A Theory on what pirateat40 is doing

[Raoul Duke]

Because they don't need to be millionaires.
You'll find that an early adopter having 100k BTC to spare and start doing the same he's doing isn't that farfetched.

Staff should have a neutral position on the subject. This board sends the wrong message at times.

What Staff? I'm me. I'm not the forum.
Also, it won't be a child like you to tell me what my position should be in any subject.

This has been nagging me...

Why wouldn't he tell us what he does? How many of us know millionaires willing to invest in bitcoin, especially those who pay in cash? It's not like somebody can just snatch that market right up.

Because they don't need to be millionaires.
You'll find that an early adopter having 100k BTC to spare and start doing the same he's doing isn't that farfetched.

I don't understand what you are saying here, forgive me

You don't understand that there are early adopters/miners who have more than 100k BTC they could spare and do the same as Pirate?

[R-]

Also, it won't be a child like you to
Children could take you seriously Psy if you could type properly without the help of google translate.

[finkleshnorts]

Because they don't need to be millionaires.
You'll find that an early adopter having 100k BTC to spare and start doing the same he's doing isn't that farfetched.

Staff should have a neutral position on the subject. This board sends the wrong message at times.

What Staff? I'm me. I'm not the forum.
Also, it won't be a child like you to tell me what my position should be in any subject.

This has been nagging me...

Why wouldn't he tell us what he does? How many of us know millionaires willing to invest in bitcoin, especially those who pay in cash? It's not like somebody can just snatch that market right up.

Because they don't need to be millionaires.
You'll find that an early adopter having 100k BTC to spare and start doing the same he's doing isn't that farfetched.

I don't understand what you are saying here, forgive me

You don't understand that there are early adopters/miners who have more than 100k BTC they could spare and do the same as Pirate?

That has nothing to do with what I originally said.

[Raoul Duke]

Also, it won't be a child like you to
Children could take you seriously Psy if you could type properly without the help of google translate.

Everybody would take you seriously if you weren't such a spoiled brat begging for attention.
I'm not your dad...

[R-]

Where the heck did this come from? "I'm not your dad..."

Also, thank the lord.

[R-]

Also, it won't be a child like you to
Children could take you seriously Psy if you could type properly without the help of google translate.

Everybody would take you seriously if you weren't such a spoiled brat begging for attention.
I'm not your dad...

Dear Daddy,

Please use the ignore button and stop feeding the trolls.  They give me scary dreams.

Love,

reeses

Hi reeses,
 I enjoy eating reeses peanut butter cups. Thank you for the love letter.

Love,
Satoshi

[kentrolla]

Here's my theory:  

Assuming pirate's operation is not a ponzi and he's not doing anything illegal, then he obviously wants the price of BTC to go down.

"I'd Gladly Pay You Tuesday for a Hamburger Today" - J. Wellington Wimpy

This famous quote is referring to the idea that people taking loans and paying interest are betting on the value of whatever they are borrowing to go down. In pirate's case he's betting on the value of BTC to go down.

Have you ever seen him say anything bullish? I see him talking about "risk management" saying that he is prepared for BTC to have no value in the future by using them in an analogy that refers to BTC as "pet rocks" here: https://bitcointalk.org/index.php?topic=82849.msg918162#msg918162

Even if pirate wasn't betting on the price going down initially, if he gets enough loans in BTC, (which he already has) he will have enough volume to corner the market and have enough influence on the price to MAKE it go down.

This really isn't a risky move for him because if somehow the price of BTC rises out of his control, (which i find unlikely because he clearly stopped the rally today) then his business model either turns into a ponzi (when the only income comes from new investors) and he can just take all the BTC and run. or if he decides to do this legally, he already has enough influence on the price of BTC that i think he can make enough fiat through market manipulation to pay back his investors still with a lot of profit for him.

His investors are basically lending him BTC to sell for fiat to drive the price down.

Assuming this is the case, if I were an investor I would withdrawal my coins before the price makes any movements up or down, because both scenarios are risky for you.

Don't get me wrong, there is still potential to earn money through investing in BS&T as long as you get out in time. But, i think its a bad bet and, in any case, i think it's a bad thing for Bitcoin to have people "Centralizing" where the Bitcoins are. This picture here: https://bitcointalk.org/index.php?topic=85687.msg1015662#msg1015662  clearly shows that the market is already backed up into a corner.

[Serge]

Pirate's selling at high premiums removes this supply (100-200k (?) BTC weekly) from the market at current rates, his clients won't be selling on the market at negative profit margin. Although it is in his best interest keeping or having price low, he's effectively extinguishes the available supply at any given rate, so at some point prices will have to move up due to limited supply availability especially if his own business demands increase. If his business is indeed legit and does what he claims it does - it has overall positive effect on the market as it steadily absorbs all low priced inventory.

