Here's why BTCST won't last for one year

[Kazimir]

7% interest a week equals about 3300% a year.

Currently, there seems to be about 400K BTC invested in BTCST ¹.

In one year from now, this would be 400K x 34 = 13.6 million BTC ².

In one year from now, there will be a total of approximately 11.2 million BTC in existence ³.

Does not compute.


Explanation of figures:

(1) The 400K is a rough estimation extrapolated from the 26K~28K BTC weekly interest, then again, that pretty much evens out vs the assumption that eventually 100% of all BTC in existence would be invested in BTCST.

(2) 1.07^365/7 > 34

(3) 365*24*6*(50*4+25*½)

[Scott J]

Edit: Here's why BTCST won't last for one year at 7%.

[Kluge]

Within three months, I bet the screamers of "PONZI!" will claim their education of the masses, that 7%/wk is unsustainable, is what led Pirate to lower rates.

Clearly, people are on to Pirate's scam, and so he's going to lower rates to build confidence... but then it's going to go BOOM, and all the idiots who invested in his scheme will have nothing, and I'll laugh. I'm thinking this scheme only has -1 or 1 week left, anyway. All the scammers in collusion probably left, so there're just the idiot know-nothings at the bottom left, waiting to have their savings ripped away from them.

[Willowbitcoin]

Im confused kludge.

Arent you invested with pirate ?

[Kazimir]

Just to be clear: I'm NOT accusing pirate of running a scam or anything. So far he's done a great job on earning people lots of money. Kudos!

I just wanna emphasize that 7%/wk is not just extremely unlikely, it's simply NOT POSSIBLE to go on much longer.

Now, I hate to see lotsa people losing tons of money. Even if it's just the idiot know-nothings at the bottom. Perhaps they need to learn their lesson the hard way, sure, but 400K going BOOM may hurt the overall trust in Bitcoin. That would suck. Even though it makes no sense at all, a bunch of greedy fucktards trusting one anonymous guy obviously has nothing to do with the trustworthiness of Bitcoin itself. But that's how shit works, the overall trust in Bitcoin will be damaged.

People, please get your heads out of the sand. By all means, keep putting your savings in BTCST or any of the pass through constructions, trusts, bonds, whatever. Enjoy the ride (and the profits) but please keep in mind that it could be over any time. So be prepared, and don't whine or blame anyone but yourself when it happens.

Now, in the mean time I'm off buying some more pirate bonds, since this is just spare money that I can afford to take a risk with.

[Scott J]

Im confused kludge.

Arent you invested with pirate ?

I was a bit confused too - I'm sure he's expressing the view of the sceptics, though it could have been clearer

[Soros Shorts]

Im confused kludge.

Arent you invested with pirate ?

I was a bit confused too - I'm sure he's expressing the view of the sceptics, though it could have been clearer

"I'm thinking this scheme only has -1 or 1 week left"

I guess the sarcasm was buried in 2 characters?

[guruvan]

I'm seriously hoping the sarcasm generator on kluge's machine is malfunctioning. The comment was that he's gonna put 15-20% back into pirate after vegas happened.

[memvola]

I'm seriously hoping the sarcasm generator on kluge's machine is malfunctioning.

I think it's functioning just fine.

In one year from now, there will be a total of approximately 11.2 million BTC in existence ³.

Does not compute.

Any ordinary investor already knows that before investing. Even if some small number of them might have missed it, this "maths education" has been given so many times in so many related and unrelated threads that I want to rip my eyes out. No offense, I wish everyone shared your humble style.

[CoinCidental]

Its  pretty incredible that people are STILL investing when the numbers indicate that in 18 months or so Pirate
will have paid out all the bitcoins in existence ............including the ones that havent even been mined yet 

[Scott J]

Its  pretty incredible that people are STILL investing when the numbers indicate that in 18 months or so Pirate
will have paid out all the bitcoins in existence ............including the ones that havent even been mined yet 

Are you aware that interest rates are flexible?

[Kluge]

SGI posted a quarterly %RoE of -61.72%. In less than a century, they will have consumed all of the financial world with losses! It'll be even BIGGER than the persistently-looming derivatives nightmare!

Over the past decade, the prime rate has decreased at a relative rate of around 10% per year, so pretty soon, we're going to start seeing negative interest rates for the common man, followed by a devastating deflationary spiral to collapse. Basically - by 2050, the interest rate on your mortgage will be -30.5% APY.

[rjk]

Basically - by 2050, the interest rate on your mortgage will be -30.5% APY.

Woot

[CoinCidental]

Its  pretty incredible that people are STILL investing when the numbers indicate that in 18 months or so Pirate
will have paid out all the bitcoins in existence ............including the ones that havent even been mined yet 

Are you aware that interest rates are flexible?

Are you aware hes also throwing out ADDITIONAL % bonus "incentives"  for people who keep their balance at a high level  and dont withdraw it ?

[imsaguy]

Its  pretty incredible that people are STILL investing when the numbers indicate that in 18 months or so Pirate
will have paid out all the bitcoins in existence ............including the ones that havent even been mined yet 

Are you aware that interest rates are flexible?

Are you aware hes also throwing out ADDITIONAL % bonus "incentives"  for people who keep their balance at a high level  and dont withdraw it ?

Yeah, he's offering bonuses for people that don't deposit more money.. totally ponzi! 

[MrTeal]

Its  pretty incredible that people are STILL investing when the numbers indicate that in 18 months or so Pirate
will have paid out all the bitcoins in existence ............including the ones that havent even been mined yet 

Assuming that everyone reinvests all the interest and don't use it for other purposes.

[Mageant]

It's obvious it won't carry on like it is now for another year.

As the amout of Bitcoin that Pirate controls becomes larger we would expect the price to rise. Eventually it would rise faster than Pirate can expand his business. He has said himself the only thing that could stop him would be a sharp rise in the Bitcoin price.

But that does not mean it must end in a catastrope or a default.

Pirate could simply pay a lower yield or stop accepting new deposits and alway pay out the interests.

[Tomatocage]

7% interest a week equals about 3300% a year.

Currently, there seems to be about 400K BTC invested in BTCST ¹.

In one year from now, this would be 400K x 34 = 13.6 million BTC ².

In one year from now, there will be a total of approximately 11.2 million BTC in existence ³.

Does not compute.


Explanation of figures:

(1) The 400K is a rough estimation extrapolated from the 26K~28K BTC weekly interest, then again, that pretty much evens out vs the assumption that eventually 100% of all BTC in existence would be invested in BTCST.

(2) 1.07^365/7 > 34

(3) 365*24*6*(50*4+25*½)

LOL 1 YEAR?!?  Something like that wouldn't last 3 MONTHS hahah

[Kazimir]

LOL 1 YEAR?!?  Something like that wouldn't last 3 MONTHS hahah

FYI, it has been up and running for 8 (eight) months so far, sir.

[theymos]

It's not impossible for him to pay more BTC than exists over a long period of time. He could, for example, pay out 1 million BTC, buy that BTC back using USD, and repeat until he's paid the ~13 million BTC. Something like that could happen legitimately with a gigantic, extremely productive company (the company would buy the BTC back with its products instead of USD). MtGox has probably sent more BTC than exists.