After just having read this
I propose a couple of 'bond' type securities to allow people to express their opinion one way or the other.
Start two securities (I can't see any other public way to do this, since betsofbitcoin doesn't seem to have gotten much traction). One will be a Pirate pass-through, the other will be a pass through to a more low risk investment. I know something similar has been attempted before, but perhaps it's time to try again.Pro Pirate Bond:
Coins invested in the Pro Pirate Bond are invested with Pirate, at whatever the current rate is. Any interest obtained will be moved to an escrow service.Pirate Default Bond:
Coins invested in the Pirate Default Bond do not increase in value.
Investment coins from the Pirate Default Bond and interest payments for the Pro Pirate Bond obtained will remain in the GLBSE accounts or be moved to an escrow service if trust in GLBSE is not sufficiently high.
In both cases, one coupon will be paid on the expiry of the bond. The bond will expire in one year, or when Pirate defaults, or when Pirate ends his business without defaulting.If Pirate defaults:
the 50% of the BS&T interest payments will go to each bond.
50% of the BS&T interest payments or the average interest rate at the PPT, whichever is lower, will go to the Pirate default bond. The remaining amount will go to the pro Pirate bond.If Pirate does not default within one year:
interest payments pay the Pro Pirate coupon, and the Pirate Default bond simply receives their initial investment back.
If you're pro Pirate, then you'll either have a interest plus your principal, or just half the interest and no principal.
If you assume Pirate will default within a year, you'll either have your principal back and no interest, or your principal back and and half the interest.
Example: 100 coins of the Pirate default bond are bought and 110 coins of the pro Pirate bond, and the average interest paid is 6%:
If Pirate does not default, interest accumulated = 110*0.06 *52 = 343.2, since it's not being re invested.
Pirate default bond pays 100 coins to its investors.
Pro Pirate bond pays 110 + 343.2 = 453.2 coins to its investors
If Pirate defaults in 6 months, interest accumulated = 110*0.06 *26 = 171.6.
Pirate default bond pays 100 coins + half the Pro Pirate bond interest = 85.8 coins (since this is less than 100*0.06 *26).
Pro Pirate bond pays the remaining 85.8 coins to it's investors.
In this way there's risk and reward on both sides. But is it fair?
Opinions please people?