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donator
Activity: 1654
Merit: 1351
Creator of Litecoin. Cryptocurrency enthusiast.
July 11, 2012, 01:01:43 PM
Sorry, but I don't think you understand what risk-free means. Whether or not they have made enough money to cover the insurance is besides the point. Is Apple's business now risk-free since they've made a boatload from ipods, iphones, and ipads?
And I don't think you understand what risk-free means.
I guess its a matter of language.
For me this investment is already risk free - I'm not going to admit that I was wrong stating this, because I wasn't.

You were actually just throwing FUD around. Sorry if most of us didn't appreciate you trying to enlighten us and save us from these PPT scammers. We are all adults here (well most of us), and we really are not as stupid as you think we are. If the price of PPT is too high for the insurance provided, we won't buy the bonds. There's no scamming going on around here. If the PPT owners need to raise the minimum price to stay profitable, then that's their prerogative. If you feel like the minimum price is too high, then you don't need to buy the bonds.

There are a lot of scams going on around these forums, but this is not one of them.
Of course I am not going to buy any more of these bonds - I wasn't waiting for your permission.

And are you saying that you are going to buy more of these overpriced bond?
Well, then enjoy the free insurance! Smiley

Thanks
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 11, 2012, 12:57:39 PM
Sorry, but I don't think you understand what risk-free means. Whether or not they have made enough money to cover the insurance is besides the point. Is Apple's business now risk-free since they've made a boatload from ipods, iphones, and ipads?
And I don't think you understand what risk-free means.
I guess its a matter of language.
For me this investment is already risk free - I'm not going to admit that I was wrong stating this, because I wasn't.

You were actually just throwing FUD around. Sorry if most of us didn't appreciate you trying to enlighten us and save us from these PPT scammers. We are all adults here (well most of us), and we really are not as stupid as you think we are. If the price of PPT is too high for the insurance provided, we won't buy the bonds. There's no scamming going on around here. If the PPT owners need to raise the minimum price to stay profitable, then that's their prerogative. If you feel like the minimum price is too high, then you don't need to buy the bonds.

There are a lot of scams going on around these forums, but this is not one of them.
Of course I am not going to buy any more of these bonds - I wasn't waiting for your permission.

And are you saying that you are going to buy more of these overpriced bond?
Well, then enjoy the free insurance! Smiley
donator
Activity: 1654
Merit: 1351
Creator of Litecoin. Cryptocurrency enthusiast.
July 11, 2012, 12:52:11 PM
So you are saying after weeks of operation, the people behind PPT could have made enough coins to now cover the insurance. How is that risk free? They are still using the profit they made to cover the insurance. Also you aren't taking opportunity cost into consideration when calculating their profit.
So how many risk-free weeks need to pass and how many more PPT.DIV stocks need to be sold, before you generously give me a right to say that the investment is already "risk-free" for the initial investors?
Is there such a number? Smiley

Sorry, but I don't think you understand what risk-free means. Whether or not they have made enough money to cover the insurance is besides the point. Is Apple's business now risk-free since they've made a boatload from ipods, iphones, and ipads?

You go from calling people liars to a hand wavy explanation about how you think it's possible that it's 100% risk free. I guess you will never admit you are wrong since there's always a way that you haven't figured out yet.

I did what was the right thing to do, and what nobody else wanted to do; explained to people what this business is about and that the initial investment has already been paid off, so decreasing the interest rates now because "we give free insurance" has no justification whatsoever. In fact, it's more of a scam - or just a lie, if you prefer calling it like this.

You are criticizing me for doing what I believed was right.
And what did you do in this time? Nothing. So spare mi your morals, because I don't need to be a genius like you to know that the best way to make no mistakes it just to do nothing.

You were actually just throwing FUD around. Sorry if most of us didn't appreciate you trying to enlighten us and save us from these PPT scammers. We are all adults here (well most of us), and we really are not as stupid as you think we are. If the price of PPT is too high for the insurance provided, we won't buy the bonds. There's no scamming going on around here. If the PPT owners need to raise the minimum price to stay profitable, then that's their prerogative. If you feel like the minimum price is too high, then you don't need to buy the bonds.

