Bryan Micon's List of BTC Ponzi Schemes that should not be listed as "Lending"

[vuce]

so the majority, i.e. >50% of the total "investors" in BCST have made money in your opinion?

I don't know for sure just like you don't know it's a ponzi, but I speculate so, yes. Pretty much all the big players have been in it from the beginning.

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[JoelKatz]

Pretty much all the big players have been in it from the beginning.

That can be an illusion, as it was in the Bernie Madoff case. (Everyone thought they held a much higher percentage of Madoff's deposits than they actually did because Madoff had far more money "on deposit" than he let on.)

[Micon]

If you ran or do run a pass-through to make .1% for helping a scammer scam the entire community, you are shameful and I hate you.  If you didn't think you were doing a bad thing when you started and now understand that you are helping an evil scammer scam, please PM me and I can help guide you on how to best dismantle your operation and return max value to your investors.  The few that will listen to me will save their investors at least some of the principle.  If you are running a pass-through, know it's a scam and feel the need to blindly defend Pirate because your .1% per week is at stake then you are also shameful and I also hate you.

Those are pretty harsh words dude.  I sure wish you had come out and joined us in Vegas.  I think that if you met those of us that you "hate" so much in person you would not be so darn harsh.  We might have even had a nice discussion about all this, who knows?

I would like to leave you with:  Please just consider the possibility that you just might be wrong about this.  Just temper your word a bit like "It is my opionon that this might be a ..." or even "I believe this is probably a ...", you see what I mean.  Just in case, on the remote chance, that there is something you do not know.

1)  My words may have been a bit harsh.  There is a good chance you do not understand the damage you are causing and do not believe what you are doing is wrong.  If you DO know what you doing is wrong, and do it any way to make a small profit then yes I stand by my statement and hate your core being.  I am extremely passionate about scamming / scammers because it happened to me when I was younger / stupider.  I try to tell as many others that will listen what 33 yr old me would have said to 27 yr old me to make me spot the scam as early as possible.

2) I do not consider the possibility I am wrong about this matter.  There is no legit Investment vehicle that returns 3000%+ per year.  Please do not trust me on this matter - ask anyone with a degree in economics.  Ask any accountant you know.  Ask any banker, any stock broker, any CBOE bond trader, google it - seek your own information about this very important point and understand then why I can be so certain.  

[miscreanity]

It doesn't work that way. If a fraudster gives you another investor's money, you don't get to keep it. Every dollar you withdraw is a liability. False profits can be clawed back to repay current "investors". Fraudulent transfers can be undone.

http://www.boston.com/business/articles/2010/12/18/picower_estate_adds_72b_to_madoff_fund/
http://utahsecuritiesfraud.com/2010/08/02/clawback-lawsuits-how-investing-in-a-ponzi-scheme-can-bite-you-twice/

If you received payments from a Ponzi scheme, your interest payments were not in fact interest payments. They were fraudulent transfers of other people's deposits.

This applies to a different legal and monetary system than what has applied to Bitcoin so far. In another jurisdiction, the onus may be placed on the client to perform due diligence.

And how would profits be forcibly returned? What if off-blockchain transactions were conducted that broke the chain of ownership? We'd end up discussing taint again.

Also, something good coming from a Ponzi?

Picower, whose Palm Beach, Fla., foundation was a major contributor to medical research at the Massachusetts Institute of Technology and Harvard University...

[miscreanity]

1)  My words may have been a bit harsh.  There is a good chance you do not understand the damage you are causing and do not believe what you are doing is wrong.  If you DO know what you doing is wrong, and do it any way to make a small profit then yes I stand by my statement and hate your core being.  I am extremely passionate about scamming / scammers because it happened to me when I was younger / stupider.  I try to tell as many others that will listen what 33 yr old me would have said to 27 yr old me to make me spot the scam as early as possible.

2) I do not consider the possibility I am wrong about this matter.  There is no legit Investment vehicle that returns 3000%+ per year.  Please do not trust me on this matter - ask anyone with a degree in economics.  Ask any accountant you know.  Ask any banker, any stock broker, any CBOE bond trader, google it - seek your own information about this very important point and understand then why I can be so certain.  

