weeks, you transfer those .32 bitcoins back to yourself. Then effectively, instead of the PPT bond costing 1.10, it now costs 1.10 - .32 or .78 btc. And instead of being bought back for 1.28, it now will be bought back for 1.28 - .32 = .96 btc. So your effective interest is (.96 - .78)/.78 or 23.1%. So mathematically, the 16.4% interest with a .32 "pirate default" insurance is the same as 23.1% interest with no insurance.

I think the insurance does more to muddy the actual risk and reward calculation for the bond. It makes it harder to do an apples to apples comparison with investing with pirate directly and with other pirate pass through bonds or deposit programs. But that's just what I think.

Yes, but it can be easier or more complicated.

Previous purchasers have contributed to the insurance and since Pirate didn't default and continues not to default then eventually the lost profit diminishes with time up to the availability rate.

If the trust takes 1% of profit per week and applies it to insurance, then eventually the insurance is fully funded at 100%. Which at that time will be a boon for that investor if he is trusted since peoples funds are fully insured to 'guarantee' no loss. It will be a self funded FDIC up to a preset amount (availability in this case).

Then the investors profits are back at 100% also.

What makes it even more interesting is the investor could keep the 1% draw on after being fully insured and start re-investing with others and offer a higher payout but slowly decreasing the insurance to an acceptable amount. Would definitely put pressure on the others to follow suit or lose customers.

[brendio]

Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

I wouldn't say insurance is a joke, but mathematically speaking, it just increases the profit as oppose to reducing the risk. So because of the insurance, it may look like a less risky investment than a pure pirate investment. But it really is not. The risk is exactly the same, but your profit is actually more than what you thought it was.

I will give you an example. Lets say you purchased a PPT bond for 1.10, which will be bought back at 1.28. So your 4 week interest is (1.28 - 1.10)/1.10 or 16.4% with a .32 insurance if pirate defaults. But think of it another way. Since you always get paid back the .32 whether or not pirate defaults. It's as if you just set aside .32 bitcoins in a different wallet (or address) that you own, and at the end of the 4 weeks, you transfer those .32 bitcoins back to yourself. Then effectively, instead of the PPT bond costing 1.10, it now costs 1.10 - .32 or .78 btc. And instead of being bought back for 1.28, it now will be bought back for 1.28 - .32 = .96 btc. So your effective interest is (.96 - .78)/.78 or 23.1%. So mathematically, the 16.4% interest with a .32 "pirate default" insurance is the same as 23.1% interest with no insurance.

I think the insurance does more to muddy the actual risk and reward calculation for the bond. It makes it harder to do an apples to apples comparison with investing with pirate directly and with other pirate pass through bonds or deposit programs. But that's just what I think.

Disclosure: I've actually bought some PPT bonds. When it first came out, I was able to buy a few PPT.A for an effective interest rate better than pirate. I was the one that bought 64 shares at 1.068.
Effective cost = 1.068 - .32 = .748
Effective buyback = 1.28 - .32 = .96
Effective interest = (.96 - .748)/.748 = 28.34%
So it's better than the non-compounding pirate rate of 28% in 4 weeks.

Your calculations are correct if you consider the opportunity cost to be zero.

Otherwise, you could put the 0.78 BTC in pirate and the 0.32 BTC in another ("lower risk"?) investment and earn some interest on it too.

[PatrickHarnett]

I was looking at this earlier today


From https://bitcointalk.org/index.php?topic=76594.msg922493#msg922493

Case 1, invest 110 coins in PPT at a buy in price of 1.05 (104.8 bonds)
Payout is either 134 coins for a profit of 24 coins, or in the event of a default, you receive 32 coins for a net loss of 88.

Case 2, Also starting with 110 coins, reserve 32 coins as self insurance, and put 88 coins into an uninsured scheme.
Position is either 32 + 78 * 1.28 = 134 (also a profit of 24) including weekly compounding, or you retain the 32 coins you started with.

Depends on the price you pay.  Call it what you will, but buyers below 1.05 will be better off "mathematically".

For those that do not have access to 2000 coins and a 7%/week account, you'll also be better off.

This is OT for this thread.

[coblee]

Insurance is a joke?  If pirate defaults, people get .32 btc per bond.  There's no gimmick to it and its better than getting nothing.

