A day in the life of a pirate.

[imsaguy]

Okay, not defending pirates business here, as I think its a ponzi, but:

1. Everyone withdrawing shows nothing. If I was running a legitimate business investing peoples money in wind turbines (serious pooling benefits) then I would not be able to pay out a dime or much anyway (edit: During a bank run).

... then again if I was doing that I would just show documents for turbine ownership.

2. The reason you invest other peoples money and not just your own is so you can scale up. I may only have a small amount, say 5K$, and even if I get the full return for that, taking 1-10% of other peoples return while investing 50-500K$ more still nets me extra income.

As others said it is also safer for me to "gamble" with other peoples money.

The benefit for my clients is that I would have the contacts, pooling benefits and save them time investing themselves.

So yeah pirate is likely running a ponzi, but the above are not suspicious signs.

Why do you think its a ponzi?

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[OgNasty]

Good luck pirateat40 and thanks for all you do.

[nofuture]

Okay, not defending pirates business here, as I think its a ponzi, but:

1. Everyone withdrawing shows nothing. If I was running a legitimate business investing peoples money in wind turbines (serious pooling benefits) then I would not be able to pay out a dime or much anyway (edit: During a bank run).

... then again if I was doing that I would just show documents for turbine ownership.

2. The reason you invest other peoples money and not just your own is so you can scale up. I may only have a small amount, say 5K$, and even if I get the full return for that, taking 1-10% of other peoples return while investing 50-500K$ more still nets me extra income.

As others said it is also safer for me to "gamble" with other peoples money.

The benefit for my clients is that I would have the contacts, pooling benefits and save them time investing themselves.

So yeah pirate is likely running a ponzi, but the above are not suspicious signs.

actually he's probably not running a ponzi.   what he is likely doing is very profitable. in this scam traders get burned.  his clients, his investors profit from that.  they do not get burned.  clients could get hurt if he is levered up ("scale up") with money he has borrowed from when his strategy eventually fails.  leverage works both ways.  risk/reward multiplier.   

the definition of ponzi has broadened but generally most say it is the type of scam that requires more new suckers coming in to pay off the old suckers.  it blows up when there aren't enough new suckers.  sometimes people misapply the word ponzi to any type of business fraud that happens to fail.  there's more ways to steal from people than simply running a ponzi scam.

his scam is more like penny shaving or salami slicing.

http://en.wikipedia.org/wiki/Salami_slicing

nothing new under the sun.  as old as time. 

the type of scam we see before us now ends when whatever market advantage he is exploiting disappears.  he has said that he has an advantage simply because he is a good trader.  the thing is there are a lot of smart talented traders how there.   even he found something they missed they will surely will find the same market inefficiency with haste.  they should have found it long before now once they exploit it his strategy the game is over.  there are many sharks out there and somehow he has managed to evade them for an improbable amount of time.   risk adjusted performance is way out there in the tail.  beyond six standard deviations. 

abnormal and extraordinary performance like this tell us that something is rotten in Denmark.  explanations like market manipulation, fraud, insider trading, and exchange collusion are no longer implausible.  they are the only theories that make sense.  Occam's Razor. 

[Gabi]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

[rjk]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

Stability is good if the price rise is extremely gradual. Bitcoin's deflation mechanism takes literally a century to play itself out.

[wachtwoord]

Won't it go on forever if the amount of humans (or other future full members of our society) keeps growing?

[JusticeForYou]

actually he's probably not running a ponzi.   what he is likely doing is very profitable. in this scam traders get burned.  his clients, his investors profit from that.  they do not get burned.  clients could get hurt if he is levered up ("scale up") with money he has borrowed from when his strategy eventually fails.  leverage works both ways.  risk/reward multiplier.

You know this sounds like something familiar. Can't quite figure it.

Oh, a really good Broker on Wall Street. (Pirate = EF Hutton)

Don't give him ideas, he'll start charging commissions.

[rjk]

Won't it go on forever if the amount of humans (or other future full members of our society) keeps growing?

Yes, I was only specifically referring to the block reward halving.

