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

[memvola]

Getting paid interest is against islamic law ? I thought getting charged interest is against that law.

No, it's getting paid interest. You can be charged interest even against your own will.

Btw, someone should call all the islamic banks and tell them they wont go to allah, they all operate for profit unless they are all heathens.

What's forbidden is to get interest for loaning out money. You can invest in a business and expect a dividend. This is to protect the poor from abuse. Also, rich people have a duty to pay 1/40 of their entire fortune to the poor each year. The whole scheme would fail to make sense if you heavily scrutinize it, but the intention behind it is pretty clear IMO.

As wachtwoord said, an Islamic bank can't invest in a business if it doesn't know what it does with the money. This actually saved the Islamic banks from the last couple crises.

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[mc_lovin]

Holy ponzi talk.  I hope you guys are wrong.

[wachtwoord]

But lets come back to the bet. I'd really like to make this bet with Frankie 

[Micon]

oh I just a love a good trainwreck!



the ignorant Ponzi defenders may be loud, but you will be wrong.

What day is this week's interest payments?  this should be a block-chain lulzfest.

[Shadow383]

oh I just a love a good trainwreck!



the ignorant Ponzi defenders may be loud, but you will be wrong.

What day is this week's interest payments?  this should be a block-chain lulzfest.

It's always on a monday.

Also, could someone on here who has a BTCST account tell me how the interest payments work? I assume it's possible to make it auto-compound? So the 26000BTC in interest payments this week doesn't necessarily reflect the size of exposure.

I just want some vauge idea of what the market's overall exposure to BTCST is... we could see a massive price hit in other GLBSE shares and the price of bitcoin itself in the event of a collapse.

[Frankie]

Inside information from which evil genius? The adaptive nature of the network makes that extremely unlikely.

You work for the U.S. Department of Justice.  You know that in mid August, FBI agents are going to seize all exchanged in the US, charge the operators with money laundering, arrest five of the largest dealers on SR, arrest 25 of the largest customers, and announce that the UIGEA will be applied vigorously against any US financial institution that conveys money to a bitcoin exchange.

In this hypothetical, I think it's fair to say you would want to take bitcoin loans in early August!

I agree that Pirate's rates are so exorbitant that even inside such knowledge would not assure he could cover the loans over this long time scale, so I agree that this "legitimate" scheme is unlikely.

Now that's more like it. I'd just wonder how Pirate knew he'd be raided a month in advance. Plus, unless everyone with access to the dead man contingency were incapacitated, the funds could still be returned.

Wait, what?

Not that my invented hypothetical is worth discussing, but Pirate is thought to be neither an exchange operator nor a drug dealer, right?

Uh, if he returns *all* the coins, it's not a Ponzi by definition, so yes.

I would cover 2-to-1 he runs within 8 weeks though. (More than Pirate rates!)

How much do you wish to wager and who would you accept as escrow?  May be we could ask senbonzakura. He has no-interest whatsoever in Pirate (against Islamic law) and would not charge a fee.

3 times my money in 8 weeks is 14.7% compounded weekly interest

This is obviously a gamble; while I think it's clear he's bust in the long run, during any particular chunk of time, he may be able to find more deposits. The waning passthrough enthusiasm suggests to me that the scheme's days are numbered, but I could certainly be wrong. Maybe, for example, his stunt in Vegas will convince his most loyal to pour more into it, so that it lasts several more months. That said, I think there's better than 66% chance that it falls apart in the next 8 weeks, hence the offer.

The limiting factor for me is counterparty risk. I'm just new to the community. One person I've talked to a couple of times is BCB; I'd trust him with 60 BTC. I'd have to look into other proposals.

We'd also want to hammer out an unambiguous definition of default. A lot of Ponzis unravel with lame excuses for payment delays, replacing claims with vouchers, etc. If this sort of nonsense happens on the tail end of my 8 week term, I think it'll be default, and I would like to make sure the bet is held open long enough to unambiguously show that the principle ain't getting paid back to investors.

[peasant]

What do you think of Hashkings Lending?

[wachtwoord]

This is obviously a gamble; while I think it's clear he's bust in the long run, during any particular chunk of time, he may be able to find more deposits. The waning passthrough enthusiasm suggests to me that the scheme's days are numbered, but I could certainly be wrong. Maybe, for example, his stunt in Vegas will convince his most loyal to pour more into it, so that it lasts several more months. That said, I think there's better than 66% chance that it falls apart in the next 8 weeks, hence the offer.

