What is so difficult to understand here?
Your borrowers whatever they say to you could simply funnel borrowed money to a ponzi scheme. You do not need to know about it, and your borrowers would not tell you. Once the master ponzi implodes they default on your loans. Do defaults concern you?
More importantly, the higher your interest rates the less chances that they funnel it to anything else but a ponzi scheme.
BTC rises, your borrowers who converted BTC into USD are unable to pay off your loans they default. This does not concerns you too apparently.
And note that I am not really talking about specifically your borrowers and your business, more about the whole BTC lending marketplace.
Topic: A day in the life of a pirate. - page 8. (Read 31790 times)
What's MMM? Don't know, don't care.
I have most funds/loans related to physical goods and services, and the volatility in the market (even last year) was prosaic. The business being established independent of gambling/ponzi/random chance.
Is it so hard to understand if you want to go down the BTC route, you don't care about volatility because there is none - it is always 1 BTC to 1 bitcoin. How much do you take notice of EUR/GBP/JPY/UDS volatility? I tend to worry about that a little more, and that's why I track cross rates every day - but normally ignore BTC/USD rates.
I have most funds/loans related to physical goods and services, and the volatility in the market (even last year) was prosaic. The business being established independent of gambling/ponzi/random chance.
Is it so hard to understand if you want to go down the BTC route, you don't care about volatility because there is none - it is always 1 BTC to 1 bitcoin. How much do you take notice of EUR/GBP/JPY/UDS volatility? I tend to worry about that a little more, and that's why I track cross rates every day - but normally ignore BTC/USD rates.
I am in complete agreement with both of you too. With one caveat: past performance does not guarantee future results
Let's just wait and see how this market will react on demise of MMM and on BTC volatility, specifically on upside.
Let's just wait and see how this market will react on demise of MMM and on BTC volatility, specifically on upside.
Well, looking at current interest rates, it would seem some of this is priced in. A month is a long time in BTC land. Not that long ago we were having 20% moves in a single day
As for your MMM theories, put you coin where you mouth is -> http://betsofbitco.in/item?id=349
I'm a lazy starfish, and I know where my talents are. And while I know of ways to use bitcoin to make higher returns, that's simply not my best field of operation. I'll stick to 200% to 300% per year.
I am in complete agreeement with Patrick. The bitcoin lending scene is highly profitable.
I am in complete agreement with both of you too. With one caveat: past performance does not guarantee future results
Let's just wait and see how this market will react on demise of MMM and on BTC volatility, specifically on upside.
I'm curious who takes on BTC debt? Obviously Pirate does, but who else, and for what purposes?
Mostly miners who have incomes denominated in bitcoin.
And any BTC business, surely. Taking a debt in BTC would make sense to anybody who expects a predictable return on BTC...
I'm curious who takes on BTC debt? Obviously Pirate does, but who else, and for what purposes?
Mostly miners who have incomes denominated in bitcoin.
I'm curious who takes on BTC debt? Obviously Pirate does, but who else, and for what purposes?
I'm a lazy starfish, and I know where my talents are. And while I know of ways to use bitcoin to make higher returns, that's simply not my best field of operation. I'll stick to 200% to 300% per year.
I am in complete agreeement with Patrick. The bitcoin lending scene is highly profitable.
I'm a lazy starfish, and I know where my talents are. And while I know of ways to use bitcoin to make higher returns, that's simply not my best field of operation. I'll stick to 200% to 300% per year.
P.S. Or is it by any chance you just have no idea how to calculate compound interest?
Even without compound interest, 7% a week is ~360% a year.
All the proof we need.
P.S. Or is it by any chance you just have no idea how to calculate compound interest?
Even without compound interest, 7% a week is ~360% a year.
Nevertheless, I personally know of at least a half-dozen ways to make the kind of returns Pirate does, and they're relatively simple too (I'm busy and lazy), and I only spent about a week or two thinking about it (surfing the net helps).
If I had even one idea that can make 3.6x times my capital in a year, I sure as hell won't be too lazy to explore it. Let alone 33x if you consider compounding interest.
Oh, and by the way - this should work with tens of thousands of BTC over months consistently, not a single transaction/deal once in a while that is especially profitable...
My thought exactly.
I personally know of at least a half-dozen ways to make the kind of returns Pirate does, and they're relatively simple too (I'm busy and lazy), and I only spent about a week or two thinking about it (surfing the net helps).
Oh really? You do know how to make 6000% annual return! Cool beans! I bet you then could get Warren Buffet out of biz by the end of 2013 (if only you were not that lazy, of course).
