.

[imsaguy]

So...what do you actually do with the money to generate profit?

Basically, what it boils down to is: we (6 of us) each took 400 btc and put it into a fund we don't touch.  the coins just sit there.  We offer ~2k bonds each week, take the money and invest with pirate.  After 28 days, we take the money out and pay each bond holder 1.28 btc.  Whatever is left over, we keep.  If pirate should happen to default, we'll use the 2400 in our reserve fund to pay on the bonds, giving each person about 25% of their money back.  Essentially, we're covering at least 25% of the default.

so to loop back to your original question, we invest with pirate.  We, the 6, make money off the premium that people buy the bonds for.

Ok. That's a reasonable answer that makes sense. Thank you.

Of course my next questions is, how does Pirate create profit?

Straddle trades? Some kind of bitcoin options? An event-driven hedging technique?

I'm trying to wrap my head around this and other investments I see on this site, but the answers seem to be long on hype and short on substance. I know that when it comes to investing other people's money and actually generating profits, answers to such inquiries tend to be cagey, but briefly explaining one's strategy doesn't reveal the process. Extraordinary alpha over just about any benchmark merits an explanation. What say you, Pirate?

In his original OP he alludes to what he does, but he will not reveal anything more, even with all the prodding that people have done.  So long as he continues to pay as agreed, there isn't a problem.  If this doesn't suit one's risk profile, there are plenty of other operations going on.  It does grow tiresome to have people continue to post the same FUD about ponzi when there's ultimately nothing conclusive to back it up.  I am not saying you're spreading FUD, you asked legit questions that I haven't seen you ask before so they're fair game.

[imsaguy]

I hope not!

Back to the corner, you!!

[Tesla13]

so there will not be any european bonds???

[Asunder8]

Sales results for all sales are posted here:  https://docs.google.com/spreadsheet/ccc?key=0An2G-HmYRtr3dEFBMV9uN3FveU0tMGREdjVaZUVRTGc

The statistics for every PPT sale, including this most recent one are:

Code:

                 PPT.A           PPT.B           PPT.C           PPT.D           PPT.E

Minimum Bid     1.06800000      1.07000000      1.08001000      1.09999999      1.08501000
Maximum Bid     1.10000000      1.11110000      1.10250000      1.10500000      1.15000000
Average Bid     1.07254632      1.08122156      1.08373618      1.10020628      1.11757997
Bid Stdev       0.00482412      0.00931142      0.00270252      0.00075877      0.00952852
Maximum Yield   19.85%          19.63%          18.52%          16.36%          17.97%
Minimum Yield   16.36%          15.20%          16.10%          15.84%          11.30%
Average Yield   19.34%          18.38%          18.11%          16.34%          14.53%

Minimum Bid     1.00000002      1.03800000      1.04100000      1.01100009
Maximum Bid     1.13000000      1.30000000      1.08000000      1.07000000
Average Bid     1.03798202      1.06624577      1.04626778      1.03295503
Bid Stdev       0.02785503      0.07059584      0.00480807      0.01157461
Maximum Yield   28.00%          23.31%          22.96%          26.61%
Minimum Yield   13.27%          -1.54%          18.52%          19.63%
Average Yield   23.32%          20.05%          22.34%          23.92%

As you can see this most recent sale was the best one for our customers so far!  An average of 23.92% return for a PPT bond that is insured for 0.32 BTC per bond!

Please join us next week for the PPT.E auction.  See the OP for details.  Thanks everyone!

Stochastic asked for standard deviations in the other thread, so I build a weighted stdev calculation function in GDocs to calculate these.

PPT.B #2 if you remove the silly 1.3 bid, the stdev falls to 0.00423054

[Asunder8]

THANKS!  If you give me the formula I will add it to my spreadsheet and display the values for all future sales.

PM sent

[Trance104]

Good morning,

I have a few questions about the ppt.div

How long do you expect to continuously payout dividends? I imagine that an answer for that is *estimated*, but an estimate is still expected.

Do you see the PPT.div expiring or being discontinued at anypoint within the next 6 months? *estimates* on this are also acceptable as no one can predict the future.

At what date do you have to own the share to receive the dividend for that share? For example, I personally purchased shares yesterday (06/25/12). When can I expect my first dividend payment?

