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

[dooglus]

You should add Clipse to this list. He took the money from bonus pool and invested it with pirate without telling anyone or increasing payouts. At least people who invested with pirate knew the risks and got paid for it. He owes me about 90 btc, which was a good chunk of change when I requested payment. To me, this kind of behavior is far worse then selling pirate bonds.

Is that what Clipse was doing all along to make his pool pay?

After all his rudeness on his thread about how we just didn't understand his business plan he was investing his miners' funds in a probable ponzi?

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[JoelKatz]

If I understand you correctly, this is inaccurate, as some borrowers (we were debating vescudero) say they guarantee deposits. They may or may not be lying, but that still makes your statement invalid.

Read over the statement. I don't think it does. I'm not saying all investments are equal. I'm saying we've seen obviously absurdly bad investments that people have taken seriously and been willing to invest in. I believe that indicates a serious problem in the community.

My other point is, what is the difference between these business descriptions:

• lending out to other borrowers, investing in short term opportunities and investing in other bitcoin projects
• buying and mining with 10 BFL Single's and preordering 10 more Single SC's

Both have the same potential to be a scam. If you would support a bias towards the second one, the effect would be nothing more than making the scammers pick that method instead.

There is nothing inherently different in those two. Either of them could be perfectly legitimate if there's transparency. Both of them are bad investments if there's not. Investors should be careful with both such business plans.

All I'm saying is, your point is less convincing when presented as clear-cut. Even though the basic reasoning is sound, the dismissive approach will continue to lose effectiveness as exceptions to the "rule" increases.

What exceptions are there to the rule that an investment with no transparency or that promises suspicious return relative to risk is almost certainly a scam? (Or, in the rare case where there really does seem to be an unusually good business plan, must at least be evaluated with extremely heightened suspicion to ensure it's not a scam.)

[Shadow383]

You should add Clipse to this list. He took the money from bonus pool and invested it with pirate without telling anyone or increasing payouts. At least people who invested with pirate knew the risks and got paid for it. He owes me about 90 btc, which was a good chunk of change when I requested payment. To me, this kind of behavior is far worse then selling pirate bonds.

Is that what Clipse was doing all along to make his pool pay?

After all his rudeness on his thread about how we just didn't understand his business plan he was investing his miners' funds in a probable ponzi?

Nah, Clipse was hopping, I run a similar (but much, much smaller) little proxy, splitting my hashrate between hopping and a couple of other bonus pools to reduce variance.
I'm able to offer 105-110% PPS without ever investing the coins anywhere. To be honest I think clipse should have offered two rates for mining with and without BS&T exposure. That'd have been the ethical thing to do.

I just hope his miners get paid even if BS&T defaults 

[Micon]

Matt Wright was on the show at the beginning -->  we talk Pirate, Ponzi, his giant bet

http://www.donkdown.com/donkdown-radio-bitcoin-magazine-matt-pirateat40-ponzi-poker-is-skill-it-wasnt-just-bad-luck-all-these-years-crazier-mike/

Surprisingly hilarious. Thoroughly entertaining.

Came for Matthew had to say, stayed for Crazier Matt. (Old man cranky call-in.)  

Whenever you start echoing when you talk to a caller on the phone, ask the caller to mute the podcast or kill their speakers for the duration of the call.

my show is run by 1 man. 

That echo is classic computer-listener echo - but there is one problem - Crazier Mike does not own a computer

no clue why it echo'd so bad only when I was speaking.  One for him, many calls from skype to other phones that show worked fine.  I'm pretty sure he has a land line too. 

[memvola]

Read over the statement. I don't think it does. I'm not saying all investments are equal. I'm saying we've seen obviously absurdly bad investments that people have taken seriously and been willing to invest in. I believe that indicates a serious problem in the community.

My bad, I read it as if you were speaking about all offers. Then again whether or not there are some terribly unappealing investment offers doesn't seem too relevant to the case of vescudero and the like, which I was talking about regarding the notion of being too dismissive.

Since you haven't touched the subject of how vescudero's guarantee is worse than, say, CPA's guarantee, I'll go ahead and assume it's the fixed interest, which to me isn't very convincing. A better metric would be risk/reward ratio of running with the money, and I would more likely look at the deposited amounts. It fits perfectly to BTCS&T, MyBitcoin, Bitcoinica, bitscalper, REBATE and the like and excludes vescudero and CPA (for now of course).