So now you're just old and stupid? Sad.

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

[Micon]

Pretty much all the big players have been in it from the beginning.

That can be an illusion, as it was in the Bernie Madoff case. (Everyone thought they held a much higher percentage of Madoff's deposits than they actually did because Madoff had far more money "on deposit" than he let on.)

Joel - I need help identifying possible shill forum accounts.  I run a 1M+ post poker forum and have since 2004 and understand characteristics of shills and dupes.  I need community members that have been around for a long time here to look through the now locked BCST thread and see if you can identify low post-count users that basically always just suck off Pirate40 and say how great he is and always enthusiastically report their interest was paid.  

Can you or anyone else help me try and identify shills?  I would bet even money they are out there in most of these Ponzi investment threads...

[JoelKatz]

This applies to a different legal and monetary system than what has applied to Bitcoin so far. In another jurisdiction, the onus may be placed on the client to perform due diligence.

I don't think it makes any difference what thing of value was exchanged, whether currency or commodity. If you think it makes a difference, please explain why.

As for the onus being on the client to perform due diligence, that does not mean what you think it means. If I hire a contractor to do work on my house, it's my responsibility to do due diligence to make sure I hire a reliable contractor. But if he sets my house on fire, he can't respond, "It was your responsibility to make sure I was a good contractor". That's just silly. That a victim's stupidity made him easy to victimize is only relevant if the question is how much we should feel sorry for the victim and how much we should hate the perpetrator. It doesn't change the victim's right to restitution or the wrongness of the exploitation of the victim. (It's just as bad to rob an idiot as a genius.)

And how would profits be forcibly returned? What if off-blockchain transactions were conducted that broke the chain of ownership? We'd end up discussing taint again.

If you kill my cow, you are not expected to resurrect the cow to return to me. You are expected to pay me the value of the cow. The same thing will happen here. If people who were the beneficiaries of fraudulent transfers can be identified, they can be subject to claw backs.

Also, something good coming from a Ponzi?

Quite the reverse, charities have historically been major victims of Ponzi schemes, just as they were here. The charity here was subject to a claw back.

[Micon]

1)  My words may have been a bit harsh.  There is a good chance you do not understand the damage you are causing and do not believe what you are doing is wrong.  If you DO know what you doing is wrong, and do it any way to make a small profit then yes I stand by my statement and hate your core being.  I am extremely passionate about scamming / scammers because it happened to me when I was younger / stupider.  I try to tell as many others that will listen what 33 yr old me would have said to 27 yr old me to make me spot the scam as early as possible.

2) I do not consider the possibility I am wrong about this matter.  There is no legit Investment vehicle that returns 3000%+ per year.  Please do not trust me on this matter - ask anyone with a degree in economics.  Ask any accountant you know.  Ask any banker, any stock broker, any CBOE bond trader, google it - seek your own information about this very important point and understand then why I can be so certain.  

So now you're just old and stupid? Sad.

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

again you guys can't help but make my point.  Pirateat40 needs to have a Facebook-level operation to pay this type of interest.

[JoelKatz]

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

Is that an attempt at humor? Or did you *totally* miss the point?

[Micon]

Those numbers are extremely alarming, and if you don't mind please link me to where that information comes from - is it simple addition of forum users that claim to have been paid?  do the numbers come from the block chain? could Pirate be sending BTC from his main wallet to just some other wallet he controls and then claims the transaction as interest?  

They're from the blockchain, yes.  It's possible pirate has set up some dummy accounts which he pays interest to each week but which go back into a wallet he controls, but what's the advantage to him of making the scheme look bigger than it actually is?

possible scenario how this helps him / connection to shill account theory too:

-- Pirateat40 sets up 10 latops on 10 VPNs with 10 BTC wallets and 10 bitcointalk.org forum accounts, creating them over time / maybe a few at the same time but spreading out sign up dates
-- He posts his BS scheme, talks the slick-talk about how he has super-trading margin lending fake whathaveyous
-- now he can fake 10 initial "investors" with block-chain verifiable deposits to his scheme. 
-- those future 7% interest payments cost him nothing as well, he's just sending the btc back to himself.  but you all see it in the blockchain as interest paid
-- credibility builds, use shill accounts to say how great it is / invite others into "trust accounts" and whatnot. 

