Topic: A day in the life of a pirate. - page 5. (Read 31790 times)

One sec let me switch to my other identity to respond.

STOP talking with yourselves.

Ummmm no, that's call embezzling.

Awww see, now I have to hide from the forums for another week.  GRRRRRR

Don't be jealous you got discarded like yesterday's deuce.

I thought pimps don't have to pay?

LOL, if i wanted that.  I'd pay for it.

Or maybe you just like the feel of a nose placed firmly against your cheeks.

Reading posts like this makes me smile.  There're still smart people in this community and it's those people I've learned to surround myself with.

"Surround yourself with like-minded people who want to see you successful." - Robert Kiyosaki

I just discovered that beer actually has an aftertaste (afterscent?) when it goes out through the nose. Also, remember to turn your head away from the screen...

It's possible that the risk may be outside of the Bitcoin environment. Assuming small operations doesn't give enough perspective because small fry generally have an eye on growth, not preservation.

Since Pirate's business is geographically dependent, I'll outline one possible perspective. When looking to preserve wealth, there are a few options that high net worth entities have always been able to rely upon:

• Precious Metals (esp. Gold & Silver)
• Land & Real Estate
• Fine/Rare Artwork
• Gemstones

Not every HNW entity is at the high end of the spectrum, so ownership of any of the above might not be held in ideal locations, or liquidation may not be easy. Asset seizure or account freezing can be far more devastating to HNW entities than it might be for middle and lower class individuals. Risk of confiscation is a 100% loss consideration; without much to confiscate, the financial loss isn't as great. If there happens to be another form of wealth preservation that's even more difficult to attack than the above list, you can be certain that it will garner attention. Even a handful of Euro or USD millionaires could easily take a sizable stake without breaking a sweat, yet still look at their purchase as insurance.

Example:

Assume my net worth is USD$10,000,000 and I want to protect as much as I can. Keep in mind that nothing is truly free. With the absolute worst-case scenario of 100% loss due to some form of loss, theft, or destruction, I elect to protect 25% in total, so $2,500,000 is reserved.

All of the above are physical items that could be somehow taken. Astute HNW individuals often keep their eyes open for investments or ways of protecting their assets. Let's say I've been hearing about this 'Bitcoin' thing from another HNW associate. I observe for a while and learn what I can about the system. At the same time, I'm well aware of increasing threats from government that may seriously jeopardize the safety of my accumulated wealth. Not only would my savings be at risk, but also my livelihood. It would be folly to think that HNW persons are incapable of sensing when sentiment toward their social class is negative.

My decisions on wealth preservation lead me to conclude that equities are too risky given recent events, and the banking system is too dangerous for wealth storage. Not counting fees, I decide to allocate my security assets as so:

$1,000,000 is put into gold.
$500,000 is put into property.
$400,000 is put into art.
$400,000 is put into gemstones.
$200,000 is put into Bitcoin.

In the event that Bitcoin fails, I'm only out 2% of my net worth and less than 10% of my preservation fund. If it takes off, I could easily become a Bitcoin Billionaire. If it remains about where it is, no harm has been done and my wealth has been preserved.

How much would I be willing to pay for that protection? There are many who spend a good percentage of their net worth on security. I certainly don't want to cause any serious disturbances for whatever I'm putting my wealth into unless there's an impending threat and time is of the essence. If I have to pay 50-100% on top of the going rate to acquire an asset without drawing attention to myself, so be it. It's often a small price to pay for peace of mind.

Other cases can be made from a low net worth individual or business perspective, but they mostly fall under the trade-off in perceived risk between classes, not so much speculation or growth within a single asset class.

A Pecuniary Pirate's Path to Profit: use the little straw to sip from a big jug.

It boils down to finding a niche, and in retrospect people say: "Why didn't I think of that?"

Are you sure the exchanges reflect Bitcoin's real value? Do you have access to dark pools? Are there other assets less desirable or risky than Bitcoin... ?

The way Pirate has things structured, a sudden failure is much less likely than a gradual evaporation. Unless, as he said, the price appreciates sharply.


There may be defaults in extreme cases. Pirate may have to either keep a large reserve of BTC, halt/reduce interest payments, or acquire quietly by using USD from the other side of his business so as not to further displace price. That isn't to say 40-50% change is even enough to cause such stresses; the number may be 400-500% or more.

This is basically what we're seeing in traditional financial markets, only in the opposite direction. In the case of lenders, halting interest payments is a very powerful tool that actually indicates positive growth, whereas in traditionally mature markets it's indicative of negative potential.

Of course, the ride will end sometime; the interest rates will decline and competition will increase. However, until the 21mm unit asymptote is approached, there's still room for expansion.

The way I reckon, that view is a much more responsible one than most here are assuming. To put it as Jim Sinclair might say, the days of colonial style wealth extraction that only benefit those at the top are over.

Sure, the concentration of wealth from a successful venture might be extreme at the top, but it leads to impoverishment and resentment of those involved, whether directly or indirectly. A rising tide raises all ships, but wealth extraction holds many underwater.

Instead of hoarding his shiny Bitcoins and his proprietary venture a la Facebook, Pirate is granting access to a potentially risky investment. Doing so means that no other business doing the same can offer as high a rate of return without copying his profit-sharing model.

As for his risk, it is not so much that Bitcoin might fail, but that those whom he is obligated to might come after him with pitchforks, demanding blood. To lessen or eliminate the latter, he is sharing access to his operation - in the event of failure, he'll step down as Captain of the ship rather than be forced to walk the plank like Jamie Dimon.

In light of that, lead on, Captain Pirate!

I wonder if and how Bitinstant's cash deposits are affecting Pirate's operation.

I don't like those words.

For many people actually buying BTC is a huge pain in the ass. If you were only buying a couple hundred dollars worth of BTC it might be worth your time to just pay someone $40 extra to get you the BTC, especially if it also saves you a few bucks in exchange fees.

I think the latter most likely

Buying coins on MtGox requires you to be AML and follow the law and submit documents.

Trading BTC person to person requires none such things and it is understandable why the 20% premiums demanded by the seller. Especially if in high quantities.

BTC buyer hands over money to be laundered -> BTC seller gives "untainted" BTC -> BTC buyer then goes and gets his "clean" USD through exchange as BTC can't be traced etc.  

I don't think pirate is doing this BTW. Just my observations / possible explanation why somebody would be selling BTC at a high premium locally.

Did you find a fool, or someone using the coins for illicit means?

I've done just that, might only have been a few thousand dollars worth, but a 10-20% premium was still worth having.

I get that, but I can't figure out the massive market density around these people. Unless folks travel far and wide to meet them.

When you can't get privacy for free and yet you value it that much, why not pay a premium for it?