The limiting factor for me is counterparty risk. I'm just new to the community. One person I've talked to a couple of times is BCB; I'd trust him with 60 BTC. I'd have to look into other proposals.

We'd also want to hammer out an unambiguous definition of default. A lot of Ponzis unravel with lame excuses for payment delays, replacing claims with vouchers, etc. If this sort of nonsense happens on the tail end of my 8 week term, I think it'll be default, and I would like to make sure the bet is held open long enough to unambiguously show that the principle ain't getting paid back to investors.

I know two people that would likely escrow without a fee (I have  ask of course). Senbonzakura (read: https://bitcointalk.org/index.php?topic=21732.0 if you do you'll agree this is not a guy who steals) and PatrickHarnett (I didn't mention him because he run a pass through and giving the nature of this thread you have an issue with those )

I ave no idea who BCB is.

With regard to rules, I think we can just use those of the Pirate Vandroiy bet (in https://bitcointalk.org/index.php?topic=91661.0).

Concerning your comment of trusting 60 BTC with someone I figure the bet would be my 30 BTC vs your 60 BTC correct?

[Frankie]

Yes, that would be the size of the bet. I don't care so much about the fee as trust I have in the counterparty. No, Patrick is out. Will look into Senbon.

[hgmichna]

This is obviously a gamble; while I think it's clear he's bust in the long run, during any particular chunk of time, he may be able to find more deposits. The waning passthrough enthusiasm suggests to me that the scheme's days are numbered, but I could certainly be wrong. Maybe, for example, his stunt in Vegas will convince his most loyal to pour more into it, so that it lasts several more months. That said, I think there's better than 66% chance that it falls apart in the next 8 weeks, hence the offer.

Exactly my thoughts too, by the way. I arrive at similar figures.

A large surprise investor could extend the scheme, if pirateat40 is greedy enough to hope for yet another one. But, failing that, I'm actually not sure why he hasn't called game over already. These weekly payouts certainly bite into his stash, and, as a rough, statistical guess, they are growing exponentially.

[Shadow383]

Yes, that would be the size of the bet. I don't care so much about the fee as trust I have in the counterparty. No, Patrick is out. Will look into Senbon.

To clarify, Patrick's primary business is lending out BTC payday loans at rates of a few percent per week, and investing in mining securities (which typically pay 1-2 percent per week).
He pays 1% on deposits and if you watch the lending subforum he is heavily involved in making BTC loans - in fact his scheme is one of the places I store BTC, and I've followed it through the blockchain and seen the rough volume of those loans. That scheme doesn't have any direct BTCST exposure - of course it is vulnerable to the risks of a major market crash in the event of a BTCST default (because it has been profitable for investors to borrow from him to buy into PPTs for some time now, and recently-burned investors would likely crash the value of other BTC securities in the short-run).

The BTCST passthrough is a very different part of the business and not particularly well used, as he only pays 5% versus the 6.9% on bitcoinmax.

If you're interested, I've started trying to uncover how large the exposure in the marketplace is to BTCST:
https://bitcointalk.org/index.php?topic=98225.0

Trouble is it's really all smoke and mirrors, it's very difficult to get proper stats from many of those involved...

[wachtwoord]

Shadow I agree and consider Patrick to be very trustworthy myself. However he does run breakthroughs (both directly and through PTT) so I figured Frankie would not approve

And Frankie: if you really don't mind about fees there are more possibilities (for example nanotube, the escrow of the Pirate -  Vandroiy  bet) but I would not want to pay the fees myself. I'm sure you'll find Shen trustworthy, I'm just not sure if he'd like to get involved (not that there is anything shady about this bet).

[imsaguy]

But, failing that, I'm actually not sure why he hasn't called game over already. These weekly payouts certainly bite into his stash, and, as a rough, statistical guess, they are growing exponentially.

Because maybe, just maybe, he's legit?

[Raoul Duke]

But, failing that, I'm actually not sure why he hasn't called game over already. These weekly payouts certainly bite into his stash, and, as a rough, statistical guess, they are growing exponentially.

Because maybe, just maybe, he's legit?

Naaaahhhhh... can't be!

[Micon]

But, failing that, I'm actually not sure why he hasn't called game over already. These weekly payouts certainly bite into his stash, and, as a rough, statistical guess, they are growing exponentially.

Because maybe, just maybe, he's legit?

nope.  simple maths.  When Pirate decides new investment this week < interest payouts, it's game over.  I agree that timing this ponzi tough because of the culture of Ponzi-acceptance on this board, hell Pirate might just find another 3000 BTC worth of you guys this week and has been faking the blockchain interest payments the whole time to look 2x or 5x or 10x bigger than he is & was, and for all we know it could go on another 7 or 8 weeks.  Seems highly unlikely after looking at some of the interest number going parabolic, which should be about when it goes boom.

