A Theory on what pirateat40 is doing

Raize

donator

Activity: 1419

Merit: 1015

Quote from: koin on September 18, 2012, 12:09:26 AM

confused here. they no longer needed pirate because they have their own and then you say they don't have their own. or Huh

If you take a look at nimda and dooglus's post here...
https://bitcointalksearch.org/topic/m.1063869

You'll basically see that we know that the 1Dky address was owned by Silk Road. So we know they have coin, but we also know where it is from. It is possible that they needed pirate's LOANED coin to further complicate the process of where money was coming from and going to. Now that he's no longer an agent in their affairs, they are simply spinning off from the 1Dky address back to their vendors. This means the vendors are now responsible for "cleaning" their withdrawn coin.

For a practical application, expect to see at least a handful of high-profile drug busts over the next couple months, maybe. Large withdrawals from addresses linked to 1Dky are going to be pretty clear evidence of having a Silk Road vendor account.

Piper67

legendary

Activity: 1106

Merit: 1001

Quote from: ArticMine on September 19, 2012, 12:31:45 PM

Quote

... The other reasons can not be disclosed.

These propriety "other reasons" are the really interesting part.

And when you think about it, the first reason seems shady as well. There are dozens of ways of making sure who's got paid and who hasn't which do not require the private information of users to be disseminated like that.

ArticMine

legendary

Activity: 2282

Merit: 1050

Monero Core Team

Quote

... The other reasons can not be disclosed.

These propriety "other reasons" are the really interesting part.

imsaguy

vip

Activity: 574

Merit: 500

Don't send me a pm unless you gpg encrypt it.

Quote from: JoelKatz on September 19, 2012, 02:24:46 AM

Quote from: jimbobway on September 17, 2012, 06:37:44 PM

Pirate asked the PPT operators for their books so he could pay people directly (I think.)

We have no idea why he asked for that information. I think the most likely scenario was that it was simply a stalling tactic. Since no payments were made even for PPT operators who complied, it's unlikely he ever intended to make payments.

Quote

Q: Why did you require PPT operators to submit their account holders information?
A: There’re a few reasons for doing this. The largest of which was to remove the PPT operators from the added risk of their users claiming
they were not paid once the main account was paid. The other reasons can not be disclosed.

http://pastebin.com/DVNsx7xz

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: jimbobway on September 17, 2012, 06:37:44 PM

Pirate asked the PPT operators for their books so he could pay people directly (I think.)

We have no idea why he asked for that information. I think the most likely scenario was that it was simply a stalling tactic. Since no payments were made even for PPT operators who complied, it's unlikely he ever intended to make payments.

Quote

So the PPT obligations could now be removed, and 100BTC to buy a PPT is now 200BTC (instead of the 300BTC.) Would this be to pirates advantage?

First, it wouldn't remove those obligations. Pirate's belief to the contrary, if he had one, is mistaken. And it wouldn't be to Pirate's advantage except in the unlikely scenario where you repays a PPT operator, the PPT operator fails to repay the depositor, and that depositor goes after Pirate.

If the PPT operator is honest, the funds are only doubled. The tripling is locked on the books of the PPT operator.

Say I deposit 100 BTC with a PPT operator. I get a 100PPT coupon. The PPT operator deposits the 100 with Pirate. He gets a 100Pirate coupon. Pirate now gets the 100 BTC and circulates it. I have a 100PPT coupon I can circulate. Pirate has 100 BTC he can circulate. But the 100Pirate 'coupon' cannot circulate as the PPT operator must hold it so that he can pay to me any funds he gets from Pirate. In order for my 100PPT coupon to exist, the PPT operator must hold a 100Pirate coupon, so that's locked. It works the same way with banks and dollars and it's why loans double money rather than tripling it.

smoothie

legendary

Activity: 2492

Merit: 1473

LEALANA Bitcoin Grim Reaper

Quote from: anu on September 18, 2012, 07:14:45 AM

Quote from: smoothie on September 18, 2012, 06:54:38 AM

Pirate is such a joke. His screen name should be PussyAt30.

That name would at least explain how so many guys stopped thinking and rushed at it.

