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Author Topic: Bryan Micon's List of BTC Ponzi Schemes that should not be listed as "Lending"  (Read 107984 times)
mp420
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August 14, 2012, 02:17:28 PM
 #741

Hey, you Pirate supporters, could you point me to ONE case in history where someone has paid consistently several thousand percent REAL interest rate for an unlimited number of debtors over extended time where the nature of the business was not disclosed to investors that didn't turn out to be a scam.

The extended time you speak of is right at a year and its in a brand new/emerging technology.  Look at any brand new, rapidly growing company and their rates will be off the charts and of course if you extrapolate those rates to infinite they look ridiculous. That's part of the point that the 'pirate supporters' are trying to make.. a high interest rate isn't a clear indicator all by itself.

Investing in stocks or shares is one thing. A startup company is telling you "give me money so our business may succeed and we'll all earn good money". You make the decision to invest or not invest based on your judgment whether the expected returns on the investment is positive in the light of the viability of the business model, the state of the market, etc.

Lending money to someone who promises to pay 3000% interest to everyone and doesn't disclose their business model is just stupid. If you've done that you're an idiot. Even if everyone was completely honest and no fraud existed in the universe, that kind of interest rate amounts to gambling. Unfortunately for you, fraud does exist. 3000% interest rate is fraud.

(Since BTC has gained in value against everything, the real interest rate is actually much higher than 3000%)
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August 14, 2012, 02:28:09 PM
 #742

Since BTC has gained in value against everything, the real interest rate is actually much higher than 3000%
I agree, both combined is the best deal one could get Grin
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August 14, 2012, 03:27:55 PM
 #743

Hey, you Pirate supporters, could you point me to ONE case in history where someone has paid consistently several thousand percent REAL interest rate for an unlimited number of debtors over extended time where the nature of the business was not disclosed to investors that didn't turn out to be a scam.

The extended time you speak of is right at a year and its in a brand new/emerging technology.  Look at any brand new, rapidly growing company and their rates will be off the charts and of course if you extrapolate those rates to infinite they look ridiculous. That's part of the point that the 'pirate supporters' are trying to make.. a high interest rate isn't a clear indicator all by itself.

Investing in stocks or shares is one thing. A startup company is telling you "give me money so our business may succeed and we'll all earn good money". You make the decision to invest or not invest based on your judgment whether the expected returns on the investment is positive in the light of the viability of the business model, the state of the market, etc.

Lending money to someone who promises to pay 3000% interest to everyone and doesn't disclose their business model is just stupid. If you've done that you're an idiot. Even if everyone was completely honest and no fraud existed in the universe, that kind of interest rate amounts to gambling. Unfortunately for you, fraud does exist. 3000% interest rate is fraud.

(Since BTC has gained in value against everything, the real interest rate is actually much higher than 3000%)

With all your definite facts sucked out of your thumb I think its time to inform all religions that their messiah allready arrived.

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August 14, 2012, 03:31:03 PM
 #744

OK, so if I'm understanding this correctly, if someone chooses to have their interest paid out and manually reinvests it by sending them back to their deposit address that'd put them over the 5% limit pretty quickly and they wouldn't get the bonus, but if they automatically reinvest the same amount of interest they can increase their account balance by far more than the 5% limit each month. That's quite interesting - it effectively gives an incentive for people who want to reinvest to keep the interest money within the scheme, which means that if it is a ponzi it can keep going for longer because pirateat40 no longer needs to keep as many cold hard bitcoins around for the weekly interest payments. (Plus, presumably if they then decide to manually withdraw a substantial portion of the interest they'd be penalized fot that too.)

So if I read what you just said correctly, you're talking about an instance where someone receives their paid out interest, deposit it back in, and then withdraw it again.  Of course he's gonna penalize that!  You're wasting everyone's time with all of this in and out.  He's borrowing coins for the sake of using them, not just to pay you interest.  If he's got to keep a huge slush fund that can't be used for business purposes, but still has to pay interest on that slush, its effectively cutting into his margins. 