I wouldn't say insurance is a joke, but mathematically speaking, it just increases the profit as oppose to reducing the risk. So because of the insurance, it may look like a less risky investment than a pure pirate investment. But it really is not. The risk is exactly the same, but your profit is actually more than what you thought it was.

I will give you an example. Lets say you purchased a PPT bond for 1.10, which will be bought back at 1.28. So your 4 week interest is (1.28 - 1.10)/1.10 or 16.4% with a .32 insurance if pirate defaults. But think of it another way. Since you always get paid back the .32 whether or not pirate defaults. It's as if you just set aside .32 bitcoins in a different wallet (or address) that you own, and at the end of the 4 weeks, you transfer those .32 bitcoins back to yourself. Then effectively, instead of the PPT bond costing 1.10, it now costs 1.10 - .32 or .78 btc. And instead of being bought back for 1.28, it now will be bought back for 1.28 - .32 = .96 btc. So your effective interest is (.96 - .78)/.78 or 23.1%. So mathematically, the 16.4% interest with a .32 "pirate default" insurance is the same as 23.1% interest with no insurance.

I think the insurance does more to muddy the actual risk and reward calculation for the bond. It makes it harder to do an apples to apples comparison with investing with pirate directly and with other pirate pass through bonds or deposit programs. But that's just what I think.

Disclosure: I've actually bought some PPT bonds. When it first came out, I was able to buy a few PPT.A for an effective interest rate better than pirate. I was the one that bought 64 shares at 1.068.
Effective cost = 1.068 - .32 = .748
Effective buyback = 1.28 - .32 = .96
Effective interest = (.96 - .748)/.748 = 28.34%
So it's better than the non-compounding pirate rate of 28% in 4 weeks.

Your calculations are correct if you consider the opportunity cost to be zero.

Otherwise, you could put the 0.78 BTC in pirate and the 0.32 BTC in another ("lower risk"?) investment and earn some interest on it too.

You are absolutely right. In my case, I have btc saved in an offline wallet that earns me absolutely 0 interest. I don't think anyone would have all their coins fully invested in different programs, so their opportunity costs are zero or close to zero.

I also didn't take into consideration the risk of PPT defaulting OR GLSBE getting hacked and losing their database (like bitcoinica!). So keeping the .32 bitcoins with PPT has an added risk when compared to just keeping it in your own wallet.

[coblee]

I was looking at this earlier today


From https://bitcointalk.org/index.php?topic=76594.msg922493#msg922493

Case 1, invest 110 coins in PPT at a buy in price of 1.05 (104.8 bonds)
Payout is either 134 coins for a profit of 24 coins, or in the event of a default, you receive 32 coins for a net loss of 88.

Case 2, Also starting with 110 coins, reserve 32 coins as self insurance, and put 88 coins into an uninsured scheme.
Position is either 32 + 78 * 1.28 = 134 (also a profit of 24) including weekly compounding, or you retain the 32 coins you started with.

Depends on the price you pay.  Call it what you will, but buyers below 1.05 will be better off "mathematically".

For those that do not have access to 2000 coins and a 7%/week account, you'll also be better off.

This is OT for this thread.

Your calculations are wrong. For case 1, if pirate defaults, you get 33.536 coins back because you had 104.8 bonds at .32 each.
By my calculation, break-even is 1.07 when your uninsured investment is non-compounding pirate rate of 28% return in 4 weeks.

Case 1:
107 coins to buy 100 PPT bonds at 1.07
  no default: 100 * 1.28 = 128
  default: 100 * .32 = 32

Case 2:
Keep 32 coins on the side and use 75 coins to invest in an uninsured 28% pirate program
  no default: 32 + 75 * 1.28 = 128
  default: 32 + 0 = 32

[PatrickHarnett]

And to duplicate the other thread, thanks for looking and thinking about this.  The point you have reinforced is that there is a benefit.  (the degree of benefit depends on individual circumstance)

[RoloTonyBrownTown]

Right, well I'm fairly keen to deposit my stash here, but as I haven't really traded with anyone already a member it seems I can't.  As I'd only be depositing and sitting on that (rather than having it sitting in my wallet doing nothing) I'm not sure what sort of risks I'd pose or malicious activities I'd be capable of.

Is this likely to opened up a little more in the future or am I just out of luck?