ROFL!!!! That's actually a really funny though. bwahahahaha Cheesy

RyNinDaCleM

legendary

Activity: 2408

Merit: 1009

Legen -wait for it- dary

Quote from: anu on September 18, 2012, 07:14:45 AM

Quote from: smoothie on September 18, 2012, 06:54:38 AM

Pirate is such a joke. His screen name should be PussyAt30.

That name would at least explain how so many guys stopped thinking and rushed at it.

Hugulghuguh...Pussy...Doh!

anu

legendary

Activity: 1218

Merit: 1001

RepuX - Enterprise Blockchain Protocol

Quote from: smoothie on September 18, 2012, 06:54:38 AM

Pirate is such a joke. His screen name should be PussyAt30.

That name would at least explain how so many guys stopped thinking and rushed at it.

smoothie

legendary

Activity: 2492

Merit: 1473

LEALANA Bitcoin Grim Reaper

Quote from: Raize on September 17, 2012, 11:43:37 PM

I don't think he ran a straight up Ponzi, but in effect he though his "Forex skillz" were good enough to justify having only 1/5th of the S&T on hand. I also refuse to rule out money laundering for Silk Road. They needed large amounts of clean coin and they needed it for ~6 months. After they got it, they finally had a system in place to properly "clean" coin and no longer needed Pirate's service. This threw Pirate for a loop because he assumed they were going to mass-sell. When they didn't and he did, he realized he was holding large amounts of cash and the demand for Bitcoin was ever-increasing. The result, as the 1Dky address thread is proving, is that Silk Road's claim to have their own cleaning service is bunk now, we're on to their game and we'll be able to track which addresses are Silk Road deposit accounts in the future by watching which ones donate into the accounts that go into future 1Dky addresses.

Right pirate's "forex skillz" was to BUY HIGH AND SELL LOW.

Pirate is such a joke. His screen name should be PussyAt30.

anu

legendary

Activity: 1218

Merit: 1001

RepuX - Enterprise Blockchain Protocol

Quote from: smoothie on September 17, 2012, 06:58:33 PM

My theory (with more and more insurmountable evidence each passing minute):

Pirate was running a Ponzi scheme.

Initially everything went well early on. As it grew he couldn't not pay out every week 7% in order to safe face.

Na, investors re-invested all their earnings and the compounding interest exceeded BTC 21 Million. Grin

dooglus

legendary

Activity: 2940

Merit: 1330

Quote from: koin on September 18, 2012, 12:09:26 AM

s&t?

Savings and Trust?

koin

legendary

Activity: 873

Merit: 1000

Quote from: Raize on September 17, 2012, 11:43:37 PM

"Forex skillz" were good enough to justify having only 1/5th of the S&T

s&t?

Quote from: Raize on September 17, 2012, 11:43:37 PM

no longer needed Pirate's service.
[...]

Silk Road's claim to have their own cleaning service is bunk now, we're on to their game and we'll be able to track which addresses are Silk Road deposit accounts in the future by watching which ones donate into the accounts that go into future 1Dky addresses.

confused here. they no longer needed pirate because they have their own and then you say they don't have their own. or Huh

Raize

donator

Activity: 1419

Merit: 1015

I don't think he ran a straight up Ponzi, but in effect he though his "Forex skillz" were good enough to justify having only 1/5th of the S&T on hand. I also refuse to rule out money laundering for Silk Road. They needed large amounts of clean coin and they needed it for ~6 months. After they got it, they finally had a system in place to properly "clean" coin and no longer needed Pirate's service. This threw Pirate for a loop because he assumed they were going to mass-sell. When they didn't and he did, he realized he was holding large amounts of cash and the demand for Bitcoin was ever-increasing. The result, as the 1Dky address thread is proving, is that Silk Road's claim to have their own cleaning service is bunk now, we're on to their game and we'll be able to track which addresses are Silk Road deposit accounts in the future by watching which ones donate into the accounts that go into future 1Dky addresses.

smoothie

legendary

Activity: 2492

Merit: 1473

LEALANA Bitcoin Grim Reaper

My theory (with more and more insurmountable evidence each passing minute):

Pirate was running a Ponzi scheme.