Since no one is actually signing anything and almost all identities have almost perfect deniability, I would go a step further and suggest we usually include personality assessment when calculating the risk. This explains borrowers paying up after shutting down operation much better than "luck".

I think we both agree that these measures aren't good enough and we have to find a way to weed out scams. What we don't agree on is the hope that people will stop depositing money to fixed interest offers.

There is nothing inherently different in those two. Either of them could be perfectly legitimate if there's transparency. Both of them are bad investments if there's not. Investors should be careful with both such business plans.

Transparency is no absolute, and it can be very misleading for gullible investors. For those who can assess the risk, this is already not a black and white thing.

What exceptions are there to the rule that an investment with no transparency or that promises suspicious return relative to risk is almost certainly a scam? (Or, in the rare case where there really does seem to be an unusually good business plan, must at least be evaluated with extremely heightened suspicion to ensure it's not a scam.)

Even if there aren't any exceptions, you've successfully excluded everyone who claims (truthfully or untruthfully) to be even a little transparent, which almost all do. Also how do you measure suspicious returns? I remember my bank offering more than 100% "overnight" interest for extended periods, even when the inflation rate wasn't as high as Bitcoin's.

If we add some tolerance to the claim, then the ones that have paid up all debt before shutting down operation so far become exceptions, which are AFAIK all of the offers so far (hopefully pirate will be the first one to successfully complete a Bitcoin based HYIP scam). Should we do a generalization based on this sample? The same goes for other sorts of extreme generalizations.

So in summary, when you say that a well known person who gives a guarantee for deposits, who is limiting the total deposits to an amount that's not worth stealing, and who is mostly transparent with his investments is a Ponzi scheme because he's paying out interest more than banks do (but well within range of what can be done in the market), the argument seems to me to lose credibility. He might still steal my money, but the reasoning behind why the risk is supposed to be higher than any other investment option (available currently in the greater Bitcoin market) isn't clear at all.

[JoelKatz]

Even if there aren't any exceptions, you've successfully excluded everyone who claims (truthfully or untruthfully) to be even a little transparent, which almost all do.

I don't think I did that. I certainly didn't intend to. Perhaps it was a case where there was bogus transparency -- transparency that leads to complete opacity. For example, a bond that "transparently passes all money through to Pirate" is bogus transparency.

Also how do you measure suspicious returns? I remember my bank offering more than 100% "overnight" interest for extended periods, even when the inflation rate wasn't as high as Bitcoin's.

Suspicious would be, order of magnitude, more than double what you would expect from most completely transparent investments offering about the same level of risk.

So in summary, when you say that a well known person who gives a guarantee for deposits, who is limiting the total deposits to an amount that's not worth stealing, and who is mostly transparent with his investments is a Ponzi scheme because he's paying out interest more than banks do (but well within range of what can be done in the market), the argument seems to me to lose credibility.

I agree. I hope I didn't say that.

[Frankie]

Dude there is a big difference between not investing and starting a fucking crusade.

This is fair, but there's also a big difference between investing and attacking skeptics as FUDsters and worse.  I don't care what people want to do with their money, but a lot of the folks on this thread are culpable co-conspirators morally, if not legally.

[imsaguy]

Dude there is a big difference between not investing and starting a fucking crusade.

This is fair, but there's also a big difference between investing and attacking skeptics as FUDsters and worse.  I don't care what people want to do with their money, but a lot of the folks on this thread are culpable co-conspirators morally, if not legally.

There's a difference between being skeptical and calling someone a scammer.  Most of the FUDsters were claiming 100% irrefutable proof, when none existed.

[Frankie]

Dude there is a big difference between not investing and starting a fucking crusade.

This is fair, but there's also a big difference between investing and attacking skeptics as FUDsters and worse.  I don't care what people want to do with their money, but a lot of the folks on this thread are culpable co-conspirators morally, if not legally.

There's a difference between being skeptical and calling someone a scammer.  Most of the FUDsters were claiming 100% irrefutable proof, when none existed.

Really? Where did someone claim 100% irrefutable proof?  I saw a lot of people claiming that it exhibited all the characteristics of a Ponzi. That was true. If a passive investor felt differently, they were free to keep their high rates of return to themselves. That's not what many conspirators did.

