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Author Topic: The Bond party is a HYIP scam party  (Read 4099 times)
Vandroiy
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June 22, 2012, 12:33:55 AM
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We are not supposed to say evil things in threads concerning "Bitcoin Savings and Trust" or their various clones and offspring, thus it gets an extra thread. Actually, it's not just that one that worries me, but it is the most prominent example.

I'm looking to pull one bigger than mybitcoin.com.  If figure, go big or go back to work. Smiley

By any indicators I have, this plan is succeeding. GLBSE looks like a sandbox for funny bond papers, as does the securities section of this forum. Touching the subject anywhere only gives erratic responses of either ignorance of the issue, a shrugging "of course it's a ponzi, who cares," or outright ridiculous "explanations" why this looks perfectly fine.

Hello? A HYIP madness is spreading rapidly and people act as if this were normal! What in hell has gotten into everyone? Is this round two of people believing Bitcoin is a path to free money?

Also, does anyone have credible figures about the magnitude of "deposits" in the various nonexistent/vaporous bonds and companies? If this is large enough to cripple Bitcoin's current recovery when it finally shuts down... let's just say I would be disappointed.
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rjk
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June 22, 2012, 01:07:50 AM
 #2

Your sarcasm detector is severely malfunctioning, sir.

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June 22, 2012, 02:24:56 AM
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Also, does anyone have credible figures about the magnitude of "deposits" in the various nonexistent/vaporous bonds and companies?

Here are a couple valuation tables:

 - https://bitcointalk.org/index.php?topic=84399.msg974903#msg974903
 - http://www.thebitcointrader.com/2012/05/glbse-valuations-13-may-2011.html

Overall, this shows a relatively pretty small amount.  Eyeballing it I see maybe a quarter million USD.  Maybe at peak for all issues (not just the top 20) the total was twice that (wild assed guess).

If this is large enough to cripple Bitcoin's current recovery when it finally shuts down... let's just say I would be disappointed.

Funds held by Bitcoinica totaled far larger amounts (perhaps by an order of magnitude larger) and Bitcoin didn't skip a beat.

Additionally, if some (or most) of these were to collapse, the bitcoins would presumably already have been spent, thus there's no selloff of bitcoins that would result.

The event you fear would, however, give pause to it occurring a second time (at least not right away ... memories are sticky, but the pain fades and it happens again eventually).

What I'm surprised by is why there aren't a wider variety of asset issues.  Of course I had expected word to get out that you could create a "fund" that would "invest" in "[put some commodity or other asset here]" and raise "capital" on GLBSE -- all for about $50 (not including the cost for the fake ID).

But what I thought we'ld see (and hoped we'ld see) by now were things like what you'ld see at an angel pitch fest maybe and trying to raise their seed money here (and yes, using their real names, addresses, portfolio history, business plan, a paying customer or two, etc.).

It is like the elephant kept under control having a leg chained to only a tiny stick.  Equity crowdfunding is here, waiting to be put to good use!  [Crickets ... ]

What GLBSE needs are some successes with meatspace ventures building and shipping in a way that proves how these markets can work just fine for those trying to raise capital in an honest, transparent fashion.

Incidentally, another thread on this "what if Pirate defaults" topic:
 - http://bitcointalk.org/index.php?topic=86853.0

Vandroiy
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June 22, 2012, 11:07:15 AM
 #4

Funds held by Bitcoinica totaled far larger amounts (perhaps by an order of magnitude larger) and Bitcoin didn't skip a beat.

Additionally, if some (or most) of these were to collapse, the bitcoins would presumably already have been spent, thus there's no selloff of bitcoins that would result.

Well... I expect that pretty much all of the vaporware bonds will not default, but actually run with the coins. This is somewhat different from Bitcoinica, which is chaotic, but seems to actually attempt a legitimate business and return customers' funds. Also, HYIP scams usually keep fairly large online wallets to keep looking solvent until fund accretion at the very end.

Most importantly, this sort of scheme requires growth of deposits above the paid interest rate. "Bitcoin Savings and Trust" appears to still keep pace! So if this might just arguably be becoming a problem now, it will be one with certainty in a matter of weeks. And there's no telling actual user base growth will be "just" 7% weekly the moment its size becomes critical.



I sometimes get the impression I didn't make myself clear. The "savings trust" is a Ponzi scheme. I'm not talking about "oh, but maybe the poor fella will default" or something on that level. Everything from the cheap building of trust, the friendly update messages and the time-scale of the thing is nothing but textbook fraudster routine. The funds are hardly flowing enough for good money laundering, there are cheaper means to do that anyway, and even if it were to work there's simply no reason to still pay out this sort of interest to lenders. Ever heard of "There Ain't No Such Thing As A Free Lunch"?

It's complete and utter bullshit, and if there were any viable financial instrument to bet on its collapse, I'd be using it. I'd offer bets, but the "trust" yield is supposedly so insane that anyone betting against me would rather throw the money directly into the infinite money production machine.
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June 22, 2012, 01:28:12 PM
 #5

[...]

It's complete and utter bullshit, and if there were any viable financial instrument to bet on its collapse, I'd be using it. I'd offer bets, but the "trust" yield is supposedly so insane that anyone betting against me would rather throw the money directly into the infinite money production machine.

you can bet on it here: http://betsofbitco.in/search?q=savings

the only problem is that pirate knows of these and if in doubt will default one day later. so maybe the fifth of july is the expiration date.

otherwise I am with you here.


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June 24, 2012, 07:14:54 PM
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What is your opinion on some of the other funds (such as Starfish BCB), which appear legitimate, yet still pay bookoos more than any other IRL fund?
Vandroiy
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June 24, 2012, 09:51:55 PM
 #7

What is your opinion on some of the other funds (such as Starfish BCB), which appear legitimate, yet still pay bookoos more than any other IRL fund?