Also, I'm assuming dividend payments get credited directly to your "brokerage* account, correct?

Is there any way to reinvest dividends? If not, it might be worth looking in[Suspicious link removed] You could still maintain the 9000 share count and base dividend reinvestments on open buy orders based on the payout amount (Could be manipulated, probably not a good idea).

OR

When it comes time to do dividend payments, you can try to *buy-back* shares at a set premium based on the volume of dividend payments that want to be revested and either A) buy all shares back at a small premium and the redistribute the shares appropriately (according to the amount of people that want to have their shares revested) or, B) If there aren't as many willing to sell based on the buyback, issue a partial revestment and a partial payment. The work could be more painful, especially weekly.

I understand that the reinvestment may not be possible to do the brokerage itself.


Answering those questions might shed some light on those "dividend" chasers that aren't into *risky* or *get rich quick* shindigs, because I didn't find much info on the PPT.div, I decided to ask in the thread itself.

Good work and thanks for the effort that you've put forth in trying to keep this market going.



*A little about me*

I invest in dividend stocks on my own time and work for a bank. I do mine for BTC for profit currently. I am also really interested in getting a FPGA set-up going, but still establishing *advanced* technical know-how.

Cheers!!!

[Trance104]

You're the best!!!! Thank you so much and everything sounds great!!!


Good work on laying the "ground-work" for the future of trading shares of companies in BTC.

[cedus]

PPT NEWS for Tuesday 5/15/2012:

5) Please check out the new PPT.DIV shares.  These allow you to invest in PPT and earn dividends from the operation of PPT and all the various PPT bonds.  Bids are being take at:  https://glbse.com/asset/view/PPT.DIV  and the estimated dividends for the next four weeks are:

Code:

Issue  Bonds Sold  Estimated Income  Estimated Dividend
PPT.A       1,500      142.89848614          0.01587761
PPT.B       2,000      260.34919275          0.02892769
PPT.C       2,000      239.38183570          0.02659798
PPT.D       2,500      383.01255970          0.04255695

Do you provide this estimated income/dividend info somewhere more regularly or was this a one-off? Haven't seen updated info anywhere.

[pron241]

I will check this when I get more coins 

[Fray]

If I buy these will you back them with gold or silver?  Preferably physical coins or bars.  Thanks.

[CodesInChaos]

This is a high risk investment. There is a significant chance that you won't get any of your money back. So if you invest, please do it only with a small fraction of your money.

Some people, including myself believe this is a Ponzi Scheme. So I recommend not investing at all, but if you do, be careful and don't invest too much. If you're interested why people think this is or isn't a Ponzi, look into other sub-forums, such as the trading forum.

[mystery2048]

If one was to buy, what exactly would one be investing in?

[cedus]

If one was to buy, what exactly would one be investing in?

From the FAQ:

What will you do with the money collected from the bond auctions?
At least 1.00 BTC from every bond sold at auction will be deposited directly into an account at Bitcoin Savings and Trust (formerly First Pirate Savings and Trust).

If you mean eventually, only Pirate knows. Live with it or do not invest.

[Ocean6]

New to this. Will be putting 20-25% of my initial BTCs into one of the best PPTs as my high risk portion.

[PayPal]

I can haz 7% too? xD

[Frankie]

I think posting this targeting newbies is irresponsible.

For the record, I (and many other people) believe that Pirate is operating a Ponzi scheme.  I'd urge all possible investors to research Ponzi schemes (Wikipedia, Bernie Madoff, etc) and decide for themselves whether they want to risk losing their money.

The major advantage of the bonds is that you will lose "only" 68% of your money (or more if the bond authors break their promise), instead of 100%. In exchange for this privilege, your rate of return is half or less of what Pirate is paying out to other people (33.5% / 30 days).

I think the word "Ponzi scheme" is overused, but this must be true. It seems more naked than most because there's not even an attempt to explain how the "fund manager" is generating profit. And even if they did generate profit, it would raise the question about why they don't self-finance. A credit card cash advance, for example, would be much cheaper to the "fund manager" without the overhead of making a zillion tiny deposits/repayments.