[MrTeal]

actually he's probably not running a ponzi.   what he is likely doing is very profitable. in this scam traders get burned.  his clients, his investors profit from that.  they do not get burned.  clients could get hurt if he is levered up ("scale up") with money he has borrowed from when his strategy eventually fails.  leverage works both ways.  risk/reward multiplier.   

the definition of ponzi has broadened but generally most say it is the type of scam that requires more new suckers coming in to pay off the old suckers.  it blows up when there aren't enough new suckers.  sometimes people misapply the word ponzi to any type of business fraud that happens to fail.  there's more ways to steal from people than simply running a ponzi scam.

his scam is more like penny shaving or salami slicing.

http://en.wikipedia.org/wiki/Salami_slicing

nothing new under the sun.  as old as time. 

the type of scam we see before us now ends when whatever market advantage he is exploiting disappears.  he has said that he has an advantage simply because he is a good trader.  the thing is there are a lot of smart talented traders how there.   even he found something they missed they will surely will find the same market inefficiency with haste.  they should have found it long before now once they exploit it his strategy the game is over.  there are many sharks out there and somehow he has managed to evade them for an improbable amount of time.   risk adjusted performance is way out there in the tail.  beyond six standard deviations. 

abnormal and extraordinary performance like this tell us that something is rotten in Denmark.  explanations like market manipulation, fraud, insider trading, and exchange collusion are no longer implausible.  they are the only theories that make sense.  Occam's Razor. 

All these attacks you talk about would require that Pirate has inside information from MtGox/Bitcoinica or some other source. Do you have anything to show that this is the case?

[nofuture]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

agree with you.   more people using them creates more demand which increases price. 

you can technical and apply MV=PQ

http://en.wikipedia.org/wiki/Quantity_theory_of_money

the end result is the same. the price of bitcoin should be increasing.  That's a good thing for the community and from those holding it as a store of value.   

All of us, this entire community, are losing from this.

[rjk]

stuff

Have you finished playing Wikipedia Accountant/Lawyer?

[Gabi]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

Stability is good if the price rise is extremely gradual. Bitcoin's deflation mechanism takes literally a century to play itself out.

A century if the user base does not increase

But since user base is very small, it can quickly increase bringing great price rise

[notme]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

agree with you.   more people using them creates more demand which increases price. 

you can technical and apply MV=PQ

http://en.wikipedia.org/wiki/Quantity_theory_of_money

the end result is the same. the price of bitcoin should be increasing.  That's a good thing for the community and from those holding it as a store of value.   

All of us, this entire community, are losing from this.

By your formula, the price only has to increase if velocity (V) remains constant... Take a look at this: http://blockchain.info/charts/n-transactions

[nofuture]

actually he's probably not running a ponzi.   what he is likely doing is very profitable. in this scam traders get burned.  his clients, his investors profit from that.  they do not get burned.  clients could get hurt if he is levered up ("scale up") with money he has borrowed from when his strategy eventually fails.  leverage works both ways.  risk/reward multiplier.   

the definition of ponzi has broadened but generally most say it is the type of scam that requires more new suckers coming in to pay off the old suckers.  it blows up when there aren't enough new suckers.  sometimes people misapply the word ponzi to any type of business fraud that happens to fail.  there's more ways to steal from people than simply running a ponzi scam.

his scam is more like penny shaving or salami slicing.

http://en.wikipedia.org/wiki/Salami_slicing

nothing new under the sun.  as old as time. 

the type of scam we see before us now ends when whatever market advantage he is exploiting disappears.  he has said that he has an advantage simply because he is a good trader.  the thing is there are a lot of smart talented traders how there.   even he found something they missed they will surely will find the same market inefficiency with haste.  they should have found it long before now once they exploit it his strategy the game is over.  there are many sharks out there and somehow he has managed to evade them for an improbable amount of time.   risk adjusted performance is way out there in the tail.  beyond six standard deviations. 

abnormal and extraordinary performance like this tell us that something is rotten in Denmark.  explanations like market manipulation, fraud, insider trading, and exchange collusion are no longer implausible.  they are the only theories that make sense.  Occam's Razor. 

All these attacks you talk about would require that Pirate has inside information from MtGox/Bitcoinica or some other source. Do you have anything to show that this is the case?

Lack of transparency is a big part of the problem.  Without transparency people can get away with scams for a long time  We need full and accurate reporting from the exchange where this trading is occurring.  We don't have that.  

Exchanges we have in the United States such as NASDAQ and the NYSE are public institutions that are regulated by the Securities and Exchange Commission.  We can read public statements that they are required to file.  We can request irregular activity be investigated.

