Why I used to trust Patrick Harnett

[JoelKatz]

How much of your net worth would you feel comfortable keeping in bitcoin? What you are suggesting could be devastating if for whatever reason bitcoin crashed and a person had most or all of their profits invested in their bitcoin business. But if you borrow and all your debits are in bitcoin you don't care the exchange rate. It's a way to short.

So you're saying that someone with the investment genius to consistently land low-risk, ultra-high-interest Bitcoin loans would also pay an APR over 100% just to short Bitcoins?! Seriously?!

[556j]

 

How much of your net worth would you feel comfortable keeping in bitcoin? What you are suggesting could be devastating if for whatever reason bitcoin crashed and a person had most or all of their profits invested in their bitcoin business. But if you borrow and all your debits are in bitcoin you don't care the exchange rate. It's a way to short.

So you're saying that someone with the investment genius to consistently land low-risk, ultra-high-interest Bitcoin loans would also pay an APR over 100% just to short Bitcoins?! Seriously?!

There's not any that pay out 100%+ APR that I would say are trustworthy, so no. I'm not saying that.


edit:

but this guy seemed to have pulled it off for a short period of time

https://bitcointalk.org/index.php?topic=87780.0

[JoelKatz]

Several of us have actually done this in reality (well not the risk-free part, we do take on a lot of risk).  This needs to be repeated over and over until you realize that it is actually happening.

Some of us have become very good at picking who to lend to and who not to lend to.  Just because you think it is too risky for you and that you would never try to do it does not mean you have to try to make everyone else stop doing it.

I have no objection to you doing it with your own money. And every explanation I've heard for why other people's money is needed fails the giggle test.

[556j]

I have no objection to you doing it with your own money. And every explanation I've heard for why other people's money is needed fails the giggle test.

One was pointed out to you and you just write it off as "publicity stunt". TBH I think that's more laughable (paying high interest for publicity) than to short or hedge risk against volatile bitcoin exchange rate.

[JoelKatz]

One was pointed out to you and you just write it off as "publicity stunt".

Yes, it was quite clear in that case that they didn't actually need investment money. They were basically just taking it to see if it worked. And the high interest rate loans were cut off very quickly.

TBH I think that's more laughable (paying high interest for publicity) than to short or hedge risk against volatile bitcoin exchange rate.

The amount of money involved was very small. There's nothing wrong with shorting or hedging against volatile exchange rates. What's idiotic is paying 100% APR to do it with zero leverage.

[556j]

What's idiotic is paying 100% APR to do it with zero leverage.

Why do we keep using that number in a thread about a guy offering 67.65% APR? That interest rate is still ridiculous so there's no need to overstate it. I think it's pretty easy to generate plenty of funds to cover this rate. Considering bitcoin fell ~30% in the last few weeks I also don't think it's unreasonable to offer a little over twice that per year for protection. The thing I totally agree with you about is the "guarantee" It's more likely the issuer thinks it's low risk and willing to risk reputation on that fact. As the holdings get higher, reputation means less and less.

[SaltySpitoon]

I know Patrick is legitimate, because one time, there was this little yellow dude that owed him money, so he decided to "Reclaim" his funds with his Kickboxing talents. Sadly, the little yellow guy was psychic, and destroyed Patrick. But I made sure I placed a strategic ice cube, so when that little yellow guy came a knockin, he "fell down on the job"

Long story short, Patrick got his money back, and paid his investors. While he "spruced up my paint" in gratitude.

+1

[JoelKatz]

Why do we keep using that number in a thread about a guy offering 67.65% APR? That interest rate is still ridiculous so there's no need to overstate it.

Yeah. 1%/week is around 67% APR. 1.5%/week is around 117% APR.

I think it's pretty easy to generate plenty of funds to cover this rate. Considering bitcoin fell ~30% in the last few weeks I also don't think it's unreasonable to offer a little over twice that per year for protection. The thing I totally agree with you about is the "guarantee" It's more likely the issuer thinks it's low risk and willing to risk reputation on that fact. As the holdings get higher, reputation means less and less.

The main problem is that investors have no way to assess risk. Funds compete based on the reward, which creates a huge incentive to increase risk.

Fundamentally, it's this simple: If the fund operator is not making decent money, there's no good explanation for why they'd go to all this trouble and risk other than that it's a scam. If the fund operator is making decent money and not exposing their investors to extreme risk, the first thing they'd do with the money they're making, if they're not an idiot, is pay down all their ultra-high-interest debt.

[556j]

If the fund operator is making decent money and not exposing their investors to extreme risk, the first thing they'd do with the money they're making, if they're not an idiot, is pay down all their ultra-high-interest debt.

What if the extreme risk is bitcoin itself, but the debit is denominated in bitcoin?

[JoelKatz]

What if the extreme risk is bitcoin itself, but the debit is denominated in bitcoin?