BTCST doesn't appear to be setup to be your bitcoin checking account.  It was designed to be a savings account of sorts.  Its called Bitcoin Savings and Trust, not mybitcoin wallet.  Its the same premise with savings accounts at a US Bank.  They limit the number of withdrawals you can do per month in your savings account, because if you need a lot of transaction volume, it should be a checking account.

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August 14, 2012, 03:33:07 PM
 #745

Lending money to someone who promises to pay 3000% interest to everyone and doesn't disclose their business model is just stupid. If you've done that you're an idiot. Even if everyone was completely honest and no fraud existed in the universe, that kind of interest rate amounts to gambling. Unfortunately for you, fraud does exist. 3000% interest rate is fraud.

(Since BTC has gained in value against everything, the real interest rate is actually much higher than 3000%)

Who's the bigger idiot: the one doing as you say or the one trolling the people who you claim to be idiots?  herpderp.

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August 14, 2012, 03:42:51 PM
 #746

Investing in stocks or shares is one thing. A startup company is telling you "give me money so our business may succeed and we'll all earn good money". You make the decision to invest or not invest based on your judgment whether the expected returns on the investment is positive in the light of the viability of the business model, the state of the market, etc.

And now for a reasonable answer:

When I started loaning coins to pirate, it was much smaller, with only a handful of people. He never promised this would continue forever.  Over time, its grown but pirate's not done anything contrary to what he originally said and given me any real cause to not trust him.  Now, there's a bunch of people coming into this late in the game, claiming to have insight that others just can't see because they're "idiots".

Even if it was gambling, that's my right and often times, venture capital is gambling, even with the best of knowledge.  To call me an idiot because I partake is well within your right, but it doesn't make you correct.

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August 14, 2012, 04:15:40 PM
 #747

So if I read what you just said correctly, you're talking about an instance where someone receives their paid out interest, deposit it back in, and then withdraw it again.  Of course he's gonna penalize that!  You're wasting everyone's time with all of this in and out.  He's borrowing coins for the sake of using them, not just to pay you interest.  If he's got to keep a huge slush fund that can't be used for business purposes, but still has to pay interest on that slush, its effectively cutting into his margins.
For one thing, there's no way for pass-through bonds to handle people who want to reinvest other than asking Pirate to send out interest payments and then redepositing any re-investments at a later date. So given the 5% limit which reduces the amount of new shares that GLBSE bonds can issue if they want to receive the top interest rate, any pass-through bond holder who wants to reinvest any of their interest will have to either get someone else to sell them their shares or invest directly in BS&L - at which point BS&L no longer has to find the Bitcoins to make interest payments to them like they would for the pass-through bonds.

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August 14, 2012, 04:18:44 PM
 #748

For one thing, there's no way for pass-through bonds to handle people who want to reinvest other than asking Pirate to send out interest payments and then redepositing any re-investments at a later date.

That's just wrong and you aren't thinking outside the box.

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August 14, 2012, 05:02:31 PM
 #749

Rate change: https://bitcointalk.org/index.php?topic=50822

Discuss.


unclescrooge
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August 14, 2012, 05:13:53 PM
 #750

OMG ponziiiiiiii

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August 14, 2012, 05:26:12 PM
 #751


Clearly a ponzi because no legitimate business has ever had to change their rates.

/sarcasm
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August 14, 2012, 05:31:35 PM
 #752

How much would you pay people to not be competition while giving you time to become "the" bitcoin savings account/go to guy(or anything else you want to call it really)?

The door to the world is open, and pirate is building a giant shoe.

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August 14, 2012, 06:12:11 PM
 #753


It only counts when Lord Micon reports it.

I am thrillfully awaiting his presence.

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August 14, 2012, 06:48:43 PM
 #754

5% weekly, that's something like 1164% annualized I think? Still well into classical-ponzi territory.

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August 14, 2012, 07:06:00 PM
 #755

Does Pirate clarify this decision anywhere on the forums? It comes very fast after the restructuring of the accounts. Curious what triggered this sudden change.