The exchanges themselves are accountable to the public

http://ir.nasdaq.com/history.cfm
http://ir.nasdaqomx.com/ourFinancial.cfm

A timely example is the recent IPO of Facebook which has raised serious concerns of "securities fraud."  FINRA and the SEC are investigating allegations that Morgan Stanley gave preferential treatment to insiders over the public.  In the Facebook case they had enough circumstantial evidence to launch a full investigation.   The SEC is on that case now.  The SEC has strong and extensive powers to investigate securities fraud.  They can enforce severe civil and criminal penalties.  In addition to that numerous lawsuits have been filed.

http://www.latimes.com/business/la-fi-0523-facebook-regrets-2-20120523,0,2596022.story


In this situation we  have more than enough evidence documented on forum threads by Pirate himself and others  to meet the "probable cause" standard sufficient to trigger a thorough investigation.  There are also the documents he provided to his investors.   If you study this case and study the Facebook case there is actually more irregular activity to cause concern in this case than the Facebook case.  

What we need now is accurate and full reporting from the exchange that controls ~ 80% of the market.  Mt. Gox has not provided that information thus far.   Mt. Gox is not a transparent exchange like the NASDAQ and the NYSE.  They are secretive and opaque.  Their reputation is still sullied from the June 2011 hacking incident.  They are not known for openness and candor.

We should lobby the SESC (Securities Exchange Surveillance Commission) to get involved.  The SESC is located in Japan and regulates Mt. Gox.  The SESC is similar to the Securities and Exchange Commision (SEC) in the USA.   The SESC can begin an investigation now into market manipulation with the information we have now.  The SESC could can enforce full transparency upon Mt. Gox through more regulation.  Contact the SESC at the link below.

http://www.fsa.go.jp/sesc/english/index.htm

[imsaguy]

Won't it go on forever if the amount of humans (or other future full members of our society) keeps growing?

No.  Bitcoins are only divisible to 8 decimals.  At some point, you can no longer split them without changing the rules of bitcoin.

[wachtwoord]

I see that as a sure shot, like that will definitely happen if the value rises enough to warrant it. I would take the bet but I'm afraid I won't live long enough

[nofuture]

Stability is NOT good

Since there is a limited number of bitcoins, if more people start using and buying them the price must rise.

If the price stay the same then it means that btc adoption is a bit slow. Wich is not a problem now, after all we still lack infrastructure, easier clients etcetc. But in the future if there will be more ppl using btc then the price must rise.

agree with you.   more people using them creates more demand which increases price. 

you can technical and apply MV=PQ

http://en.wikipedia.org/wiki/Quantity_theory_of_money

the end result is the same. the price of bitcoin should be increasing.  That's a good thing for the community and from those holding it as a store of value.   

All of us, this entire community, are losing from this.

By your formula, the price only has to increase if velocity (V) remains constant... Take a look at this: http://blockchain.info/charts/n-transactions

Yeah, a saw that when bitcoinmedia ran a story on that not too long ago.  If you look at the graph it started to take off in May 2012.  But this invariable trading pattern has been going for much longer, when transaction history was stable.  The price hasn't changed from then to now.

So the problem here is how do you measure velocity?  You and I could set up bitcoin clients to trade back and forth very rapidly all the time.  The increased network transaction rate we produced wouldn't signify an increase in velocity because it doesn't represent increased economic activity.   Somebody could be spamming transactions just like people are e-mails.

Definitions of velocity can vary between different schools of thought.  I'm glad you brought this up.  We need to have a reliable measure of V.   I think the transaction chart from the block chain is the place to start but we need someway to filter out significant transactions from spam transactions and other transactions that are just noise.   Sounds like a potential block chain project.

[notme]

Yeah, a saw that when bitcoinmedia ran a story on that not too long ago.  If you look at the graph it started to take off in May 2012.  But this invariable trading pattern has been going for much longer, when transaction history was stable.  The price hasn't changed from then to now.

So the problem here is how do you measure velocity?  You and I could set up bitcoin clients to trade back and forth very rapidly all the time.  The increased network transaction rate we produced wouldn't signify an increase in velocity because it doesn't represent increased economic activity.   Somebody could be spamming transactions just like people are e-mails.

Definitions of velocity can vary between different schools of thought.  I'm glad you brought this up.  We need to have a reliable measure of V.   I think the transaction chart from the block chain is the place to start but we need someway to filter out significant transactions from spam transactions and other transactions that are just noise.   Sounds like a potential block chain project.

I believe V can't be accurately measured.  Bitcoin days destroyed is the best metric I've seen for tracking how long funds sit idle, but it's still not really V.  As for spamming, it's much more expensive to spam transactions than emails.  Unless your funds have sat for a few days, you'll need to pay a transaction fee to get it processed.  Also, like I mentioned in the $5 thread, it's only holding steady against the USD.  Measured against most other currencies, Bitcoin is trending up.