[Clipse]

But, failing that, I'm actually not sure why he hasn't called game over already. These weekly payouts certainly bite into his stash, and, as a rough, statistical guess, they are growing exponentially.

Because maybe, just maybe, he's legit?

nope.  simple maths.  When Pirate decides new investment this week < interest payouts, it's game over.  I agree that timing this ponzi tough because of the culture of Ponzi-acceptance on this board, hell Pirate might just find another 3000 BTC worth of you guys this week and has been faking the blockchain interest payments the whole time to look 2x or 5x or 10x bigger than he is & was, and for all we know it could go on another 7 or 8 weeks.  Seems highly unlikely after looking at some of the interest number going parabolic, which should be about when it goes boom.

Its pretty gut-wrenching reading anything involving maths by you simply because I know from your past poker book attempts that you were more inclined towards feel-poker than math-poker which just shows that you are not up to the mathematical tasks in life and prefer the gambling approach of feel and hope.

Keep at it, I need my daily feed of feel good micon-juice in the same way people watch Jerry Springer.

[Shadow383]

nope.  simple maths.  When Pirate decides new investment this week < interest payouts, it's game over.  I agree that timing this ponzi tough because of the culture of Ponzi-acceptance on this board, hell Pirate might just find another 3000 BTC worth of you guys this week and has been faking the blockchain interest payments the whole time to look 2x or 5x or 10x bigger than he is & was, and for all we know it could go on another 7 or 8 weeks.  Seems highly unlikely after looking at some of the interest number going parabolic, which should be about when it goes boom.

Its pretty gut-wrenching reading anything involving maths by you simply because I know from your past poker book attempts that you were more inclined towards feel-poker than math-poker which just shows that you are not up to the mathematical tasks in life and prefer the gambling approach of feel and hope.

Keep at it, I need my daily feed of feel good micon-juice in the same way people watch Jerry Springer.

Then why don't you start selling BTCST CDS at 8%? I'd give it a run.

You can have a go at someone for past losses due to gambling, but from an outside perspective here's how this looks:

1-Nobody who is actually making >7% a week on here would keep issuing such a huge amount of extra debt. Why on earth would you finance yourself at 3400% APR when there would be plenty of demand even in the BTC world for an annual rate one-twentieth of that?

2-The market is not responding to trades that would make up 30000+ BTC/week in profit. I mean shit, if you perfectly timed literally every market movement on Gox you wouldn't make that, and especially in the environment of the past few weeks you'd be making a USD profit, not a BTC one. Pirate is not the only big mover in these markets either, so if the whole volume of our largest exchange wouldn't support the transactions required to keep him going what would?

3-Every time a thread like this gets opened, a dozen retailers of pirate investment schemes turn up and try to bury it. I know it's easy to not ask too many questions when you're making a nice little cut off the side - hell, Bernie Madoff gave his feeder funds about 90% of everything he ever took in fees, but this isn't a party that can go on for much longer. It's grown to the size now where I really do think we're approaching the limits of what should even be considered possible. So, last week's interest payment was 26000BTC. Seeing the amount that's going in and the amount that's compounding this week should be more like 30k. Do tell, where has BTCST made over 30k in profits this week? This isn't a big market, and a player that big should make some serious waves when they move their weight around, which they'd have to do a lot of to bring in that kind of cash each week.

4-Why pay 7%? If the business model wasn't just "bring in more deposits", you could find finance on these forums at 2% a week. Even at that level it would be tough for an operation as large as this one to be profitable, so why? Is Pirate some kind of philanthropist, giving back over a million dollars in interest every month for no good reason at all? I mean really?

People lose their shirts in the markets when they support things that don't obey basic fundamentals.
Just saying.

[Clipse]

nope.  simple maths.  When Pirate decides new investment this week < interest payouts, it's game over.  I agree that timing this ponzi tough because of the culture of Ponzi-acceptance on this board, hell Pirate might just find another 3000 BTC worth of you guys this week and has been faking the blockchain interest payments the whole time to look 2x or 5x or 10x bigger than he is & was, and for all we know it could go on another 7 or 8 weeks.  Seems highly unlikely after looking at some of the interest number going parabolic, which should be about when it goes boom.

Its pretty gut-wrenching reading anything involving maths by you simply because I know from your past poker book attempts that you were more inclined towards feel-poker than math-poker which just shows that you are not up to the mathematical tasks in life and prefer the gambling approach of feel and hope.

