This is all bullshit. Yes he can crash the value and take it out of the system. But that won't stop people using bitcoin or its value increasing again. Remember the Mt.Gox hack?
BB.
Topic: A Bitcoin Savings and Trust exit plan, incentivizing the destruction of Bitcoin (Read 5137 times)
August 03, 2012, 01:39:35 PM
August 03, 2012, 11:17:25 AM
August 03, 2012, 10:23:01 AM
I think one important aspect has been missed in this thread:
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
I reason that, given he is exiting through Option B, will sell rather slowly his vast amounts of BTC over the major exchanges. Maybe take 1 or 2 month, before he finally pulls the plug. This way his returns are much (4-6 times) higher as if he would just frantically crash the market by selling all his BTC at once and drawing all possible attention to him that way. I dont know how his mind works, but I pressume he is a rather clever fella and prefers a good result over a big BANG (but then again. he's a pirate after all, right?).
With Option A he would have to announce his closure within notice period, so we would at least see that indicator coming. A market crash thereafter makes no sense (except for the delightful panic to watch)
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
I reason that, given he is exiting through Option B, will sell rather slowly his vast amounts of BTC over the major exchanges. Maybe take 1 or 2 month, before he finally pulls the plug. This way his returns are much (4-6 times) higher as if he would just frantically crash the market by selling all his BTC at once and drawing all possible attention to him that way. I dont know how his mind works, but I pressume he is a rather clever fella and prefers a good result over a big BANG (but then again. he's a pirate after all, right?).
With Option A he would have to announce his closure within notice period, so we would at least see that indicator coming. A market crash thereafter makes no sense (except for the delightful panic to watch)
You seem to be assuming that the trades to liquidate BTC to USD would be on MtGox or another market. Why couldn't it be in #bitcoin-otc?
If I were wanting to cash out 250k BTC, I'd reach out to some of the high rollers in there. Arrange a meet in person, and walk away with FRNs or gold bullion.
Surely there are people out there that would be perfectly willing to accept "tainted" BTC at a discounted rate.
If I were Pirate, and I was running a Ponzi scheme (which I'm not saying is the case), I'd have my exit plan already in place. Build up the operating market until an agreed-upon point, then cash out through a contracted deal and walk away.
Why would he care if he gets $7.50 or even $4.00 for each BTC? They aren't his in the first place, and it would be wise to trade potential unrealized gains for a secure exit strategy.
July 23, 2012, 12:07:33 PM
I think one important aspect has been missed in this thread:
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
I reason that, given he is exiting through Option B, will sell rather slowly his vast amounts of BTC over the major exchanges. Maybe take 1 or 2 month, before he finally pulls the plug. This way his returns are much (4-6 times) higher as if he would just frantically crash the market by selling all his BTC at once and drawing all possible attention to him that way. I dont know how his mind works, but I pressume he is a rather clever fella and prefers a good result over a big BANG (but then again. he's a pirate after all, right?).
With Option A he would have to announce his closure within notice period, so we would at least see that indicator coming. A market crash thereafter makes no sense (except for the delightful panic to watch)
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
I reason that, given he is exiting through Option B, will sell rather slowly his vast amounts of BTC over the major exchanges. Maybe take 1 or 2 month, before he finally pulls the plug. This way his returns are much (4-6 times) higher as if he would just frantically crash the market by selling all his BTC at once and drawing all possible attention to him that way. I dont know how his mind works, but I pressume he is a rather clever fella and prefers a good result over a big BANG (but then again. he's a pirate after all, right?).
With Option A he would have to announce his closure within notice period, so we would at least see that indicator coming. A market crash thereafter makes no sense (except for the delightful panic to watch)
July 23, 2012, 11:44:29 AM
What happens in step 2 if the market doesn't fill your bid for 2.5M BTC @ USD$1, and bids at $5 start flooding the market? Finding people to sell you a huge number of BTC @ $1 might be difficult.
Well, you fail.
You need to finish selling the open orders of BTC down to your target price,
before the market react and successfully transfer the millions of dollars required to stop the fall into the exchange(s).
You can dump as much as you want in an instant, sell 500k BTC right now: MtGox freezes the orderbook, processes all trades till your sell is fully processed and then reopens order receival. Thats to say, no need to wait for anyone. Also, the depth you see in the orderbook is only the active funds, that want to be traded. There are much more sitting in the accounts already, waiting to be placed.
Quote
Surprise and confusion would be an advantage.
If taken by surprise, much of the market will obviously, reasonably join in and sell what they can while the price is "still above 8$, still above $7, still above $6, still above 5$".