[ErebusBat]

Pirate's selling at high premiums removes this supply (100-200k (?) BTC weekly) from the market at current rates, his clients won't be selling on the market at negative profit margin. Although it is in his best interest keeping or having price low, he's effectively extinguishes the available supply at any given rate, so at some point prices will have to move up due to limited supply availability especially if his own business demands increase. If his business is indeed legit and does what he claims it does - it has overall positive effect on the market as it steadily absorbs all low priced inventory.

Not to mention that once he is 'done' the price should skyrocket, making us all more money

[Vandroiy]

Uh... are we talking about 6-digit shorts here? While this is theoretically possible, it's insanely risky. BTC ask is illiquid. If nothing causes a price panic, the funds just get burned and that's that.

Sales to customers don't work either, at least not on this scale. 200k was Gox weekly volume the last two weeks. Nope, he cannot have bought back that much there, unless he is the only remaining buyer for the whole week.

[Francesco]

The funny part is that even if his activities were perfectly legit, it simply cannot work due to the nature of bitcoins.

Bitcoin offer is illiquid -not only this, it is limited by its very nature; and he states he converts his bitcoins to fiat. So he has to convert them back to pay his lenders -and the amount he would need to convert is by now enormous, and growing fast.
If he had to pay them all at once, the price would go over the roof quite quickly... so however big is the pile of USD he's sitting over, he would default on a bank run, as the fact itself that he repays pushes the prices up until it's impossible to repay.

Which rules out the possibility of an orderly shutdown... and so makes sure, since nothing can last forever, that when this all ends it will be with a default, at least partial. Even if he is really making the insane amount of profits (in USD) he is claiming he is!
Unless of course BTC price crashes really low... but ther's no sign this is ever gonna happen.

He cannot not be aware of this. So the fact that he seems certain of an orderly shutdown, which is objectively really unlikely, is another point in favour of the idea he's simply lying, and his activity is indeed a Ponzi.

[proudhon]

The funny part is that even if his activities were perfectly legit, it simply cannot work due to the nature of bitcoins.

Bitcoin offer is illiquid -not only this, it is limited by its very nature; and he states he converts his bitcoins to fiat. So he has to convert them back to pay his lenders -and the amount he would need to convert is by now enormous, and growing fast.
If he had to pay them all at once, the price would go over the roof quite quickly... so however big is the pile of USD he's sitting over, he would default on a bank run, as the fact itself that he repays pushes the prices up until it's impossible to repay.

Which rules out the possibility of an orderly shutdown... and so makes sure, since nothing can last forever, that when this all ends it will be with a default, at least partial. Even if he is really making the insane amount of profits (in USD) he is claiming he is!
Unless of course BTC price crashes really low... but ther's no sign this is ever gonna happen.

He cannot not be aware of this. So the fact that he seems certain of an orderly shutdown, which is objectively really unlikely, is another point in favour of the idea he's simply lying, and his activity is indeed a Ponzi.

[riX]

Tldrifyed: An individual of profession, in order of probable probability, live poker player, carpenter doing some business on the side on weekends, drug dealer or bank robber, has got too much physical cash, and wants to convert his pile into a more legal form, preferably in the bank account of his legitimate business or possibly offshore. He makes a transaction with Mr P, who in turn makes a note in his books about selling bitcoins OTC to an unnamed customer, since KYC requirements is not needed for transactions not involving currency conversion, and btc is not currency as we all know. That the three letter requirement is unneeded is of course in the grey zone, but that's why he's hired a lawyer, making sure not to break any rules, just bend them. As soon as the cash is in the bank, a wire is sent to the individual, aka. Mr A, with the aforementioned profession's tax-paying account, and pays with the very same bitcoins that he bought before, getting a nice sum of about 90% of the former deal. The remaining 10% of the cash goes to mtgox and is swiftly converted into btc. A's got fresh smelling money in the bank, for which he payed 10%, and can now buy cars ans houses. P's got 10% more BTC. The market's got some less BTC, equivalent to 10 and not 100% of the total operation, which is convenient, since it is then easy when holding ten times that to put up a few walls of another kind than those Mr A crafts on weekends to stabilize the rate and not risk too much during the few hours he's in fiat. With P's background as CEO of TLP, Mr O's tool slides right off the stubble.

[organofcorti]

Tldrifyed:
An individual of profession, in order of probable probability, live poker player, carpenter doing some business on the side on weekends, drug dealer or bank robber, has got too much physical cash, and wants to convert his pile into a more legal form, preferably in the bank account of his legitimate business or possibly offshore.

He makes a transaction with Mr P, who in turn makes a note in his books about selling bitcoins OTC to an unnamed customer, since KYC requirements is not needed for transactions not involving currency conversion, and btc is not currency as we all know. That the three letter requirement is unneded is of course in the grey zone, but thats why he's hired a lawyer, making sure not to break any rules, just bend them. As soon as the cash is in the bank, a wire is sent to the individual, aka.

Mr A, with the abovementioned profession's tax-paying account, and pays with the very same bitcoins that he bought before, getting a nice sum of about 90% of the former deal. The remaining 10% of the cash goes to mtgox and is swiftly converted into btc. A's got fresh smelling money in the bank, for which he payed 10%, and can now buy cars ans houses.