Keep at it, I need my daily feed of feel good micon-juice in the same way people watch Jerry Springer.

Then why don't you start selling BTCST CDS at 8%? I'd give it a run.

You can have a go at someone for past losses due to gambling, but from an outside perspective here's how this looks:

1-Nobody who is actually making >7% a week on here would keep issuing such a huge amount of extra debt. Why on earth would you finance yourself at 3400% APR when there would be plenty of demand even in the BTC world for an annual rate one-twentieth of that?

2-The market is not responding to trades that would make up 30000+ BTC/week in profit. I mean shit, if you perfectly timed literally every market movement on Gox you wouldn't make that, and especially in the environment of the past few weeks you'd be making a USD profit, not a BTC one. Pirate is not the only big mover in these markets either, so if the whole volume of our largest exchange wouldn't support the transactions required to keep him going what would?

3-Every time a thread like this gets opened, a dozen retailers of pirate investment schemes turn up and try to bury it. I know it's easy to not ask too many questions when you're making a nice little cut off the side - hell, Bernie Madoff gave his feeder funds about 90% of everything he ever took in fees, but this isn't a party that can go on for much longer. It's grown to the size now where I really do think we're approaching the limits of what should even be considered possible. So, last week's interest payment was 26000BTC. Seeing the amount that's going in and the amount that's compounding this week should be more like 30k. Do tell, where has BTCST made over 30k in profits this week? This isn't a big market, and a player that big should make some serious waves when they move their weight around, which they'd have to do a lot of to bring in that kind of cash each week.

4-Why pay 7%? If the business model wasn't just "bring in more deposits", you could find finance on these forums at 2% a week. Even at that level it would be tough for an operation as large as this one to be profitable, so why? Is Pirate some kind of philanthropist, giving back over a million dollars in interest every month for no good reason at all? I mean really?

People lose their shirts in the markets when they support things that don't obey basic fundamentals.
Just saying.

Let me give you a short answer relating to the common perception of fundamentals, "The Internet wasnt going to be used much" , "Not alot of people would require a personal computer" , say what you want but disruptive markets tend to be seen as something thats not plausible until they surprise enough to be noticed.

You are also working on the assumption that pirate guaranteed interest permanently, he can decide tomorrow that its over and send all due BTC out. Bernie promised returns at x% indefinitely, its not even close to the same thing.

Interest payment 26000BTC ? Nice you are also in the speculation camp who feel 100% certain their non-facts of what is included at each payment is definitely interest only which is seriously laughable. These payments do not correlate to what they speculate it must be be and now it seems you use this same false information as your evidence.

Ive never said I know exactly what pirate is doing nor that he only makes it from exchange trading and pirate also never said he only makes his margins on exchanging in fact that was the last bit of info he gave about what hes doing and it wasnt at all his main area.

[Shadow383]

Let me give you a short answer relating to the common perception of fundamentals, "The Internet wasnt going to be used much" , "Not alot of people would require a personal computer" , say what you want but disruptive markets tend to be seen as something thats not plausible until they surprise enough to be noticed.

You are also working on the assumption that pirate guaranteed interest permanently, he can decide tomorrow that its over and send all due BTC out. Bernie promised returns at x% indefinitely, its not even close to the same thing.

Yeah, I figured you weren't going to bother trying to answer any of my points.

Oh, and Bernie didn't promise shit, he just made up a number every month and made it positive 98% of the time.

[Clipse]

Let me give you a short answer relating to the common perception of fundamentals, "The Internet wasnt going to be used much" , "Not alot of people would require a personal computer" , say what you want but disruptive markets tend to be seen as something thats not plausible until they surprise enough to be noticed.

You are also working on the assumption that pirate guaranteed interest permanently, he can decide tomorrow that its over and send all due BTC out. Bernie promised returns at x% indefinitely, its not even close to the same thing.

Yeah, I figured you weren't going to bother trying to answer any of my points.

Oh, and Bernie didn't promise shit, he just made up a number every month and made it positive 98% of the time.

Did you have a stroke when you asked me questions and then I answered that which I had answers for ? Or was it some other monkey typing at that time ?

If you knew what I would answer, why ask me ?

PS. Bernie guaranteed interest above certain percentage thats why people kept reinvesting since those percentages kept on growing and looks more and more profitable for investors. Bernie also never stated that his investment fund would ever stop but then again you arnt looking for answers to why pirate isnt a ponzi and more in the direction why it is a ponzi.