[Micon]

Those numbers are extremely alarming, and if you don't mind please link me to where that information comes from - is it simple addition of forum users that claim to have been paid?  do the numbers come from the block chain? could Pirate be sending BTC from his main wallet to just some other wallet he controls and then claims the transaction as interest?  

They're from the blockchain, yes.  It's possible pirate has set up some dummy accounts which he pays interest to each week but which go back into a wallet he controls, but what's the advantage to him of making the scheme look bigger than it actually is?

possible scenario how this helps him / connection to shill account theory too:

-- Pirateat40 sets up 10 latops on 10 VPNs with 10 BTC wallets and 10 bitcointalk.org forum accounts, creating them over time / maybe a few at the same time but spreading out sign up dates
-- He posts his BS scheme, talks the slick-talk about how he has super-trading margin lending fake whathaveyous
-- now he can fake 10 initial "investors" with block-chain verifiable deposits to his scheme. 
-- those future 7% interest payments cost him nothing as well, he's just sending the btc back to himself.  but you all see it in the blockchain as interest paid
-- credibility builds, use shill accounts to say how great it is / invite others into "trust accounts" and whatnot. 

I laughed till I hurt myself.  I don't think you can top that one so I am off to bed.  Carry on (I am sure you will).

Care to make a 100 BTC wager with me that we will escrow to a person we mutually agree upon that BCST will default by the end of 2013?  I love free BTC! 

[miscreanity]

This applies to a different legal and monetary system than what has applied to Bitcoin so far. In another jurisdiction, the onus may be placed on the client to perform due diligence.

I don't think it makes any difference what thing of value was exchanged, whether currency or commodity. If you think it makes a difference, please explain why.

Bitcoin still has no major legal precedents set. Because it is significantly different from traditional monetary systems, it may prove difficult to apply existing rulings without changes being made to them.

As for the onus being on the client to perform due diligence, that does not mean what you think it means. If I hire a contractor to do work on my house, it's my responsibility to do due diligence to make sure I hire a reliable contractor. But if he sets my house on fire, he can't respond, "It was your responsibility to make sure I was a good contractor". That's just silly. That a victim's stupidity made him easy to victimize is only relevant if the question is how much we should feel sorry for the victim and how much we should hate the perpetrator. It doesn't change the victim's right to restitution or the wrongness of the exploitation of the victim. (It's just as bad to rob an idiot as a genius.)

Yes, the contractor is the subject. What seems to be the case with claw backs is that workers hired by the contractor are being targeted as well, at least in regard to BS&T.

If the perpetrator has a proven history, responsibility can be broken down into the risk of participating from the victim's perspective based on available information, and the actual commission of the act by the criminal. As you pointed out, there is no getting off the hook for an act of aggression, but there is a subjective scale of sentiment for the victim.

If you kill my cow, you are not expected to resurrect the cow to return to me. You are expected to pay me the value of the cow. The same thing will happen here. If people who were the beneficiaries of fraudulent transfers can be identified, they can be subject to claw backs.

Exactly, remuneration. But in the context of Bitcoin, how are the claw backs accomplished if the individuals cannot be physically forced to give up their part? Also, how is ownership of a Bitcoin address proven any more than the user of an IP address?

Quite the reverse, charities have historically been major victims of Ponzi schemes, just as they were here. The charity here was subject to a claw back.

I hadn't seen that part.