There are a lot of scams going on around these forums, but this is not one of them.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 11, 2012, 12:32:42 PM
So you are saying after weeks of operation, the people behind PPT could have made enough coins to now cover the insurance. How is that risk free? They are still using the profit they made to cover the insurance. Also you aren't taking opportunity cost into consideration when calculating their profit.
So how many risk-free weeks need to pass and how many more PPT.DIV stocks need to be sold, before you generously give me a right to say that the investment is already "risk-free" for the initial investors?
Is there such a number? Smiley

You go from calling people liars to a hand wavy explanation about how you think it's possible that it's 100% risk free. I guess you will never admit you are wrong since there's always a way that you haven't figured out yet.

I did what was the right thing to do, and what nobody else wanted to do; explained to people what this business is about and that the initial investment has already been paid off by the bond buyers, so decreasing them the interest rate now because "we give free insurance" has no justification whatsoever. In fact, it's more of a scam - or just a lie, if you prefer calling it like this.

You are criticizing me for doing what I believed was right.
And what did you do in this time? Nothing - so spare mi your morals, because I don't need to be a genius like you to know that the best way to make no mistakes it to simply do nothing.
donator
Activity: 1654
Merit: 1351
Creator of Litecoin. Cryptocurrency enthusiast.
July 11, 2012, 12:22:08 PM
Your chart shows that you're using insurers initial investment to pay out 1310 on week 4 to pay them back and on week 5 for the investment that was never deposited for PPT.A on week 1.
You are right.
Sorry - my bad.
Thanks for picking that up.

But since the insurance exposes the investor to the risk for 4 times longer period, while insuring only 25% of his output capital, I believe there must be an algorithm to eventually make it 100% risk-free for the business owner. And I will figure it out... But now I just need to honestly admit that I haven't actually figured it out yet. And apologize you for doubting in what you were saying.

piotr_n, I think you are wrong here. The insurance is not an illusion. You really don't need to create a chart to understand. Just remember that you can't have your cake and eat it too. Either the funds are with pirate earning interest or they are sitting there waiting for a default. They can't be doing both at the same time. Each PPT bond is held for 4 weeks. So the funds need to be with Pirate to earn 4 weeks of interest. If that is the case then there is no mysterious pool of fund to pay for the interest when there is a default. If there's a default all funds from PPT bonds will be lost and the interest will need to come from somewhere else. There's no trick. The snake cannot survive by eating its own tail.

Please, have a look at this spreadsheet: https://docs.google.com/spreadsheet/ccc?key=0AjniD04O6MJndE9vX2MwSDdHTnZVVWdNLTRQRldyWUE

In the blue cells there is the actual data from the auctions. The content of purple cells is just my wild guess (it could as well have been played differently), but it gives an idea of how the business can eventually become 100% risk free, which happens at the price of receiving lower interest from the initial capital for the first 10 weeks while still exposing it at BS&T default. But please also note that the PPT.DIV shares were given to the PPT holders during week 5 and their market price ever since then hasn't been negligible.

So you are saying after weeks of operation, the people behind PPT could have made enough coins to now cover the insurance. How is that risk free? They are still using the profit they made to cover the insurance. Also you aren't taking opportunity cost into consideration when calculating their profit.

You go from calling people liars to a hand wavy explanation about how you think it's possible that it's 100% risk free. I guess you will never admit you are wrong since there's always a way that you haven't figured out yet.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 11, 2012, 04:23:17 AM
Your chart shows that you're using insurers initial investment to pay out 1310 on week 4 to pay them back and on week 5 for the investment that was never deposited for PPT.A on week 1.
You are right.
Sorry - my bad.
Thanks for picking that up.