In my humble opinion, you are being dismissive because you're convinced that it would be best if everyone stopped investing in these schemes.

Yes, exactly. Legitimate investments don't involve a complete absence of disclosure of what you're investing in, no way to estimate the actual level of risk, and no way to tell whether claimed losses were actually incurred or whether claimed profits were actually legitimate. No honest person should ask for investments on terms only a fool would accept.

We have actually seen offers that were basically: "Give me some money to invest, if I make money, I'll share it with you. Otherwise, you'll have to take my word that I actually lost your money in some kind of actual investment". That was literally all they were saying. And people were actually taking this offer seriously. That shows that this community is massively disconnected from reality.

I agree it's disappointing, and it's especially disappointing to see bitcoin rhetoric co-opted by Ponzi-boosters. Yes, Bitcoin is great, and has the potential to reduce transaction costs, but it's not the ticket to absurd rates of return.

[makomk]

seriously kids, get fucked on this one.  You were all so arrogant to the bitter end.

I'd say the fact that you're still trolling about it, long past the time when anyone can make a deposit or withdrawal on their own proves your own arrogance.  Its not like you can 'warn' anyone off.  You're just trolling for your own amusement.

I'm pretty sure that BS&T isn't the only investment scheme on these forums with suspiciously high returns and no evidence of actual investment, and it's definitely not going to be the last one.

There's a difference between being skeptical and calling someone a scammer.  Most of the FUDsters were claiming 100% irrefutable proof, when none existed.

There's a difference between skepticism and fake skepticism. You're asking for evidence which no-one would have even if BS&T was a ponzi, and so the lack of it gives no reason to doubt that BS&T is in fact one. We know this from previous ponzi schemes that have actually been investigated by law enforcement; the 100% proof isn't available until well after the scheme's collapsed, by which time it's a bit late to do anything about it.

(That's assuming people will believe they've been scammed then. I was looking into the whole Perma-Pave swindle the other day, and despite one of their investors filing a lawsuit with evidence that the payments to them had been made using the investments of others, goods they had been promised hadn't been delivered, and none of the customers the company claimed to have had actually received any goods from them either, there were still a whole bunch of people on forums who continued to insist that the company was above board and all the investors who'd not been paid the money they were promised were just a bunch of paranoid whingers.)

[hgmichna]

There's a difference between being skeptical and calling someone a scammer.

Yes. In this case the difference was the same as between having no brain and having one.

Or, in some cases it was the difference between profiting from the scam and being honest.

Most of the FUDsters were claiming 100% irrefutable proof, when none existed.

This is the typical garbage to be expected from you. Outside of mathematics there is rarely any "100% irrefutable proof", yet nobody (except you and a few others) would ask for it when sombody calls a duck a duck.

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

[Matthew N. Wright]

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

In the name of Satoshi Nakamoto, "Keep your opinions, politics and religion out of my bitcoin".

When people start talking about "protecting" me from things in Bitcoin, I can't help but equate it to the reasoning for Paypal holding my funds.

[hgmichna]

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

In the name of Satoshi Nakamoto, "Keep your opinions, politics and religion out of my bitcoin".

When people start talking about "protecting" me from things in Bitcoin, I can't help but equate it to the reasoning for Paypal holding my funds.

What if you find (soon enough, if you still haven't) that you did need protection?

The strength of the human civilization is based on people cooperating and helping each other to a degree that animals never attained (except perhaps some state-building insects). I am not going back down to animal level. When I see people in need of help, I help if I can.

Moreover, help, in the form of advice and warning, was always offered, but never was anyone prevented from making a mistake. People who ignore the warnings are completely free to throw their money away however they want.

But if the town is burning, you have no right to tell people to stop shouting "fire."

[Frankie]

But if the town is burning, you have no right to tell people to stop shouting "fire."

Bingo. This isn't about government intervention, this was always about speech. It was actually the Pirate collaborators who stood against freedom, talking about how irresponsible--or even libelous--it was to call a spade a spade.

Everyone is still free to be scammed, but we sure as fuck better be free to call something a scam.

[Vladimir]

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

In the name of Satoshi Nakamoto, "Keep your opinions, politics and religion out of my bitcoin".