There is risk in the volatility of bitcoin's value and the possibility that bitcoins will become all but worthless overnight and never recover. We can disagree over just how much risk there is, but there's no question it's there. This puts a bit of a drag on everything we do with bitcoins. Fortunately, there's so much friction in the traditional financial system that this doesn't actually hurt bitcoins very much. But we do need better ways to hedge these risks. There are definitely ways today that don't require paying huge fees to get no leverage. But they could be a lot better and that would help a lot.

Denominating debts in bitcoin makes the debtor short bitcoins and the borrower long bitcoins. Debts could be a sensible way to speculate on bitcoins if the market wasn't so messed up by fraud. Ironically, it would probably actually help bitcoins if the borrowing market were heavily regulated. (Of course, it's unimaginable that you could get beneficial regulation in the borrowing market without also having horribly harmful regulation in every other aspect. So I'm not suggesting that's a workable solution.)

[Micon]

Several of us have actually done this in reality (well not the risk-free part, we do take on a lot of risk).  This needs to be repeated over and over until you realize that it is actually happening.

Some of us have become very good at picking who to lend to and who not to lend to.  Just because you think it is too risky for you and that you would never try to do it does not mean you have to try to make everyone else stop doing it.

I have no objection to you doing it with your own money. And every explanation I've heard for why other people's money is needed fails the giggle test.

+1 / well said. 

It's the constant need for new money after claims of making large profits.  Tell tale sign of scam.

[WifeOfStarfish]

It is impossible to get risk-free 1.5% weekly interest, I don't care how good you are at "playing the market" or "choosing who to lend to."

This needs to be repeated over and over until people start to get it.

Several of us have actually done this in reality (well not the risk-free part, we do take on a lot of risk).  This needs to be repeated over and over until you realize that it is actually happening.

Some of us have become very good at picking who to lend to and who not to lend to.  Just because you think it is too risky for you and that you would never try to do it does not mean you have to try to make everyone else stop doing it.

Stop picking on Burt, who is smarter (and I bet richer - legitimately/via legal means) than any of his detractors in this thread. Everything he has said is true. Burt is a top bloke! Stop picking on my starfish too. There are actually honest people in business you know. You trolls should find a helpful outlet for your misguided energies. Charitable work perhaps?

[WifeOfStarfish]

Several of us have actually done this in reality (well not the risk-free part, we do take on a lot of risk).  This needs to be repeated over and over until you realize that it is actually happening.

Some of us have become very good at picking who to lend to and who not to lend to.  Just because you think it is too risky for you and that you would never try to do it does not mean you have to try to make everyone else stop doing it.

I have no objection to you doing it with your own money. And every explanation I've heard for why other people's money is needed fails the giggle test.

+1 / well said. 

It's the constant need for new money after claims of making large profits.  Tell tale sign of scam.

Tell tale sign of passive-aggressive loser/bully Micon...

[repentance]

If there's one way to unravel any semblance of professionalism you've built up for your business over many months, it's to have your spouse suddenly appear and start engaging in personal slanging matches with your detractors.

[Scott J]

If there's one way to unravel any semblance of professionalism you've built up for your business over many months, it's to have your spouse suddenly appear and start engaging in personal slanging matches with your detractors.

Patrick is an honest guy providing a valuable service.  The fact that his wife wants to defend him is understandable.

[PatrickHarnett]

If there's one way to unravel any semblance of professionalism you've built up for your business over many months, it's to have your spouse suddenly appear and start engaging in personal slanging matches with your detractors.

She's entitled to her opinions.

[evolve]

Three words : the long con.


Mark my words.

[rdponticelli]

Three words : the long con.


Mark my words.

Marked 

[Grinder]

Tell tale sign of passive-aggressive loser/bully Micon...

You should stop now. Your desperate attempts at name calling just makes you look sad and certainly doesn't help the person you claim to be the wife of.

[Cobra]

You should stop now. Your desperate attempts at name calling just makes you look sad and certainly doesn't help the person you claim to be the wife of.

This thread seems a little off track. I am surprised to see people with many posts and elevated forum status make comments like this. I've been around since January and don't say much because of the many people around here that have this type of attitude. Really......would there be someone out there that would claim to be the "wifeofstarfish" and said person not be the real wife......I doubt it. If I was in the shoes of Starfish I would also wan't to invite my wife to the forums to see the kinds of things he may be dealing with and responding to, like this for example.

I have done business with Starfish on multiple occasions and feel he is a man of integrity and a pleasure to do business with. Look back at the many pages here from people who feel the same way. I doubt anyone has had a negative experience. Just because something negative happens to another service provider that had a great track record doesn't mean that the same thing will happen to others with an un-blemished record.

And lastly....welcome to the forum WifeofStarfish, I'm sure you see how it is around here already.