It's a scam almost by definition, just waiting for an opportune moment to never be seen again.  Compare all the similar scams that happened on Second Life, which were shaken out at the same time when Lindon banned casinos.

Yet a lot of the folks here get riled up and defend it against common sense advice?  I don't get that.

[Frankie]

A few more posts and you will be a able to spread your wisdom over then entire forum.  Be sure to drop by the dozen or so theads that have debated this entire Pirate/Ponzi issue ad nauseum.

Thanks for the bump.

Sounds like debating whether the earth is round. Not a stimulating debate...

Makes sense to point out that it's a scam on the newbie thread, but I imagine I'll leave the believers elsewhere in peace.

[cedus]

However, for anyone else who is interested:
The automatic redemption of the PPT.E bonds is about two hours away.

Third PPT.x sell back for me. Everything working like a charm. Thank you.

[Factory]

I think posting this targeting newbies is irresponsible.

For the record, I (and many other people) believe that Pirate is operating a Ponzi scheme.  I'd urge all possible investors to research Ponzi schemes (Wikipedia, Bernie Madoff, etc) and decide for themselves whether they want to risk losing their money.

The major advantage of the bonds is that you will lose "only" 68% of your money (or more if the bond authors break their promise), instead of 100%. In exchange for this privilege, your rate of return is half or less of what Pirate is paying out to other people (33.5% / 30 days).

I think the word "Ponzi scheme" is overused, but this must be true. It seems more naked than most because there's not even an attempt to explain how the "fund manager" is generating profit. And even if they did generate profit, it would raise the question about why they don't self-finance. A credit card cash advance, for example, would be much cheaper to the "fund manager" without the overhead of making a zillion tiny deposits/repayments.

It's a scam almost by definition, just waiting for an opportune moment to never be seen again.  Compare all the similar scams that happened on Second Life, which were shaken out at the same time when Lindon banned casinos.

Yet a lot of the folks here get riled up and defend it against common sense advice?  I don't get that.

I completely agree. If Pirate was actually able to make the returns he claims to, there is 0 reason why he wouldn't be doing it on actual exchanges where there is more liquidity and leverage.

[odolvlobo]

I think posting this targeting newbies is irresponsible.

For the record, I (and many other people) believe that Pirate is operating a Ponzi scheme.  I'd urge all possible investors to research Ponzi schemes (Wikipedia, Bernie Madoff, etc) and decide for themselves whether they want to risk losing their money.

The major advantage of the bonds is that you will lose "only" 68% of your money (or more if the bond authors break their promise), instead of 100%. In exchange for this privilege, your rate of return is half or less of what Pirate is paying out to other people (33.5% / 30 days).

I think the word "Ponzi scheme" is overused, but this must be true. It seems more naked than most because there's not even an attempt to explain how the "fund manager" is generating profit. And even if they did generate profit, it would raise the question about why they don't self-finance. A credit card cash advance, for example, would be much cheaper to the "fund manager" without the overhead of making a zillion tiny deposits/repayments.

It's a scam almost by definition, just waiting for an opportune moment to never be seen again.  Compare all the similar scams that happened on Second Life, which were shaken out at the same time when Lindon banned casinos.

Yet a lot of the folks here get riled up and defend it against common sense advice?  I don't get that.

In my view, regardless if BTCS&T is a ponzi scheme or not -- BTCS&T and the various PPT bonds are bad for bitcoin.

First: the 7% weekly return is going to kill mining bonds. They can't compete with that rate. More and more bitcoin investment is going to go into these pirate bonds and miners will no longer have the capital necessary to improve their hardware and remain competitive. Perhaps this is pirateat40's plan?

Second: There is no legitimate way for a business to make a profit while paying a weekly interest of 7%. Pirateat40 must be engaged in something illegitimate (at best), though it is more likely to be something illegal, if not a ponzi scheme. Whatever it is, it can only be bad for bitcoin, and the bigger his operation gets, the worse the outcome will be. Don't support his activities.

So, I implore everyone to ratchet down their greed a little. For the good of bitcoin, please settle for 2%-3% per week, avoiding the pirate bonds even if they pay twice that. You will still get a great return -- 2%-3% per week is ridiculous in real-world terms (long-term Treasury bonds pay only the equivalent of 0.05% per week).