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Sukrim
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April 19, 2012, 04:13:58 PM
 #101

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

Edit:
Update:
1505 shares with valid bets, totalling 1536.1578 (average price ~1.021, issuer gets 31.1578)

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Raoul Duke
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April 19, 2012, 04:23:52 PM
 #102

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

uh?? Those shares are also the equity used to distribute the operators profits.
Or do you think they will not profit from it?
If anything you should be glad that there are people willing to invest and by doing that secure more than the 25% default insurance. Maybe that's a sign they don't believe Pirate will default...

The00Dustin
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April 19, 2012, 05:00:44 PM
 #103

Once the market opens this bid is lurking there just waiting for someone to make a mistake in their sell order decimal place or something.
Or for someone to sell a worthless asset to in the case of a default if you decide to pay out using a dividend instead of a recall.  Be warned that the moron that gets screwed over for having that order out will certainly blame your party if such a thing happens, so I recommend avoiding the dividend payout option at all costs.  Presumably you are already aware of the proper way to pay off a bond (and presumably recall will be the new proper way), but I wanted to put this out there in case you hadn't previously witnessed or considered it.
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April 19, 2012, 05:06:39 PM
 #104

I did not check your math but did you remember to remove the order for 86 bonds at 0.01 BTC?  We will not sell under 1.000 so this order will not be filled by us in the auction.  Once the market opens this bid is lurking there just waiting for someone to make a mistake in their sell order decimal place or something.  But if you included this order then your average is off a bit.
Yes, both from shares bid and amount bid side, so the average should be ok. Smiley

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April 19, 2012, 05:55:40 PM
 #105

Thanks.  Yes we are aware of the issues with paying a 1.28 dividend so we will not do that.  The plan of record is to use the new buy back function being implemented by GLBSE which will basically:

1) Halt all trading and cancel all active orders
2) Send out 1.28 (in our case) per bond to the bondholders of record at that time
3) Move all the bonds back into our account
I was actually referring to earlier discussion of a .32 dividend in case of default.  If the same procedure is carried out in case of default, though, that won't be a problem (the moron will at least get the .32, and the persons who figured there was a default coming will be better off).
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April 19, 2012, 08:35:58 PM
 #106

Have you thought about offering PPT shares publicly?

Could be interesting. You may rise more capital to cover a greatest portion of the bond, effectively sharing the risk and the reward of the entity...

I would go for 1 share of the main PPT if they were being offered. PPT.A or PPT.B don't interest me the slightest bit Wink
Shares of PPT are not publicly available at this time.

We do realize there is a storng market for these shares as we have gotten many emails, messages and and few posts like these asking about them.

We have discussed this and I am sure that we will be discussing it again in the future.

As I have said before, those of you that have bids on PPT stock can remove them.  Or, at least don't insult us with such low bids.  1.00 and 1.01 BTC?  Really?  Look at the chart Wink

I don't have any buy order, so don't worry, I'm not insulting you... Wink

Anyway, if you do something like this, you can make the share worth whatever you like. Personally, I won't put 100 coins in this, but if you issue a lot of shares, take for yourself whatever percentage it takes to represent the capital you're already covering, and sell the rest, I may put 1 or 2, maybe 5... even 10 coins in it... with all the other people that may be interested, you can raise a significant capital... and covering better the bonds would mean highest bids, increased margin, lowest risks...
stochastic
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April 20, 2012, 01:32:44 AM
 #107

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

If anything you should be glad that there are people willing to invest and by doing that secure more than the 25% default insurance.


I am only 25% glad.

Introducing constraints to the economy only serves to limit what can be economical.
Raoul Duke
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April 20, 2012, 02:03:58 AM
 #108

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

If anything you should be glad that there are people willing to invest and by doing that secure more than the 25% default insurance.


I am only 25% glad.

You are not more glad because they don't want to sell those 100 BTC shares to reduce risk, hence reducing their profits also.

PatrickHarnett
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April 20, 2012, 02:18:27 AM
 #109

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

If anything you should be glad that there are people willing to invest and by doing that secure more than the 25% default insurance.


I am only 25% glad.

You are not more glad because they don't want to sell those 100 BTC shares to reduce risk, hence reducing their profits also.

Perhaps some additional information (really a restatement) will clarify.

We came up with an idea to provide a partially insured bond that would include a reserve of unencumbered bitcoins.  The total size ultimately growing to 32% or 8000 bonds or 2560 bitcoins.  The six founding shareholders are committed to provide this necessary level of funding.  There is no additional sweetener to cover the many hours that we have collectively put into this venture through extra shares or "fees".