I couldn't tell about specific ones without looking deeper into them. I'm just saying what my general impression at the current situation is: there are a lot of funds, bonds, trusts with a lot of growth, which have all emerged strangely fast and seem to have a shady background when you look beyond a few months.

I'm not saying it's bad to push new stuff. But don't just trust people who claim to have a great offer. If the money put into a fund is worth much more than the effort required to set up its visible front including history and "identities", scam becomes profitable.

Generally, always do three sanity checks: how and why does it work, what is the expectation value on profit, how much can I invest while keeping a reasonable risk management? Opportunities where all three questions have a favorable answer are scarce. If that does not seem to be the case, I'd recommend to assume a hidden risk somewhere and double-check before going in too deep.
bitlane
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June 25, 2012, 02:39:26 AM
 #8

I am scared as well.

I dread having to see yet another doubling of my Bitcoin Savings & Trust Investment due to this shady interest.

I am honestly not sure how much more free equipment and free Bitcoins I can handle at this point. Please help me.

Vandroiy
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June 26, 2012, 12:25:40 PM
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@bitlane: I can't really tell whether you are being sarcastic or not... but I guess my sarcasm detection issues have already been noted above. Huh

That said, I think the scheme is now on the order of its growth cap, and should phase out in a matter of weeks unless it gets another growth spurt. Any guesses on its shutdown procedure? IMO, the delays without prior notice might be ia try to increase the time-span until people panic. It seems unlikely that Pirateat unexpectedly remains in a place without internet connectivity twice. There could be some sort of final accretion phase that benefits from a little extra time.

The psychology of this is strange beyond imagination. In historic Ponzi schemes, sometimes the schemes' followers sided with the people orchestrating it even after its nature had become overly clear.
finkleshnorts
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July 03, 2012, 03:07:27 AM
 #10

Thank you, Vandroiy, for your well thought-out opinions.

I would sincerely like to read from others who think BTCST is a ponzi. I think/hope there is very little chance of being flamed here (the main BTCST thread meanwhile is a tank of piranhas). Please no flamers. I have said many things I regret in discussions on these forums. But I will not argue here at all.

Please pm me if you would rather not say in public.

Edit: disclosure: I have been blinded by greed. All funds permanently withdrawn from my PPT. I have made a complete fool of myself changing my mind so many times, to such extremes. I read the EVE Ponzi link provided by Vandroiy on the BTCST main thread, and i finally woke the fuck up.
theymos
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July 03, 2012, 05:44:27 AM
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The "savings trust" is a Ponzi scheme. I'm not talking about "oh, but maybe the poor fella will default" or something on that level. Everything from the cheap building of trust, the friendly update messages and the time-scale of the thing is nothing but textbook fraudster routine. The funds are hardly flowing enough for good money laundering, there are cheaper means to do that anyway, and even if it were to work there's simply no reason to still pay out this sort of interest to lenders. Ever heard of "There Ain't No Such Thing As A Free Lunch"?

I completely agree. I'm not at all worried about BTCST's failure hurting the community, though. A lot of shady assets will fail and a few individuals will lose a lot of money, but I don't think there will be any long-term damage.

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Stephen Gornick
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July 03, 2012, 07:36:18 AM
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The psychology of this is strange beyond imagination.

Another post from Vandroiy's:

First-Hand telling of an online Ponzi: Eve Online's Currin Trading

 - http://bitcointalk.org/index.php?topic=91214.0

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July 03, 2012, 11:11:32 PM
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So, lots of drama in the main BTCST thread over the last 24 hours. Now the thread is locked. Thoughts?
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July 04, 2012, 03:34:37 AM
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So, lots of drama in the main BTCST thread over the last 24 hours. Now the thread is locked. Thoughts?

The beginning of the end!
phelix
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July 04, 2012, 05:19:26 AM
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i wonder if there are people knowing pirate's identity that have been on the forum longer tha n he has. in other words, that we can be sure they are not his puppets.

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July 04, 2012, 05:21:58 AM
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So, lots of drama in the main BTCST thread over the last 24 hours. Now the thread is locked. Thoughts?

The beginning of the end!

While I do not personally believe it to be a ponzi (I think it's a technically legal fiat currency movement service (money laundering) service), I think the main thread should have stayed open. What's the difference between 72 pages and 172 pages? It's always been high volume, and there is a second thread for announcements now.
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July 04, 2012, 05:25:28 AM
 #17

So, lots of drama in the main BTCST thread over the last 24 hours. Now the thread is locked. Thoughts?

Im reducing my exposure as i intend to sit on the sidelines.

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July 04, 2012, 05:27:00 AM
 #18

I've removed all my funds from pirate.

Reinvesting it all in popcorn.
finkleshnorts
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July 04, 2012, 05:32:01 AM
 #19

I can think of four explanations.

Pirate closed the thread because:

1: it is a Ponzi: Vandroiy, hazek, et al were getting too close to home.

2: it is or isnt a Ponzi: Pirate wanted to put an end to imsaguy's email notifications

3: it isn't a Ponzi: Pirate was tired of insults.

4: It is or isn't a Ponzi: pirates angrier investors privately requested him to lock the thread

I can't help but think its 1.
Vandroiy
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July 04, 2012, 01:59:48 PM
 #20

Changed the thread name because it's so obvious by now, there is really no need to use kinky wording.

GLBSE should read "Global Bitcoin Scammer Exchange" really. Edit: this is NOT directed at GLBSE operators! Sorry for the misunderstanding!
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