But since the insurance exposes the investor to the risk for 4 times longer period, while insuring only 25% of his output capital, I believe there must be an algorithm to eventually make it 100% risk-free for the business owner. And I will figure it out... But now I just need to honestly admit that I haven't actually figured it out yet. And apologize you for doubting in what you were saying.

piotr_n, I think you are wrong here. The insurance is not an illusion. You really don't need to create a chart to understand. Just remember that you can't have your cake and eat it too. Either the funds are with pirate earning interest or they are sitting there waiting for a default. They can't be doing both at the same time. Each PPT bond is held for 4 weeks. So the funds need to be with Pirate to earn 4 weeks of interest. If that is the case then there is no mysterious pool of fund to pay for the interest when there is a default. If there's a default all funds from PPT bonds will be lost and the interest will need to come from somewhere else. There's no trick. The snake cannot survive by eating its own tail.

Please, have a look at this spreadsheet: https://docs.google.com/spreadsheet/ccc?key=0AjniD04O6MJndE9vX2MwSDdHTnZVVWdNLTRQRldyWUE

In the blue cells there is the actual data from the auctions. The content of purple cells is just my wild guess (it could as well have been played differently), but it gives an idea of how the business can eventually become 100% risk free, which happens at the price of receiving lower interest from the initial capital for the first 10 weeks while still exposing it at BS&T default. But please also note that the PPT.DIV shares were given to the PPT holders during week 5 and their market price ever since then hasn't been negligible.
donator
Activity: 1654
Merit: 1351
Creator of Litecoin. Cryptocurrency enthusiast.
July 11, 2012, 12:25:46 AM
Your chart shows that you're using insurers initial investment to pay out 1310 on week 4 to pay them back and on week 5 for the investment that was never deposited for PPT.A on week 1.
You are right.
Sorry - my bad.
Thanks for picking that up.

But since the insurance exposes the investor to the risk for 4 times longer period, while insuring only 25% of his output capital, I believe there must be an algorithm to eventually make it 100% risk-free for the business owner. And I will figure it out... But now I just need to honestly admit that I haven't actually figured it out yet. And apologize you for doubting in what you were saying.

piotr_n, I think you are wrong here. The insurance is not an illusion. You really don't need to create a chart to understand. Just remember that you can't have your cake and eat it too. Either the funds are with pirate earning interest or they are sitting there waiting for a default. They can't be doing both at the same time. Each PPT bond is held for 4 weeks. So the funds need to be with Pirate to earn 4 weeks of interest. If that is the case then there is no mysterious pool of fund to pay for the interest when there is a default. If there's a default all funds from PPT bonds will be lost and the interest will need to come from somewhere else. There's no trick. The snake cannot survive by eating its own tail.
hero member
Activity: 518
Merit: 500
July 09, 2012, 03:22:40 PM
While not a good result for anyone, a BS&T default pays the same to bond holders irrespective of how far through the cycle they are.

If you buy on day one and the default is on day two, you get 0.32.
If you buy on day one and the default is on day twenty-seven, you get 0.32.

It might depend on if you are looking at default probability on a daily weekly or monthly cycle.  On the flip side, if you don't think Pirate is going to sail away with your funds, there are other products/options.  PPT.x bonds is just one in a range.
hero member
Activity: 745
Merit: 501
July 09, 2012, 02:50:46 PM
Aye, no problem.

I actually don't see how that's possible. If they insure 25% for 4 weeks rolling (1000 on 4000 for example), they need to keep their funds in the insurance for it to stay insured. Being kept aside, they can't earn any interest on it. That the period is 1 week or 1 year, there's a risk of a default happening ONCE. If that happen, you need to have that 25% kept aside and cannot earn interest on it so it pays itself back since it must be kept aside.

And they can't earn it back by borrowing on other investments because it goes back to the initial problem of actual investment not earning dividends for themselves.

Thus I can't see any scheme possibly allowing this. Keeping compounded interests for 3% weekly and selling over 1.04 each is the only way I can see them making more than 0.07 or 7% weekly on their initial insurance they risk.

If you find a working way to do it, it'd be quite curious to see that.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 09, 2012, 02:32:50 PM
Your chart shows that you're using insurers initial investment to pay out 1310 on week 4 to pay them back and on week 5 for the investment that was never deposited for PPT.A on week 1.
You are right.
Sorry - my bad.
Thanks for picking that up.

