This rally is a pirate bubble

[Garr255]

What if we start a new thread trying to get people to pledge to withdraw 50k coins from pirate on a certain date, September 1 for instance. This would create lots of fear of a collapsing ponzi therefore even more withdrawals than the pledged amount. If Pirate would not be able to take the loss (because of a ponzi), he would simply stop allowing withdrawals and run, probably a day or two before the planned mass withdrawal.

How many coins does he have, anyway?

[Spekulatius]

One more thing, my new best guess for when pirate defaults is when we see a correction in the bitcoin price. Not mini-corrections in the uptrend, but a deeper correction followed by a trend reversal. This would be analogous to all the Wall Street ponzis which collapsed in 2008 when the stock prices reverses. Fear gripped the market, depositors wanted to withdraw from funds, and those withdraws exposed the ponzis.

That would be the latest estimate for when he defaults (most certainly before oct 2013), but of course it could be any time.

This is a very interesting thought. I did not know of that 2008 chain reaction, but it makes sense! The type of herd behavior is the same, so the withdrawals might correlate very well with trend-following sales.

Thanks for sharing this.

So now Pirate's Ponzi is fucked if the prices go UP and when they go DOWN! lol

[ArticMine]

One more thing, my new best guess for when pirate defaults is when we see a correction in the bitcoin price. Not mini-corrections in the uptrend, but a deeper correction followed by a trend reversal. This would be analogous to all the Wall Street ponzis which collapsed in 2008 when the stock prices reverses. Fear gripped the market, depositors wanted to withdraw from funds, and those withdraws exposed the ponzis.

That would be the latest estimate for when he defaults (most certainly before oct 2013), but of course it could be any time.

A Pirate default would likely to be triggered by a sharp increase in the BTC / USD price and in many scenarios could even trigger a BTC buying panic rather than a crash. De-leveraging makes the remaining currency more valuable not less so. During the recent downturn in 2008 prices went down making cash in the form of say USD more valuable. By the way I believe this rally is in spite of Pirate not because of him.

[sunnankar]

Stop spamming your post everywhere.

Not until after BTC hits about $13.... 

[jimbobway]

there are some strong hands holding onto BTC and the reward for mining has not even cut in half

Wonder how many people read my 9 June 2012 post before all this got started.

You also warned us not to pay too much for bitcoins.  You being a lawyer I can understand why you would say too opposite views in a subtle way such that you cant be wrong.

[mp420]

If this rally is indeed a bubble created by gullible "investors" entering the BTC market in order to "invest" in Pirate's scheme, it's going to be hilarious when the bubble collapses and everyone who bought high first withdraws from Pirate and then sells quickly, triggering the collapse of Pirate's ponzi scheme. Here's to hoping that the bubble takes BTC price to unprecedented highs!

[Yuhfhrh]

If this rally is indeed a bubble created by gullible "investors" entering the BTC market in order to "invest" in Pirate's scheme, it's going to be hilarious when the bubble collapses and everyone who bought high first withdraws from Pirate and then sells quickly, triggering the collapse of Pirate's ponzi scheme. Here's to hoping that the bubble takes BTC price to unprecedented highs!

Lol I can actually see this happening

[dust]

The case that would crash the price the most would be if pirate shuts down his operation and returns everyone's money.  This would result in a huge supply to sell and a bunch of people looking to take profits.

[CoinCidental]

The case that would crash the price the most would be if pirate shuts down his operation and returns everyone's money.  This would result in a huge supply to sell and a bunch of people looking to take profits.

thats assuming everyone would sell ..........

i think if pirate returned everyones coins many people would look for some other way to grow their balance by investing in something else ,even a mining op which pays 1-2 % a week would probably be overloaded with newcomers

thats assuming the btcst doesnt default though and thats a pretty big assumption when you think about those glorious interest rates ......

[niko]

i think if pirate returned everyones coins

Where would these coins come from? After interest payouts that already happened?

[stochastic]

So what is the estimated amount that is in the Pirate fund?

[silverbox]

So what is the estimated amount that is in the Pirate fund?

500k btc.

[Vandroiy]

So what is the estimated amount that is in the Pirate fund?

500k btc.

Note that such high estimates are paper coin estimates. I doubt BS&T collected so many actual BTC. We just see interest on former interest, and probably neither ever really existed.

Juggling coins to investors and receiving them back again as re-investment makes the impression of more coins being "inside". This can repeat for quite a while until people notice.

[aq]

So what is the estimated amount that is in the Pirate fund?

500k btc.

Then why does he only pay 7% a week. Lately he revealed to buy 18650BTC per day on average. So that would be more like 26%, and still he pays only 7%

[stochastic]

Most of the rally was for shits and grins.  If you're buying at these prices, you're making a mistake.

And if you are selling at these prices?

[byronbb]

So pirate has borrowed enough coins to give him the weight to manipulate the market and thus profit enough from his up an down game to pay off his lenders and make profit?

[stochastic]

So pirate has borrowed enough coins to give him the weight to manipulate the market and thus profit enough from his up an down game to pay off his lenders and make profit?

Everyone could just call their coins back.

[byronbb]

So pirate has borrowed enough coins to give him the weight to manipulate the market and thus profit enough from his up an down game to pay off his lenders and make profit?

Everyone could just call their coins back.

Why would they when they are essentially in cahoots with the pirate and making good money?

[Shadow383]

So pirate has borrowed enough coins to give him the weight to manipulate the market and thus profit enough from his up an down game to pay off his lenders and make profit?

How?
He'd need to be making in excess of BTC30000 profit per week to make this thing a legit business.
Check out the volume on Gox. If you were on the right side of every single move the market makes and made up 50% of the entire gox volume, you wouldn't make that. So where's he making that? The silk road doesn't even make that amount of profit.
It just isn't possible to make the numbers fit anymore. If anyone can work out a way that fits within the basic confines of reality that'd give 30000BTC per week whilst having no known customers and no obvious signs of market activity then please do tell.

[stochastic]

So pirate has borrowed enough coins to give him the weight to manipulate the market and thus profit enough from his up an down game to pay off his lenders and make profit?

How?
He'd need to be making in excess of BTC30000 profit per week to make this thing a legit business.
Check out the volume on Gox. If you were on the right side of every single move the market makes and made up 50% of the entire gox volume, you wouldn't make that. So where's he making that? The silk road doesn't even make that amount of profit.
It just isn't possible to make the numbers fit anymore. If anyone can work out a way that fits within the basic confines of reality that'd give 30000BTC per week whilst having no known customers and no obvious signs of market activity then please do tell.

He does not have to make a profit every week.  One week he might lose 5% but the still owe's his creditors 7%.  Then the next week he might make 20%, enough to cover the 2nd week and the negative funds from the first week.