This gives an advantage to the instigator of the crash, as he will (plausibly) get a higher average price for his sold coins, than if he were to do it alone.
If taken by surprise, much of the market will obviously, reasonably join in and sell what they can while the price is "still above 8$, still above $7, still above $6, still above 5$".
This gives an advantage to the instigator of the crash, as he will (plausibly) get a higher average price for his sold coins, than if he were to do it alone.
Sry, thats wrong. The opposite would happen.
July 23, 2012, 11:10:26 AM
What happens in step 2 if the market doesn't fill your bid for 2.5M BTC @ USD$1, and bids at $5 start flooding the market? Finding people to sell you a huge number of BTC @ $1 might be difficult.
Well, you fail.
You need to finish selling the open orders of BTC down to your target price,
before the market react and successfully transfer the millions of dollars required to stop the fall into the exchange(s).
Surprise and confusion would be an advantage.
If taken by surprise, much of the market will obviously, reasonably join in and sell what they can while the price is "still above 8$, still above $7, still above $6, still above 5$".
This gives an advantage to the instigator of the crash, as he will (plausibly) get a higher average price for his sold coins, than if he were to do it alone.
Also: You can still succeed, even if the sudden drops stops at 2.0$ or whatever... As long as you sell most at the top and less at the end.
July 23, 2012, 11:05:46 AM
What happens in step 2 if the market doesn't fill your bid for 2.5M BTC @ USD$1, and bids at $5 start flooding the market? Finding people to sell you a huge number of BTC @ $1 might be difficult.
I suspect that simple order dumping isn't enough. The most likely way for this plan to work would be if bitcoin was made illegal in a large market, like the states, with heavy enforcement threatened. (ideally with some high profile "we know you have bitcoins and will throw you in jail if you don't get rid of them" busts) The trick would be for the authorities to say that bitcoin is currently legal, (or at least will be tolerated) and will be made illegal sometime in the near future, thus encouraging large numbers of people to dump their bitcoins on the market. This would provide the Pirate the supply required to actually buy back all the coins he owes. It'd also look good from a PR point of view, allowing all those innocent investors a chance to get out of it without legal repercussions.
It'd work best if bitcoin is made illegal somewhere other than Japan, so that mtgox would continue to function during the sell-off.
Of course, even just making sure that in the future it will be very difficult to do anything with bitcoins is probably enough of a shock to make prices drop by a lot as it is. Saying you'll shutdown the major exchanges by a certain date would go a long way to achieving that kind of shock. It'd look like the moon cake receipt market as the holiday approaches.
July 23, 2012, 10:59:57 AM
What happens in step 2 if the market doesn't fill your bid for 2.5M BTC @ USD$1, and bids at $5 start flooding the market? Finding people to sell you a huge number of BTC @ $1 might be difficult.
July 23, 2012, 10:59:26 AM
Oh, I see what you're saying. He would have an incentive to sell enough coins to drive the value to almost zero by collapsing confidence in bitcoin permanently, such that he could walk away with the cash while still paying people back their worthless bitcoins.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
Exactly. Also don't forget that from the bitcoin communities point of view even if he doesn't succeed, the fact that he has the incentive to try is dangerous in of itself. He might think the plan is much more probable to succeed than we do. For instance going back to my hypothetical FinCEN insider example, it'd create dangerous incentives for such an insider to push hard to strict bitcoin regulation regardless of merit, and such an insider is likely to have a lot of faith in the power of market regulation.
July 23, 2012, 10:15:12 AM
Oh, I see what you're saying. He would have an incentive to sell enough coins to drive the value to almost zero by collapsing confidence in bitcoin permanently, such that he could walk away with the cash while still paying people back their worthless bitcoins.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
Something like this is certainly possible, if you're rich enough in BTC,
compared to the "real" depth of the orderbook down to your target price.
You don't need to drive the price to zero, or make it stay there for the scheme to work.
Extremely simplified hypothetical scenario with completely fictional numbers:
Assume that for some strange reason find yourself in possession of 500K BTC, 0 USD.
Assume that it takes 500K BTC to - however briefly - drive the price to 1 USD.
Step 1: You sell 500K BTC from 10 USD down to 1 USD/BTC.
Let's assume you manage to get an average price 5 USD/BTC, this nets you 2.5M USD,
Step 2: Immediately place a bid for 2.5M BTC at 1 USD/BTC.
Price rebounds from 1USD/BTC. You now possess 2.5 Million BTC, 0 USD.
Step 3: (Optional) Pay off Bitcoin denominated debt, if any.
And... you're done! Buy an island and retire.