But since the insurance exposes the investor to the risk for 4 times longer period, while insuring only 25% of his output capital, I believe there must be an algorithm to eventually make it 100% risk-free for the business owner. And I will figure it out... But now I just need to honestly admit that I haven't actually figured it out yet. And apologize you for doubting in what you were saying.
hero member
Activity: 745
Merit: 501
July 09, 2012, 02:20:53 PM
Your chart shows that you're using insurers initial investment to pay out 1310 on week 4 to pay them back and on week 5 for the investment that was never deposited for PPT.A on week 1. The problem was that this initial investment was used twice and made your initial chart have a 4000 balance. By agreeing that only 3000 would actually be kept, you also have to agree that you cannot pay week 5 for divs since week 1 since the insurers fund which were there since week 1 was ALREADY used to pay them back on week 4.

The 1000 initial investment can't earn the dividends twice for paying back the insurer AND for PPT.A at the same time.
hero member
Activity: 745
Merit: 501
July 09, 2012, 01:12:51 PM

So, if it wasn't possible for the 3000 BTC deposit to handle all the payments, then how is it possible that it is possible on the chart? Smiley
Or the other way around: if it is possible on the chart, why it must not be possible in the reality?

Because there's 3000 in the account. PPT.A doesn't get in at week 1 to get out at week 5, it gets in at week 1 and gets out at week 4 after 3 week.

Week 0
PPT insurers - 1000

Week 1
PPT insurers - 1000

Week 2
PPT insurers - 1000
PPT.B - 1000

Week 3
PPT insurers - 1000
PPT.B - 1000
PPT.C - 1000
Total 3000

Week 4
PPT insurers - 0 (Retrieved on your chart to pay out insurers after 4 weeks only this amount stays 4 weeks)
PPT.B - 1000
PPT.C - 1000
PPT.D - 1000 (Buying in.)
Total 3000

Week 5
PPT.B - 0 (Payout to A from B's investment after 3 week)
PPT.C - 1000
PPT.D - 1000
PPT.E - 1000 (Buying in.)
Total 3000

Week 5
PPT.C - 0 (Payout to B from C's investment after 3 week)
PPT.D - 1000
PPT.E - 1000
Total 3000

Week 6
PPT.D - 0 (Payout to C from D's investment after 3 week)
PPT.E - 1000
PPT.A - 1000
Total 3000

etc. etc. etc.

With 3000 you can roll through the 1000 investments slices every three weeks only, accumulating less dividends.

You never deposited a 1000 bitcoins investment on week 1 for A and remove PPT insurers investment from week 0 on week 4. You don't have a slice on week 5 that has been earning since week one. You're taking out week's 2 investment for PPT.B after 3 weeks only.

Are you saying that with 3000 in the BS&T at any time and Pirate paying 7% of your balance per week, pirate will pay more than 210 weekly?

And that your charts shows you removing a net 310 weekly. More than the dividends?

Pirate pays on the balance and 7% of 3000 doesn't cover the net 310 you withdraw each week on the balance. To widthraw 310 weekly, you must have the 4439.9 balance shown on my chart which doesn't take 1000 away to reimburse PPT.Div insurers.
newbie
Activity: 46
Merit: 0
July 09, 2012, 10:08:25 AM
0) I also designed the system with one other design constraint:  minimize the amount of weekly cash flow in and out of our BS&T account. -- On the third point we have only a very small, usually less than 100 BTC flow in or out of our BS&T account every week.
I was just about to ask how you finance that 2 hour gap from 12 AM UTC to 2 AM UTC, but then I read about this:

1) We issued shares of PPT to the six backers of the PPT.x zero coupon bond system in order to raise exactly 3840 BTC of working capital.  As stated in our contract this entire amount is available to be paid out to our customers in the case of a default.  Maybe not calling this capital an insurance fund will satisfy piotr_n (?)  Ok, I will call it the working capital of PPT.  It is kept separate and is not on deposit at BS&T so we would not lose it in the case of a default by pirateat40.
Holy shit! Shocked To an investor it makes a hell of a difference whether it's an "insurance fund" ie. completely separate fund from the daily operations OR just a "working capital" which you can use to finance that 2 hour (or last time much longer) gap! This practically means that if Pirate defaults during that 2 hour window you're happily using our "insurance fund" as your "working capital", there is no insurance at all - all BTCs gone! So please clarify this to your investors and tell us you're not using BTCs from the insurance fund to "minimize the amount of weekly cash flow in and out of our BS&T account." And if so, how you're doing it (with whose BTC)?