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August 14, 2012, 07:16:17 PM
 #756

So he should introduce the same system as Hashking for predictability and be done with it. Lowering the rates will lead to more withdrawals I think.

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August 14, 2012, 07:17:13 PM
 #757

Does Pirate clarify this decision anywhere on the forums? It comes very fast after the restructuring of the accounts. Curious what triggered this sudden change.

Code:
<pirateat40> hashking, I tried to hold off thinking the operating wallets would balance out but they haven't fast enough so Im having to hold more reserves which is eating into my profit margin.
<hashking> ok.
<Chaaaang-Noi> you need more coin or less?
<riX2000> probably less withdrawals/deposits
<teek> sounds like he needs less in / out
<pirateat40> Its a stability thing, its getting harder and harder to predict when coins will come in and go out.
<Chaaaang-Noi> i see
<pirateat40> So I'll have times when im holding too many coins in op wallets and move some over and then get a flood of withdraws.
<Chaaaang-Noi> could you just lock it so we can only take out on mondays or someting?
<pirateat40> Yea, but i hate limiting people moving funds.

Here, for those curious about the reason.

How does a rate decrease help stability ?

Discuss that...

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August 14, 2012, 07:24:03 PM
 #758

^^ it helps maintain healthy bottom line. stability can't be predicted with no hardcoded limits on withdraw/deposits
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August 14, 2012, 07:26:56 PM
 #759

Does Pirate clarify this decision anywhere on the forums? It comes very fast after the restructuring of the accounts. Curious what triggered this sudden change.

Code:
<pirateat40> hashking, I tried to hold off thinking the operating wallets would balance out but they haven't fast enough so Im having to hold more reserves which is eating into my profit margin.
<hashking> ok.
<Chaaaang-Noi> you need more coin or less?
<riX2000> probably less withdrawals/deposits
<teek> sounds like he needs less in / out
<pirateat40> Its a stability thing, its getting harder and harder to predict when coins will come in and go out.
<Chaaaang-Noi> i see
<pirateat40> So I'll have times when im holding too many coins in op wallets and move some over and then get a flood of withdraws.
<Chaaaang-Noi> could you just lock it so we can only take out on mondays or someting?
<pirateat40> Yea, but i hate limiting people moving funds.

Here, for those curious about the reason.

How does a rate decrease help stability ?

Discuss that...

A.) Everyone get 7% and deposit/withdraw habbits is all over the place, assume due to these situations pirate effectively can only generate 10% returns on whatever he is doing.

B.) Everyone get 5% and deposit/withdraw habbits is all over the place, assume due to these situations pirate effectively can only generate 10% returns on whatever he is doing.


Pretty clear that from a profitable margin option B is helping alot more than option A.

...In the land of the stale, the man with one share is king... >> Clipse

We pay miners at 130% PPS | Signup here : Bonus PPS Pool (Please read OP to understand the current process)
unclescrooge
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August 14, 2012, 07:28:36 PM
 #760

Does Pirate clarify this decision anywhere on the forums? It comes very fast after the restructuring of the accounts. Curious what triggered this sudden change.

Code:
<pirateat40> hashking, I tried to hold off thinking the operating wallets would balance out but they haven't fast enough so Im having to hold more reserves which is eating into my profit margin.
<hashking> ok.
<Chaaaang-Noi> you need more coin or less?
<riX2000> probably less withdrawals/deposits
<teek> sounds like he needs less in / out
<pirateat40> Its a stability thing, its getting harder and harder to predict when coins will come in and go out.
<Chaaaang-Noi> i see
<pirateat40> So I'll have times when im holding too many coins in op wallets and move some over and then get a flood of withdraws.
<Chaaaang-Noi> could you just lock it so we can only take out on mondays or someting?
<pirateat40> Yea, but i hate limiting people moving funds.

Here, for those curious about the reason.

How does a rate decrease help stability ?

Discuss that...

It doesn't help stability, it helps him staying profitable because instability eats his margin.

And we can thank ponzis boys for increasing instability I think...

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