[Micon]

I didn't follow everything you said but I will answer what I did follow:

1)  I'm a total defcon newb.  It has always interested me but I'm extremely busy running around all day trying to make this paper in a number of different ways the past decade or so.  Started reading about infosec a little bit when Anonymous started fucking with Scientology, and really started to go HAM when I saw lulzsec was taking bitcoin donations.  As soon as I found bitcoin I haven't stopped spending every free moment studying it.  I should have been more prepared and I really wanted to meet Bitcoin guys at Defcon - but i was playing the WSOP the 1.5 months leading up to this and I played a pretty intense schedule this year / didn't read / didn't understand / didn't make plans to go or get in the meet up thread on here and I really, really regret that.  I want to meet all of you fine BTC'ers.  'Specially the scammers.

What is defcon?

2)  I spent thursday, friday, saturday, and sunday wandering the Rio with a Bitcoin button (ty Freemoney) in the middle of my white tee (yup), putting on some 12 hour $1-$3 NL poker sessions just to talk with awesome defcon'ers about bitcoin and all the next level shit they are into.  It was so much fucking fun.  I ended up drinking all night 1 of the nights with 2 awesome dudes and by 6am we were arguing (more like they were explaining to me) particle physics / CERN project / Higgs and shit.   no one has a players card except those that choose to self-dox.  I made that decision long ago before I knew the ramifications of it.  I digress

So you were in Vegas this weekend?

3)  Your shameful manner is shameful.  you seem smart enough to know you are hurting a large amount of "investors" for a small pass-through profit margin.

I don't follow.  I am smart but Patrick is stupid?

4)  Do you believe that Pirateat40 and his BCST will continue indefinitely?

No.  Do you believe that IBM or even the United States of America or the US dollar will continue indefinitely?  But really, what I (some random stupid dude) believe or don't believe about Pirate and his business does not really matter to you does it?

Do you believe it to be sustainable?

The current interest rate, no.  His business, yes, as long as it remains profitable he will do it.

I could get backing and escrow a $1M USD bet that Bitcoin Savings & Trust will default within 5 years.  I could have cash at Aria for that wager within 2 weeks it's such an obvious scam.

USD?  Really?  Have you even read this forum at all?  Manly bets around here are made in BTC, not USD or any other random ponzi fiat funny money.

5)  I really wish I could have met this guy.  Love to see scammers in their scamming role and see how good they are.  This Pirate guy seems to be pretty good, not great, def. not the best unless [...stuff...].  Would really, really love to meet Pirateat40 and he is hereby issued a challenge to debate me on my live podcast on Wed.  Any of you naysayers are welcome if he won't come on the show (which he won't, he knows it's -EV for him)

I wish you could have joined us also.  Maybe next year.

1)  I live in Vegas
2)  it requires an almost Catholic amount of denial to compare IBM with Pirate's ponzi scheme
3)  what do you believe is Pirate's business unit that makes so much money?

[hgmichna]

2) I do not consider the possibility I am wrong about this matter.  There is no legit Investment vehicle that returns 3000%+ per year.  Please do not trust me on this matter - ask anyone with a degree in economics.  Ask any accountant you know.  Ask any banker, any stock broker, any CBOE bond trader, google it - seek your own information about this very important point and understand then why I can be so certain.  

Just by the way, and it has been said already early on in this thread, if somebody indeed establishes the unlikely ultra-high-yield business, he does not borrow money and distribute the gains. He keeps it for himself.

If pirateat40 had a business that yields 3,300% a year, he could invest one bitcoin and then earn 10 million bitcoins in 4.5 years. Of course he could also invest BTC 10,000 and earn 10 million bitcoins in just under two years. Why would he borrow money from others and give them the gain? Because he's such a good, altruistic person, of course.

Never mind that 10 million bitcoins do not even exist yet.

[hgmichna]

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

So did Mark Zuckerberg borrow money and pay out 3,000+% interest per year to his lenders?

[miscreanity]

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

Is that an attempt at humor? Or did you *totally* miss the point?

Facebook was a derivative of prior social networks. Pirate's operation is a derivative of other financial business models, not necessarily a Ponzi. The early growth patterns are similar, rapidly building an increasing share of their respective markets.

Initial investment in either would return enormous profit (not the FB IPO). Whether it's through capital gains or a huge dividend, the result is the same; we're just accustomed to the "normal" pattern of dividends being paid after the explosive growth phase.