Once this uncertainty is resolved we plan to reduce or eliminate this mandatory "premium surcharge".
Well this is some good news.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 09, 2012, 08:07:33 AM
To tell you all the truth I have not read anything that piotr_n has written for a long time but in order to hopefully eventually stop all this unneeded posting about what you think we may or may not do I will tell you exactly what we actually do:

[...]  
Oh, that definitely cleared up all the doubts. Good job, man! Smiley

Never read anything people say - this way you can abstract from all the arguments, while keeping to clarify things that nobody wonders about, which will make your fake insurance business even more honest Smiley
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 09, 2012, 07:39:52 AM
Sorry I said I was giving up because I was well aware that I'm unable to teach a color-blind to distinguish colors.
But I will try one more hopeless time, since you are probably waiting for my reply.

Just have a look at the chart again.
  • PPT.A get into the system at week 1 and gets out of it at week 5
  • PPT.B get into the system at week 2 and gets out of it at week 6
  • PPT.C get into the system at week 3 and gets out of it at week 7
  • PPT.D get into the system at week 4 and gets out of it at week 8
  • PPT.E get into the system at week 5 and gets out of it at week 9
  • PPT.A get into the system at week 6 and gets out of it at week 10
  • and so on...

So, if it wasn't possible for the 3000 BTC deposit to handle all the payments, then how is it possible that it is possible on the chart? Smiley
Or the other way around: if it is possible on the chart, why it must not be possible in the reality?

Code:
Week no | Depositor of 1000 BTC | Insurance Fund | BTC in BS&T | Withdraw from BS&T for 1000 BTC deposited 4 weeks ago
=============================================================================================================================
0       | PPT shareholders      | 0 BTC          | 1000 BTC    | -
1       | Buyers of PPT.A       | 1000 BTC       | 1000 BTC    | -
2       | Buyers of PPT.B       | 1000 BTC       | 2000 BTC    | -
3       | Buyers of PPT.C       | 1000 BTC       | 3000 BTC    | -
4       | Buyers of PPT.D       | 1280 BTC       | 3000 BTC    | 280 BTC to the Fund, initial 1000 + new 30 BTC back to PPT shareholders
5       | Buyers of PPT.E       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.A, 30 BTC to PPT shareholders
6       | Buyers of PPT.A       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.B, 30 BTC to PPT shareholders
7       | Buyers of PPT.B       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.C, 30 BTC to PPT shareholders
8       | Buyers of PPT.C       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.D, 30 BTC to PPT shareholders
9       | Buyers of PPT.D       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.E, 30 BTC to PPT shareholders
10      | Buyers of PPT.E       | 1280 BTC       | 3000 BTC    | 1280 BTC to buy back PPT.A, 30 BTC to PPT shareholders
hero member
Activity: 745
Merit: 501
July 09, 2012, 06:27:18 AM
I could have made it much simpler...

You have 3000 BTC in BS&T which pirate pays 7% on weekly. Pirate adds 210 BTC weekly to your BS&T account.
You withdraw 1310 to pay back + interest while adding back 1000 from new bond sold each week. You widthdraw a net 310 BTC weekly from your BS&T account.

Net result: Your BS&T account loses money each week.

You have 4 PPT.Div simulteanously earning 7% weekly (28% total weekly) on 1000 BTC, you need 4 simulteanous 1000 BTC deposits in BS&T to earn 7% on each of those. With only 3000, you earn 3 x 7% of 1000 or 21% weekly. A huge difference.

Your chart removes the investment from BS&T after 3 week instead of 4. You need 4000 for the 4 weeks rotation.
hero member
Activity: 745
Merit: 501
July 09, 2012, 06:00:52 AM
You are just looking at this from a wrong perspective, thus the illusion you experience.