July 23, 2012, 09:59:08 AM
color me queasy.
July 23, 2012, 09:17:01 AM
Lets suppose the speculation is true, and the Pirate has in fact been selling large amounts of coin. Ostensibly this is to stop bubbles, but another possibility is he's gradually converting a large amount of his bitcoin holdings into fiat. One he's done that he then has the incentive to crash the bitcoin market as his Bitcoin Savings and Trust obligations are denominated in Bitcoins. For instance, suppose he's a FinCEN insider and known's that repressive anti-bitcoin measures are about to be introduced. After the crash he simply has to buy back the coins at much-reduced rates, and he gets to keep the fiat left over as his profits.
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
He's selling borrowed BTC (while paying interest) on the market with the goal of buying them back lower. That's called 'shorting bitcoin', no?
July 23, 2012, 09:10:10 AM
Oh, I see what you're saying. He would have an incentive to sell enough coins to drive the value to almost zero by collapsing confidence in bitcoin permanently, such that he could walk away with the cash while still paying people back their worthless bitcoins.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
That's an interesting idea, but it seems like a longshot to actually succeed. You'd have to drive bitcoins really close to $0 for it to work, and they would have to stay at that value even as he buys several more times of bitcoins back to cover the loans.
This scheme is much more difficult to pull off than simply taking the money and running. I think you underestimate the probability of him getting away with it.
July 23, 2012, 12:49:16 AM
Lets suppose the speculation is ....
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
Please move this to speculation !
Destroy btc ? If pirate is making money one way or the other playing with bitcoin, Why would he kill it all ?
He's already invested into GPUMAX afaik, wouldn't he be sell it before ? ... Well whatever, I don't even know why people responded to this OP.
... a few more ignore on my list.
Who's to say GPUMAX is proving to be profitable? They're obviously trying to limit growth with the huge waitlist. The very concept of it - a quick way to buy hashing power with bitcoins - provides an end-run around the security model of bitcoin; useful for double-spend attacks for instance. The concessions by making it only possible to redirect GPUMAX hashing power to major pools are probably grudgingly provided, and would serve to severely limit the value of the service. For all we know GPUMAX is being subsidized right now so that the capability is in reserve.
Anyway, fundamentally the pirate is accumulating *bitcoins* one way or another by playing with bitcoin. He needs a way to lock-in those profits without legal risks to himself, either by staying totally anonymous, "getting away with it" legally speaking, or by someone actually developing those profits. My scenario provides an possible way to actually generate those profits, unique to a small market like bitcoin that actually does have the potential to be destroyed. If he manages to pull it off, it'd get rid of a lot of legal risk if someone manages to somehow unmask him.
When you get down to it, the Pirate is probably the guy with the biggest bitcoin-denominated debt, by far. A debt that could well be a good chunk of the bitcoin economy - observe the ludicrous recent forum post titled "Bitcoin Killer App: High Yield Investments". If a good chunk of the bitcoin economy may be these naive investors plowing money into scams, and when that bubble bursts the outcome will be ugly enough as it is.
Unfortunately with their bitcoin-denominated debts the people running these scams have an incentive to make sure that outcome is as ugly as possible.
July 22, 2012, 10:02:47 PM
When BTCST ends, he should just propose his new business project to his lenders and I'm pretty sure a good majority of them will still invest in Pirate project. Those who don't will be free to withdraw, and that's it. Pirate will be able to raise thousand of Bitcoins for a new venture without any efforts compared to the rest of us.
Old business model:
1. ...?
2. Profit!
New business model:
1. ...? (but different!)
2. Profit!
But you are right about what a great deal he has. I mean what young savvy entrepreneur--who has supposedly generated hundreds of thousands in profits for himself--could ever pass up the opportunity a raising funds for the low, low rate of, um, 3000% interest?
Stop drinking the Kool-aid, Brunic. I think it might not be good for your health.
If it's a scam, he's going to run for the hills, if it's not a scam, I doubt he is going anywhere, unless it involves legal repercussion.
July 22, 2012, 09:06:56 PM
When BTCST ends, he should just propose his new business project to his lenders and I'm pretty sure a good majority of them will still invest in Pirate project. Those who don't will be free to withdraw, and that's it. Pirate will be able to raise thousand of Bitcoins for a new venture without any efforts compared to the rest of us.
Old business model:
1. ...?
2. Profit!
New business model:
1. ...? (but different!)
2. Profit!
But you are right about what a great deal he has. I mean what young savvy entrepreneur--who has supposedly generated hundreds of thousands in profits for himself--could ever pass up the opportunity a raising funds for the low, low rate of, um, 3000% interest?