When people start talking about "protecting" me from things in Bitcoin, I can't help but equate it to the reasoning for Paypal holding my funds.

Why dont you apply this to yourself and your actions, Matthew!

Why are  you so bent on censorship here? Do you realise what are you doing?

Do I need to pay money entering some stupid bets to say anything on that forum that you do not agree with?

Do you think it is wise to effectively make yourself part of a scam, no less after it has collapsed?

Have you already forgotten as your silly arguments were utterly destroyed in another thread?

Disgusting!

[Matthew N. Wright]

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

In the name of Satoshi Nakamoto, "Keep your opinions, politics and religion out of my bitcoin".

When people start talking about "protecting" me from things in Bitcoin, I can't help but equate it to the reasoning for Paypal holding my funds.

Why dont you apply this to yourself and your actions, Matthew!

Why are  you so bent on censorship here? Do you realise what are you doing?

Do I need to pay money entering some stupid bets to say anything on that forum that you do not agree with?

Do you think it is wise to effectively make yourself part of a scam, no less after it has collapsed?

Have you already forgotten as your silly arguments were utterly destroyed in another thread?

Disgusting!

The only thing disgusting is having to repeat myself. I'm not for censorship. You and anyone else are free to bark all day about what you think, but accusations, harassment, and defamation (example: THIS IS A PONZI) need to be backed up with evidence. If someone is quite sure of themselves, it's not a "gamble" to bet on what they say, it's just free money. I wonder how many times I'll have to repeat this.

Do you think it is wise to effectively make yourself part of a scam, no less after it has collapsed?

What scam are you referring to and what exactly collapsed? When referencing it, please also show a link to the evidence of it both being a scam and having collapsed, thanks.

On the off-chance you're referring to the whole Pirate thing, I'd like to remind the general public that you've declined to wager on it being a fraud or not. Seems strange for someone using such strong, serious and absolute wording.

[Vladimir]

What is even more disgusting is that it is seems no one whose opinion I value is posting on this forum anymore. With a very few exceptions, of course. There is no reason for me to remain here until this has changed. Bye for now.

[Micon]

I think it is high time for you to shut up and stop being part of the huge fraud most of us tried hard to protect people from.

In the name of Satoshi Nakamoto, "Keep your opinions, politics and religion out of my bitcoin".

When people start talking about "protecting" me from things in Bitcoin, I can't help but equate it to the reasoning for Paypal holding my funds.

Why dont you apply this to yourself and your actions, Matthew!

Why are  you so bent on censorship here? Do you realise what are you doing?

Do I need to pay money entering some stupid bets to say anything on that forum that you do not agree with?

Do you think it is wise to effectively make yourself part of a scam, no less after it has collapsed?

Have you already forgotten as your silly arguments were utterly destroyed in another thread?

Disgusting!

The only thing disgusting is having to repeat myself. I'm not for censorship. You and anyone else are free to bark all day about what you think, but accusations, harassment, and defamation (example: THIS IS A PONZI) need to be backed up with evidence. If someone is quite sure of themselves, it's not a "gamble" to bet on what they say, it's just free money. I wonder how many times I'll have to repeat this.

Do you think it is wise to effectively make yourself part of a scam, no less after it has collapsed?

What scam are you referring to and what exactly collapsed? When referencing it, please also show a link to the evidence of it both being a scam and having collapsed, thanks.

On the off-chance you're referring to the whole Pirate thing, I'd like to remind the general public that you've declined to wager on it being a fraud or not. Seems strange for someone using such strong, serious and absolute wording.

I understand that Matt's main point is "you guys cannot be totally sure that it's a Ponzi" 

I disagree.  There is more than enough evidence to look at the program and say "This is Ponzi Scheme" - maybe the exact perfect definition is "With a 99.999999999999% degree of certainty I can say this is a Ponzi scheme"  - I feel Matt would be more confident in the latter, but IMO it will take millions of lifetimes to average a not-a-scam, so we can just say "this is a fucking scam" and leave off the qualifiers.

[drakahn]

What evidence? I must keep missing it.

[Grinder]

What evidence? I must keep missing it.

The really huge ones:
- There has never been an investment scheme that promises to pay this well that didn't turn out to be a ponzi.
- Only one guy claims to have gotten 100 BTC 5+ days after he was supposed to start paying.

Perhaps you are confusing evidence with proof?