If additional shares were issued and sold, it would not necessarily increase the reserve as we could simply reallocate the existing shares (i.e. transfers).  Also, any surplus over the agreed reserve could be paid as dividends to the PPT shareholders - nothing particularly fancy about that either.  Profits are driven by any margin between the sale of bonds and the interest due, not the number or value of the PPT shares.

I might also point out that in the event of a Pirate default, an event that some people consider certain at some stage, the PPT shareholders will suffer a loss of their investment (the above mentioned 2560 coins).
Raoul Duke
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April 20, 2012, 02:24:35 AM
 #110

Ok, I see I used the wrong word.

I should've said "sell more 100BTC shares" instead of "sell those 100 BTC shares".

But, yeah, your statement still stands. You guys had the work, you wish to be the only ones to be rewarded and because of that you don't want to share the risk or even reduce the risk to PPT.x bond holders. Understandable!

I just hope I and other depositors don't get fucked* because of your greediness...

*booted out of BS&T

btw, 6 founding shareholders? I remember perfectly when you opened the thread there we're only 5 founding shareholders and only 5 PPT shares valued on 100 BTC each. Care to explain the discrepancy? Especially because 1 more "founding" shareholder was added but the 25% insurance in case of default remained the same...

You guys clearly don't want to reduce the risk to your bond holders, which will be the ones to fund your venture.

PatrickHarnett
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April 20, 2012, 02:40:58 AM
 #111

Ok, I see I used the wrong word.

I should've said "sell more 100BTC shares" instead of "sell those 100 BTC shares".

But, yeah, your statement still stands. You guys had the work, you wish to be the only ones to be rewarded and because of that you don't even want to share the risk. Understandable!

I just hope I and other depositors don't get fucked* because of your greediness...

*booted out of BS&T

Well, we are going to be doing more of those 100 BTC shares, but they are not open market at this stage.  The risk/return ratio isn't set yet and that will take a little while to sort out.

Anyway, on current bidding, bond holders will be making about 26% and our "greediness" will net us 2% and given the reserves set aside (not earning interest in other things), that puts us in a net loss. 

As for screwing up other people's deposits, current information is that it is not very likely.  Would you prefer that as a separate exercise I dump more coins into Pirate's scheme directly? 
Raoul Duke
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April 20, 2012, 02:50:29 AM
 #112

As for screwing up other people's deposits, current information is that it is not very likely.  Would you prefer that as a separate exercise I dump more coins into Pirate's scheme directly?


Yes, I would. But you're clearly not going to do that. You'll instead use money from others for it and won't risk your money.

About the net loss: You can throw sand at my eyes all you want, but rest assured you won't blind me Wink


stochastic
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April 20, 2012, 02:54:15 AM
 #113

Ok, I see I used the wrong word.

I should've said "sell more 100BTC shares" instead of "sell those 100 BTC shares".

But, yeah, your statement still stands. You guys had the work, you wish to be the only ones to be rewarded and because of that you don't even want to share the risk. Understandable!

I just hope I and other depositors don't get fucked* because of your greediness...

*booted out of BS&T

Well, we are going to be doing more of those 100 BTC shares, but they are not open market at this stage.  The risk/return ratio isn't set yet and that will take a little while to sort out.

Anyway, on current bidding, bond holders will be making about 26% and our "greediness" will net us 2% and given the reserves set aside (not earning interest in other things), that puts us in a net loss. 

As for screwing up other people's deposits, current information is that it is not very likely.  Would you prefer that as a separate exercise I dump more coins into Pirate's scheme directly? 


Are you stating PPT is insolvent?   Wink

This 2% is not quite true.  PPT is getting more than 2% as they are putting up .32 BTC and receiving 7% on 1 BTC compounded weekly, so that is really a 9.375% return.  This does not include any instant return if shares sell for more than 1.0 BTC.  Money in hand now is better than later.

Introducing constraints to the economy only serves to limit what can be economical.
stochastic
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April 20, 2012, 03:00:01 AM
 #114

I thought the main PPT is only used as "bank" for the insurances, not paying out the earnings from PPT.X auctions? Why would you buy shares at 100 BTC each there that are only used to be distributed in case of pirate's default?

If anything you should be glad that there are people willing to invest and by doing that secure more than the 25% default insurance.


I am only 25% glad.

You are not more glad because they don't want to sell those 100 BTC shares to reduce risk, hence reducing their profits also.

I have to say I was joking about the 25% glad party, I meant to say is I am 75% unhappy.  Kidding aside I think what PPT is doing is great.  One of the great tools of bitcoin is being able to make small and quick investments.

Introducing constraints to the economy only serves to limit what can be economical.
Raoul Duke
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April 20, 2012, 03:04:06 AM
 #115

Yes, we added one more founder.  He was on the fence when we first proposed this to him and first posted to the forum.  After a while he came around and bought his share.   Note that in addition to the 25% we have now also taken on the entire risk of changes to rate from BS&T etc.