Stop drinking the Kool-aid, Brunic. I think it might not be good for your health.
July 22, 2012, 07:05:14 PM
If he is having actual profits, from either trading, or running a business... legal or otherwise. I think that the people with relatively deeper pockets are his clients, and not lenders.
If he was going to scam anyone, it would be them. But, it sounds like they aren't holding an account with them.
If his business is illegal, that means that if he is caught, the lenders could get in trouble, as well as the possibility of the funds being tied up.
If Pirate is infact running a shady operation, I would advise him to get a dead man's switch of some sort that would force withdraw all accounts to whatever % possible.
If he was going to scam anyone, it would be them. But, it sounds like they aren't holding an account with them.
If his business is illegal, that means that if he is caught, the lenders could get in trouble, as well as the possibility of the funds being tied up.
If Pirate is infact running a shady operation, I would advise him to get a dead man's switch of some sort that would force withdraw all accounts to whatever % possible.
July 22, 2012, 04:11:18 PM
I think one important aspect has been missed in this thread:
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
Will he leave with BTC or USD in his pockets??
Option A:
He's running a legitimate business. In this case, when he decides to quit, the first thing he has to do (in order to stay within legal boundaries) is to make sure to have enough BTC funds to pay back his lenders. He may have to buy on the market large amounts to fill potential voids. He then has to announce the end of operations of BS&T (does anybody know what notice period he has to adhere to?). Once all debts are paid off, he can either keep all his remaining BTC, USD or convert one into the other and walk away. We may see a substancial purchase of BTC in advance to his notice, which would be an indicator of his true blue intentions.
Option B:
He's running a ponzi or legitimate business but decides to scam everybody. In that case he will not give prior notice, try to vanish as quickly as possible, preferably before the whole swindle surfaces so he can pocket all the funds without paying anything back. The question now arises: Will he leave with BTC or with USD in his pockets?
1. If he is indeed running a ponzi scheme, the mayor part of his funds will be held in BTC through the influx of BTC from his lenders. To leave the country (because his identity is know) with only a huge amount of bitcoin in his wallet, that still has to go through some bank account to convert into USD is a rather flawed option (lets put any of the BTC for USD in mail services aside, because none of those would have sufficent USD cash reserves to pay out 250k BTC in mail envelopes). He would probably try to convert a significant amount of his BTC denominated funds to USD and withdraw that prior to his exit. The current MtGox withdrawal limits are limited to a maximum of 500k USD/month for trusted customers. He would have to give it at least 2 month time to prepare his exit to withdraw 1M USD and maybe some extra from other exchanges to have a reasonable pocket money for his livelong vacation on tropical island. We could in that regard see some 1M USD worth in BTC be sold on the major exchanges (and withdrawn).
2. If he is instead selling large amounts of BTC to an anonymous investor that uses pirate as surrogate, he could decide to pocket the USD from his big brother and default on his BTC debts, duping all his lenders as he walks away with about 2M USD in his pocket. That way the community would have no prior warning and no chance to trace pirate after he vanishes, except for international warrants (likely?). The BTC lent, will be still there, but through various laundering services probably well cleaned off their tracks.
So in conclusion; depending on the scheme he is running, one can only hope, that he is a good pirate at heart, because in both cases he could just sail away with all the money and leave nothing behind. But honestly, what pirate has ever been known for his kindheartedness?
July 21, 2012, 11:54:59 PM
Lets suppose the speculation is ....
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
tl;dr - The Pirate has a big incentive to destroy Bitcoin itself.
Please move this to speculation !
Destroy btc ? If pirate is making money one way or the other playing with bitcoin, Why would he kill it all ?
He's already invested into GPUMAX afaik, wouldn't he be sell it before ? ... Well whatever, I don't even know why people responded to this OP.
... a few more ignore on my list.
July 21, 2012, 11:51:41 PM
Pirate, pirate, pirate, pirate... omg. Who cares? Every sucker who invests in his trust should expect losing every penny at any moment. Investors are basically gambling against time, will they have time to accumulate enough from the interest before it all breaks down?
Pirate is insignificant PERIOD. I hope he sells bitcoins, that means cheaper bitcoins for everyone else. He has much less power than people think though. The market has other large players besides him and if the market decides we go up, his rumoured "dumps" will mean jack shit.
Pirate is insignificant PERIOD. I hope he sells bitcoins, that means cheaper bitcoins for everyone else. He has much less power than people think though. The market has other large players besides him and if the market decides we go up, his rumoured "dumps" will mean jack shit.
Who cares indeed? So why the inflammatory language?
Can we move on now?
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