[bulanula]

I've said it all along and I will say it now.

I think all the people envying pirate are haters / jealous of his success.

Thanks for the clarification, pirate !

[LightRider]

Mods, please move this post if its in the wrong section.  Thanks

Howdy Y'all

So there seems to be an ever-growing list of topics and links regarding information about what exactly I do to pay my lenders.  Most of the information seems to be fabricated by people wearing pointy foil hats.  On the other hand there are a few respected members of the community that seem to have fallen into the FUD world which has become... this forum.  As you can imagine, knowing what I know about what I do, it's been pretty entertaining to watch.  I must admit, I do enjoy the thrill of getting a reaction from some of these nuts, but there does come a time when you have to stop throwing fuel on the fire.

What do I do?  Lots, and you couldn't pay me enough to tell how I do it.  Why?  Cause, as most of you know I've made a lot of money doing this and I'm simply not going to kill a good thing for now.  Currently I don't have to fund any portion of BTCS&T due to my extensive list of lenders and like any professional would tell you... Don't tie up your cash unless you have to.  So if there was enough time-consuming BS going around that drove me to either disclose what I do exactly (and thus kill my profit margins) or fund the operation myself and increase my profit margin, you can imagine which one I'd choose.

At this time, I don't need to make that decision.  I know what I do and have every right to what I disclose about my process.  So, now lets get to the good stuff.

Q - Are you running a drug ring and laundering money for Silk Road?
A - Are you kidding me? I live in the US.  If anything I was doing was illegal, my CPA, attorneys, and scariest... my wife would have my head.  So to make it clear, nothing I'm associated with is illegal.

Q - Are you the mystery Bitcoinica investor?
A - No, although I thought about it early on when I was looking into the different sectors, but coming from forex trading there would be so much I would change that it would be much easier to build it from scratch.

Q - Did you hack Bitcoinica or help to launder the coins?
A - No, as some of you know I have an extensive list of certifications but all of them are networking and datacenter related.  I have business partners that handle all of the coding work and a few friends that fill in the gaps when needed.  Honestly I wouldn't know if stolen coins are being moved in and out of BTCS&T or GPUMAX. We don't have systems in place to check for them nor would I add them, due to the simple fact that I'm not here to police the market, nor do I condone the practice. If someone steals your cash out of your wallet and you have the serial numbers, do you think anyone would care?

Q - Is BTCS&T a Ponzi?
A - Although, theoretically I could have run a Ponzi scheme for a while early on, it just wasn't something I would ever want to be a part of.  If I wanted it to be one, it would have been at much lower rates and I'd be asking for everyone to join.

Q - What's up with the check warrant?
A - Those of you that have contacted me about this knew really early on about it.  The check is for a tiny amount at a Lowe's hardware store in a city I lived in for two years back in 2002-2003.  The check is for some company I have never heard of and haven't been able to find any information about.  My drivers license number was written on the top of the check so it was associated with me.  I didn't hear about this till years later when I was Googling myself and called to find out what it was and attempt to get it fixed.  I just wanted to pay it to clear my record but they required me to confirm some information on the check which I couldn't do and would have to file a police report as well as setup a court date to deal with it.  It just wasn't worth my time and could really care less about it.  If I'm ever out in the desert again and get pulled over, maybe then they'll let me pay it.

I hope this information helps, but I know its not what some of you wanted.  In the end, the only people I care about are my lenders and even then, they don't have to invest with me if they're worried about what I'm doing.

A big thanks to all of my lenders and those that support my projects.  I do sleep sometimes and can't always see everything that is said about me on the forums but I can tell you that it's a breath of fresh air to wake up and see how many of you have my back when I'm not around.  It doesn't go unnoticed and want you to know I'm here and plan to be for a while.

Now, on with the show.

EDIT: There are a couple of people that I know doing the exact same thing I do.  One in the states and one in the UK.  Early on they both contacted me within days of each other asking for some tips on how I handled the process.  Now this was after a very detailed description of what they thought I was doing.  Considering they're not in my area and we'd end up helping each other out, I decided I'd lend a hand in getting them off the ground.  We've keep in contact and to-date (based on how many of you have no idea what's going on) they've kept the information I've told them secret and I can't tell you what that means to me.

Now, I never expect anything in return and this is not a call for them to come forward in the least (they know that).  I simply wanted to mention it and say thanks.

TL;DArrrgh