Literally any business could be loosely compared to a Ponzi. A startup begins, grows rapidly until it encounters competition or the limits of its market, then slows or stops growing. The difference is that finance doesn't actually produce anything to support itself with once it hits the limit.

[miscreanity]

Why would he borrow money from others and give them the gain? Because he's such a good, altruistic person, of course.

Not necessarily.

Could you clarify please. What would be an example of an operation where having USD liabilites as opposed BTC liabilities is by 2-3 orders of magnitude more risky?

Ok lets say your business was in "pet rocks".

...

I don't know about you but that's what risk management means to me.

The way I reckon, that view is a much more responsible one than most here are assuming. To put it as Jim Sinclair might say, the days of colonial style wealth extraction that only benefit those at the top are over.

Sure, the concentration of wealth from a successful venture might be extreme at the top, but it leads to impoverishment and resentment of those involved, whether directly or indirectly. A rising tide raises all ships, but wealth extraction holds many underwater.

Instead of hoarding his shiny Bitcoins and his proprietary venture a la Facebook, Pirate is granting access to a potentially risky investment. Doing so means that no other business doing the same can offer as high a rate of return without copying his profit-sharing model.

As for his risk, it is not so much that Bitcoin might fail, but that those whom he is obligated to might come after him with pitchforks, demanding blood. To lessen or eliminate the latter, he is sharing access to his operation - in the event of failure, he'll step down as Captain of the ship rather than be forced to walk the plank like Jamie Dimon.

In light of that, lead on, Captain Pirate!

Reading posts like this makes me smile.  There're still smart people in this community and it's those people I've learned to surround myself with.

"Surround yourself with like-minded people who want to see you successful." - Robert Kiyosaki

[Shadow383]

Tell Mark Zuckerberg there are no investments that return 3000%+ per year.

Is that an attempt at humor? Or did you *totally* miss the point?

Facebook was a derivative of prior social networks. Pirate's operation is a derivative of other financial business models, not necessarily a Ponzi. The early growth patterns are similar, rapidly building an increasing share of their respective markets.

Initial investment in either would return enormous profit (not the FB IPO). Whether it's through capital gains or a huge dividend, the result is the same; we're just accustomed to the "normal" pattern of dividends being paid after the explosive growth phase.

Literally any business could be loosely compared to a Ponzi. A startup begins, grows rapidly until it encounters competition or the limits of its market, then slows or stops growing. The difference is that finance doesn't actually produce anything to support itself with once it hits the limit.

Okay, so apparently he paid out 26000BTC in interest last week.

If you had a bitcoin business that was able to produce >1.3 Million BTC per year, would you give such a large chunk of it away?
If he's really making such stellar returns, why is he still seeking new deposits?

Besides, if he was making profit equal to 16% of the entire currency (so far) per year, I'm fairly sure we'd be able to track down somebody he's done business with.

[OneEyed]

Care to make a 100 BTC wager with me that we will escrow to a person we mutually agree upon that BCST will default by the end of 2013?  I love free BTC!  

So, that was it then? It was only a setup so that you can propose a bet that cannot make you lose any money? If someone takes your bet, you only have to also put 100 BTC into pirateat40 fund at the same time: you'll either win because pirateat40 defaults (you'll get the 100 BTC from your opponent + the interests you got from pirateat40 in the meantime) or win because he doesn't default and you can take your principal back and have multiplied it by a large amount even after you lose the bet.

In fact, you're proposing to buy a 200 BTC insurance against pirateat40 default, for a cost of 100 BTC, valid until the end of 2013, at which date you would have made much more than that. Clever.

I must admit that I'm a little disappointed. I thought you were playing the white knight here, while you were just setting up the atmosphere needed to propose this bet.

[JoelKatz]

Literally any business could be loosely compared to a Ponzi. A startup begins, grows rapidly until it encounters competition or the limits of its market, then slows or stops growing. The difference is that finance doesn't actually produce anything to support itself with once it hits the limit.

Startups are completely honest about the fact that they are very high risk investments. The majority of startups fail.