I wish I was half that smart.
P.S. Or is it by any chance you just have no idea how to calculate compound interest?
Let's assume a few things here:
1) It's not a ponzi (or a proxy to a ponzi). The definition of which is a little tenuous since if you say you're running a ponzi, and you notify all of your "investors" that that's what you're doing, then are you actually a ponzi? If the government says it's a ponzi, then it must be a ponzi . Don't believe everything you hear, just follow the money or the deal.
At the moment we know little of Pirate's business plan, and if we knew more, and there were more competitors, then the interest rates would likely drop and likely without an additional decrease in risk exposure. That being the case, I'd just as soon he keep the secret. In fact, even if Pirate were to tell me right now, not only would I keep the secret, I probably wouldn't even try to compete with him, since I value my time differently than he does (or anybody else for that matter). It would have to be really really simple to get my attention and deal with all of the FUD that's spewed around here.
2) It's not drugs (or a proxy to drugs). I assume that would be both the legal and illegal kind. However, if it includes the "illegal" kind, that's just a matter of jurisdictional geography and you're legal again. Now I'm just rambling on, but whatever.
3) It's not insider currency exchange knowledge (or a proxy to insiders). Given the lack of transparency of the exchanges due to the psuedo-anonymous nature of bitcoin and the current lack of much regulation, this is possible. I'm sure others could address this issue better than I, so I'll leave it to them to work the numbers. Notwithstanding, I could really care less (nobody forced you to trade USD/BTC). Besides, if our benevolent Pirate "manipulator" can maintain some degree of stability (which we've had a little more of lately; correlation perhaps?), and make some money on the side, then more power to him. I value stability more than speculation anyway. Given his price-spike comment, so does he.
And even if stability isn't the desired side effect, and controlled volatility is (or some kind of bid-ask sniping, arbitrage, or algorithmic HFTs), then speculators can continue day-trading the market by predicting trends. Either way, most exchanges don't promise transparency anyway (maybe none?). If that's what you want, then make a better exchange (perhaps an OSS exchange) and convince people to join you. That way you could get transparency and decentralization in one fell swoop, yayyy!! Whatever floats yer boat I guess.
Now that I've got all that out of the way, that narrows the playing field significantly. Nevertheless, I personally know of at least a half-dozen ways to make the kind of returns Pirate does, and they're relatively simple too (I'm busy and lazy), and I only spent about a week or two thinking about it (surfing the net helps). I however will not enumerate nor describe them here, since by divulging, it would likely make it more difficult for me to try them myself should I be so inclined. In any case, I'm sure if any of you had half a brain (an imagination helps), you could probably come up with a similar subset, and then some, given the nature of the financial "black box" Pirate operates within.
The only unknown I can't put a finger on is why use bitcoin when for the most part you can use fiat? To that, I can only venture to guess that bitcoin transactions are nearly frictionless (borderless) in the sense that there is less regulation, more anonymity, fewer adjudicated encumbrances leading to cheaper insurance costs -lowering operational overhead-, limited or advantaged market "commodity/currency" exposure, diminished creditor recourse (both good and bad), and perhaps a great disdain for government largesse and general interference. Besides, promoting bitcoin isn't such a bad idea anyway, right? That being the case, and a little bit of altruism (karma whore?), it's not impossible to imagine why Pirate might part with as much bitcoin as he does when he could likely keep more of it to himself. Be glad you're on the money train, and if you're not, stop the hating/FUDding/whining, or use pass-thrus. We're all "adults" here right?
All you should be concerned about is the "promise" and any nuanced contractual details.
On a side note: thanks Pirate for your patience and professionality. Seemingly a rare trait around here.
1) It's not a ponzi (or a proxy to a ponzi). The definition of which is a little tenuous since if you say you're running a ponzi, and you notify all of your "investors" that that's what you're doing, then are you actually a ponzi?
At the moment we know little of Pirate's business plan, and if we knew more, and there were more competitors, then the interest rates would likely drop and likely without an additional decrease in risk exposure. That being the case, I'd just as soon he keep the secret. In fact, even if Pirate were to tell me right now, not only would I keep the secret, I probably wouldn't even try to compete with him, since I value my time differently than he does (or anybody else for that matter). It would have to be really really simple to get my attention and deal with all of the FUD that's spewed around here.