EDIT:  So, in fact we have reduced the bondholders risk over the time we have been working things out.

OK, clear. And true.

BTW, from the bottom of my heart I wish you guys(and the ones who invest in your fund) are profitable, and you know why Cheesy

Also, stochastic, ROFL at the 75% unhappy Grin

PatrickHarnett
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April 20, 2012, 03:04:20 AM
 #116

As for screwing up other people's deposits, current information is that it is not very likely.  Would you prefer that as a separate exercise I dump more coins into Pirate's scheme directly?


Yes, I would. But you're clearly not going to do that. You'll instead use money from others for it and won't risk your money.

About the net loss: You can throw sand at my eyes all you want, but rest assured you won't blind me Wink



Actually, I am risking my own money - that's what the insurance fund is for.  I could easily lose (and expect to at some stage) drop 500 coins in insurance payouts if/when pirate defaults.  However, I would prefer that it gets unwound nicely and I don't lose 500 coins in this.  I am in it for some profit and it is a good idea making one of the more lucrative schemes available to those who currently do not have access.  On that basis, it's a good idea, and one people could easily replicate (low barrier to entry).

Picking up stochastic's points:
Certainly PPT is solvent and can easily meet its obligations - currently we are over-secured (even with tomorrows bond sale)

And also yes the gain is higher than 2% because of the compounding, (but not on the 0.32 that we are putting up - that cannot be invested).  As mentioned elsewhere, 1BTC invested for four periods is 1.31 and we're paying 1.28.  So 3% plus any premium.
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April 20, 2012, 03:05:04 AM
 #117

Quote
This 2% is not quite true.  PPT is getting more than 2% as they are putting up .32 BTC and receiving 7% on 1 BTC compounded weekly, so that is really a 9.375% return.  This does not include any instant return if shares sell for more than 1.0 BTC.  Money in hand now is better than later.

The point wasn't in the exact numbers the point is that our "greediness" will be temperred by the market's (your) "greediness"

I get the point, I just didn't want people to think PPT is unprofitable for the issuers as that would not be good.

Introducing constraints to the economy only serves to limit what can be economical.
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April 20, 2012, 03:09:02 AM
 #118

Quote
This 2% is not quite true.  PPT is getting more than 2% as they are putting up .32 BTC and receiving 7% on 1 BTC compounded weekly, so that is really a 9.375% return.  This does not include any instant return if shares sell for more than 1.0 BTC.  Money in hand now is better than later.

The point wasn't in the exact numbers the point is that our "greediness" will be temperred by the market's (your) "greediness"

I get the point, I just didn't want people to think PPT is unprofitable for the issuers as that would not be good.

roflmao
Sukrim
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April 20, 2012, 08:37:38 AM
 #119

Wow, GLBSE surely now gets Bitcoins coming in like a medium sized exchange! Shocked

2231 valid bids, 2300.4182609 BTC in valid bids, average bid 1.031, 1500 shares end at 1.012 per share. Bids lower than that would currently not get filled (and there is a crazy amount of high bids already - the upper 1/3 of currently winning bids is above 1.06)

There are more bids in here than MtGox exchanged in BTC <--> EUR in the last 24h (~1600 BTC)!

I guess, I'll just take my chances next week and hope for a lower price when the excitement might have cooled down a bit...

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PatrickHarnett
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April 20, 2012, 09:17:23 AM
 #120

Wow, GLBSE surely now gets Bitcoins coming in like a medium sized exchange! Shocked

2231 valid bids, 2300.4182609 BTC in valid bids, average bid 1.031, 1500 shares end at 1.012 per share. Bids lower than that would currently not get filled (and there is a crazy amount of high bids already - the upper 1/3 of currently winning bids is above 1.06)

There are more bids in here than MtGox exchanged in BTC <--> EUR in the last 24h (~1600 BTC)!

I guess, I'll just take my chances next week and hope for a lower price when the excitement might have cooled down a bit...

Hi Sukrim,

There is the possibility that the hype will grow as people see 20%+ returns being made on small deposits/purchases.  From an issuer point of view, it is encouraging, and there is a bit of learning and track-record to establish as well.  So overall, it's looking like a good result for both sides.  I also note the volume is something to watch - investing or providing returns to 6k-8k or coins on top of everything else going on raises a different set of issues, but that's one of the interesting aspects of the bitcoin economy.

For interest, I've been tracking the bids across the day.  The 1500 issue now cuts across at 1.011 with 731 that will not get filled  (406 of bids at 1.01).  For me, I'll check again when I wake up, but I'm sure others will be looking closely at it as the close-off gets closer.

Patrick
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