P's got 10% more BTC. The market's got some less BTC, equivalent to 10 and not 100% of the total operation, which is convenient, since it is then easy when holding ten times that to put up a few walls of another kind than those Mr A crafts on weekends to stabilise the rate and not risk too much during the few hours he's in fiat. With P's background as CEO of TLP, Mr O's tool slides right off the stubble.

Semi-FTFY. You can do the typos.

[hazek]

Tldrifyed: An individual of profession, in order of probable probability, live poker player, carpenter doing some business on the side on weekends, drug dealer or bank robber, has got too much physical cash, and wants to convert his pile into a more legal form, preferably in the bank account of his legitimate business or possibly offshore. He makes a transaction with Mr P, who in turn makes a note in his books about selling bitcoins OTC to an unnamed customer, since KYC requirements is not needed for transactions not involving currency conversion, and btc is not currency as we all know. That the three letter requirement is unneeded is of course in the grey zone, but that's why he's hired a lawyer, making sure not to break any rules, just bend them. As soon as the cash is in the bank, a wire is sent to the individual, aka. Mr A, with the aforementioned profession's tax-paying account, and pays with the very same bitcoins that he bought before, getting a nice sum of about 90% of the former deal. The remaining 10% of the cash goes to mtgox and is swiftly converted into btc. A's got fresh smelling money in the bank, for which he payed 10%, and can now buy cars ans houses. P's got 10% more BTC. The market's got some less BTC, equivalent to 10 and not 100% of the total operation, which is convenient, since it is then easy when holding ten times that to put up a few walls of another kind than those Mr A crafts on weekends to stabilize the rate and not risk too much during the few hours he's in fiat. With P's background as CEO of TLP, Mr O's tool slides right off the stubble.

This makes zero sense. From the outside this looks like Mr A sent some money to Mr P and then Mr P sent 90% of it back. Is this your idea of money laundering?

[Raoul Duke]

Tldrifyed: An individual of profession, in order of probable probability, live poker player, carpenter doing some business on the side on weekends, drug dealer or bank robber, has got too much physical cash, and wants to convert his pile into a more legal form, preferably in the bank account of his legitimate business or possibly offshore. He makes a transaction with Mr P, who in turn makes a note in his books about selling bitcoins OTC to an unnamed customer, since KYC requirements is not needed for transactions not involving currency conversion, and btc is not currency as we all know. That the three letter requirement is unneeded is of course in the grey zone, but that's why he's hired a lawyer, making sure not to break any rules, just bend them. As soon as the cash is in the bank, a wire is sent to the individual, aka. Mr A, with the aforementioned profession's tax-paying account, and pays with the very same bitcoins that he bought before, getting a nice sum of about 90% of the former deal. The remaining 10% of the cash goes to mtgox and is swiftly converted into btc. A's got fresh smelling money in the bank, for which he payed 10%, and can now buy cars ans houses. P's got 10% more BTC. The market's got some less BTC, equivalent to 10 and not 100% of the total operation, which is convenient, since it is then easy when holding ten times that to put up a few walls of another kind than those Mr A crafts on weekends to stabilize the rate and not risk too much during the few hours he's in fiat. With P's background as CEO of TLP, Mr O's tool slides right off the stubble.

This makes zero sense. From the outside this looks like Mr A sent some money to Mr P and then Mr P sent 90% of it back. Is this your idea of money laundering?

What part of PHYSICAL CASH didn't you understand, dumbfuck?

[riX]

This makes zero sense. From the outside this looks like Mr A sent some money to Mr P and then Mr P sent 90% of it back. Is this your idea of money laundering?

From the outside it looks like Mr A sold bitcoins to Mr P. If authorities ask, Mr A says he mined them. Borrowing a lot of btc enables you to create your own btc tumbler, efficient enough that a blockchain analysis never holds up in court. Early adopters might have some coin unused since they were mined, check out the blockchain for interesting stuff..

[hazek]

This makes zero sense. From the outside this looks like Mr A sent some money to Mr P and then Mr P sent 90% of it back. Is this your idea of money laundering?

From the outside it looks like Mr A sold bitcoins to Mr P. If authorities ask, Mr A says he mined them. Borrowing a lot of btc enables you to create your own btc tumbler, efficient enough that a blockchain analysis never holds up in court. Early adopters might have some coin unused since they were mined, check out the blockchain for interesting stuff..

And what is Mr P going to tell the authorities about where he got the 90% he used to "buy" the bitcoins from Mr A?

[riX]

That he sold bitcoins. Just claim they were mined two years ago.
Of course, everything depends on blockchain analysis not holding up in court.

[jwzguy]

For a 7 page thread there's remarkably little in the way of actual theorizing. Ponzi's hack at this point...no need to keep repeating it.

Maybe he's helping migrant workers move cash back home safely.