2) It's not drugs (or a proxy to drugs). I assume that would be both the legal and illegal kind. However, if it includes the "illegal" kind, that's just a matter of jurisdictional geography and you're legal again. Now I'm just rambling on, but whatever.
3) It's not insider currency exchange knowledge (or a proxy to insiders). Given the lack of transparency of the exchanges due to the psuedo-anonymous nature of bitcoin and the current lack of much regulation, this is possible. I'm sure others could address this issue better than I, so I'll leave it to them to work the numbers. Notwithstanding, I could really care less (nobody forced you to trade USD/BTC). Besides, if our benevolent Pirate "manipulator" can maintain some degree of stability (which we've had a little more of lately; correlation perhaps?), and make some money on the side, then more power to him. I value stability more than speculation anyway. Given his price-spike comment, so does he.
And even if stability isn't the desired side effect, and controlled volatility is (or some kind of bid-ask sniping, arbitrage, or algorithmic HFTs), then speculators can continue day-trading the market by predicting trends. Either way, most exchanges don't promise transparency anyway (maybe none?). If that's what you want, then make a better exchange (perhaps an OSS exchange) and convince people to join you. That way you could get transparency and decentralization in one fell swoop, yayyy!! Whatever floats yer boat I guess.
Now that I've got all that out of the way, that narrows the playing field significantly. Nevertheless, I personally know of at least a half-dozen ways to make the kind of returns Pirate does, and they're relatively simple too (I'm busy and lazy), and I only spent about a week or two thinking about it (surfing the net helps). I however will not enumerate nor describe them here, since by divulging, it would likely make it more difficult for me to try them myself should I be so inclined. In any case, I'm sure if any of you had half a brain (an imagination helps), you could probably come up with a similar subset, and then some, given the nature of the financial "black box" Pirate operates within.
The only unknown I can't put a finger on is why use bitcoin when for the most part you can use fiat? To that, I can only venture to guess that bitcoin transactions are nearly frictionless (borderless) in the sense that there is less regulation, more anonymity, fewer adjudicated encumbrances leading to cheaper insurance costs -lowering operational overhead-, limited or advantaged market "commodity/currency" exposure, diminished creditor recourse (both good and bad), and perhaps a great disdain for government largesse and general interference. Besides, promoting bitcoin isn't such a bad idea anyway, right? That being the case, and a little bit of altruism (karma whore?), it's not impossible to imagine why Pirate might part with as much bitcoin as he does when he could likely keep more of it to himself. Be glad you're on the money train, and if you're not, stop the hating/FUDding/whining, or use pass-thrus. We're all "adults" here right?
All you should be concerned about is the "promise" and any nuanced contractual details.
On a side note: thanks Pirate for your patience and professionality. Seemingly a rare trait around here.
And the obvious purpose of him starting this thread was just to suck in more bag-holders until he's ready to cash out.
Not enough technical-security skills to steal bitcoins by hacking. But certainly good social engineering.
Not enough technical-security skills to steal bitcoins by hacking. But certainly good social engineering.
Occam's Razor: The simplest explanation to me is that he is running some kind of Bitcoin a payment processing service. He might be charging the merchant 1.5% per transaction (half of Visa/MC), and his service includes instant conversion to fiat. Based on the way he operates, he needs to hold large buffers of confrimed coins in order to accomplish this. He has no idea and doesnt care if if the price of Bitcoins is going up or down tomorrow or even over the next 6 blocks. To hedge for this uncertainty he borrows other people's Bitcoins at a weekly rate that pays for itself after the coins have churned through about 10 payments.
There are a couple more I can think of that does not involve scams.
There are a couple more I can think of that does not involve scams.
Oh, a bitcoin payment processing service with such huge volume but nobody has heard of it? LOL!
Occam's Razor: ponzi scam.
both have in common that it undermines decentralization either way 
how to mess with bitcoin if you are say, a bank consortium:
1. amass a large amount of coins (do it cheap by means of a ponzi scheme)
2. get control over a large amount of hashing power (pay more than average pool)
3. screw bitcoin
I am not saying pirate is doing this but I would not know the difference.
1. amass a large amount of coins (do it cheap by means of a ponzi scheme)
2. get control over a large amount of hashing power (pay more than average pool)
3. screw bitcoin
I am not saying pirate is doing this but I would not know the difference.
the exact opposite could also be true
how to massively support bitcoin if you are say, someone who uses bitcoin.
1. amass a large amount of coins because coins rock
2. get control over a large amount of hashing power to protect the network
3. yay bitcoin
I am not saying pirate is doing this but I would not know the difference.
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