Your approach of "x 4 weeks monthly" is putting your view at the misleading angle.

There are 4 separate investments, 1000 each, and you never pay all of them at the same time, but only one per week.
That is why you don't need to have 4000 in BS&T

4 investments, 1000 each, but there's 3000 earning interest.

Updated your table starting at week 1 with actual interests put in. Starting from week 4, you remove that 1310 BTC for 1000 in, making it a minus 310 BTC in BS&T.
|PPT.A|PPT.B|PPT.C|PPT.D|PPT.E|Total theorical PPT.Div funds earning interest|BS&T actual funds|Fund
Week 0|0|0|0|0|0|0|1000|0
Week 1|1000|0|0|0|0|1000|1070(7%)|1000
Week 2|1070|1000|0|0|0|2070|2144.9(7%+1000)|1000
Week 3|1144.9|1070|1000|0|0|3214.9|3295.04(7%+1000)|1000
Week 4|1225.0|1144.9|1070|1000|0|4439.9|3214.89(7%-310.8)|1280
Week 5|0 (-1310.8)|1225.0|1144.9|1070|1000|4439.9|3129.13 (7%-310.8)|1280
Week 6|1000|0 (-1310.8)|1225.0|1144.9|1070|4439.9|3037.37 (7%-310.8)|1280
Week 7|1070|1000|0 (-1310.8)|1225.0|1144.9|4439.9|2939.19 (7%-310.8)|1280
Week 9|1144.9|1070|1000|0 (-1310.8)|1225.0|4439.9|2834.13(7%-310.8)|1280

Oh how weird, the capital in BS&T lowers instead of staying stable? That's because there's 7% interest on 3000 BTC (210 BTC) you have to spread on 4 x 1000 investments maturing simulteanously. Which mean you need to allocate that 210 BTC you get weekly among 4 PPT.DIV, which equals to 52.5 BTC for each. Which equals 5.25% weekly interest!

Thus why you need the 4000 BTC invested in BS&T at all time for the interests in your chart to work.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 09, 2012, 05:14:29 AM
You are just looking at this from a wrong perspective, thus the illusion you experience.

Your approach of "x 4 weeks monthly" is putting your view at the misleading angle.

There are 4 separate investments, 1000 each, and you never pay all of them at the same time, but only one per week.
That is why you don't need to have 4000 in BS&T - you only need to have as much as needed for the next week's payment...
And as you see at the chart, which you helped me to correct, 3000 is enough to perpetually handle all the weekly payments
hero member
Activity: 745
Merit: 501
July 09, 2012, 05:05:11 AM
Then they earn less in interest then what they pay out.

With 3000 in BS&T and the 1000 deposit with 1000+interest weekly withdrawal, the initial funds for in investment in PPT.A would come out 3 weeks later instead of 4 weeks, earning you only 3/4th of the actual 310 you'd normally get.

3000 in BS&T x 31% monthly compounded interest = 930 MONTHLY INTEREST

310 interest weekly retrieved x 4 weeks monthly = 1240 MONTHLY PAID OUT

You receive 3/4 x 310 = 232.5 would be the weekly interest you get because you have 3/4th of the funds in BS&T.

232.5 x 4 weeks = 930 monthly

To be able to retrieve 310 interest weekly instead of in 4 weeks, you need to have the equivalent of 4 weeks of funds (a full 4000) at all time in BS&T.

Seems there was some confusion just there.
legendary
Activity: 2053
Merit: 1356
aka tonikt
July 09, 2012, 04:54:27 AM
The chart is wrong for the interest part! You're retrieving 310 x 4 monthly = 1240 interest when 31% x 3000 in BS&T earns you 930 monthly.

You're receiving 1310 per month back on 1000 every four week, yes!

But that 3000 BTC fully rotates every 3 weeks instead of 4!

You can't earn the full interest for 1000 with 4 actives (interest on a full 4000) while having 3000 in BS&T
OK - I give up with you, but just for the record: you are wrong.

"The interest part" - that's a part of the illusion they are selling. Smiley
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