Initially everything went well early on. As it grew he couldn't not pay out every week 7% in order to safe face.

Most of the paid out interest was the bulk of other investor funds.

This is where I believe users like GigaVPS could afford 4 BFL 1TH/s mini rigs paid with bitcoin back in June.

Is it that hard to believe that he ran a ponzi?

Cheesy

jimbobway

legendary

Activity: 1304

Merit: 1014

Quote from: JoelKatz on September 17, 2012, 05:05:54 PM

Quote from: jimbobway on September 17, 2012, 04:55:34 PM

If you do accounting outside of the blockchain, you can "counterfeit" bitcoins sort of like fractional reserve banking. But, if you perform a transaction through a bitcoin client and have it record on the blockchain, then is it really possible for pirate to do what you suggested?

Yes, absolutely. Pirate accounts were always outside the blockchain. PPTs were always outside the blockchain.

If I deposited 100 BTC with Pirate or used it to buy a PPT, that 100 BTC is still in circulation in the blockchain. In addition, there a 100 BTC Pirate debt and, if it was a PPT, a 100 BTC PPT obgliation. So if you use 100 BTC to buy a PPT, it becomes 300 BTC. (Assuming the PPT operator is honest, 100 BTC of that doesn't really count.)

Pirate asked the PPT operators for their books so he could pay people directly (I think.) So the PPT obligations could now be removed, and 100BTC to buy a PPT is now 200BTC (instead of the 300BTC.) Would this be to pirates advantage?

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: jimbobway on September 17, 2012, 04:55:34 PM

If you do accounting outside of the blockchain, you can "counterfeit" bitcoins sort of like fractional reserve banking. But, if you perform a transaction through a bitcoin client and have it record on the blockchain, then is it really possible for pirate to do what you suggested?

Yes, absolutely. Pirate accounts were always outside the blockchain. PPTs were always outside the blockchain.

If I deposited 100 BTC with Pirate or used it to buy a PPT, that 100 BTC is still in circulation in the blockchain. In addition, there a 100 BTC Pirate debt and, if it was a PPT, a 100 BTC PPT obgliation. So if you use 100 BTC to buy a PPT, it becomes 300 BTC. (Assuming the PPT operator is honest, 100 BTC of that doesn't really count.)

jimbobway

legendary

Activity: 1304

Merit: 1014

Quote from: JoelKatz on September 17, 2012, 03:08:19 PM

Quote from: DeathAndTaxes on August 26, 2012, 07:32:30 PM

Quote from: JoelKatz on August 26, 2012, 06:04:21 PM

It makes *no* sense for him to buy Pirate debt. It costs him money. How would he get that money back? From himself?

Well that isn't exactly true.

Person sells x BTC worth of ddebt.
Person creates uncertainty in the market and buys that debt back for y BTC.
Persons profits (x-y) BTC.

Not saying Pirate is doing that but there it isn't correct to say there is no sense in rebuying your own debt.

How is that better than this:

Pirate sells x BTC worth of direct debt.
Pirate profits x BTC.

Or this:

Before he defaults, Pirate buys x BTC of PPTs.
Pirate gets those x BTC back because they pass through.
Pirate defaults.
Pirate sells those x BTC of PPTs for y BTC.
Pirate profits y BTC.

Both of these scenarios are more profitable than yours and neither of these require Pirate to buy his own debt. Notice that they both require him to sell it.

If you do accounting outside of the blockchain, you can "counterfeit" bitcoins sort of like fractional reserve banking. But, if you perform a transaction through a bitcoin client and have it record on the blockchain, then is it really possible for pirate to do what you suggested?

JoelKatz

legendary

Activity: 1596

Merit: 1012

Democracy is vulnerable to a 51% attack.

Quote from: DeathAndTaxes on August 26, 2012, 07:32:30 PM

Quote from: JoelKatz on August 26, 2012, 06:04:21 PM

It makes *no* sense for him to buy Pirate debt. It costs him money. How would he get that money back? From himself?

Well that isn't exactly true.

Person sells x BTC worth of ddebt.
Person creates uncertainty in the market and buys that debt back for y BTC.
Persons profits (x-y) BTC.

Not saying Pirate is doing that but there it isn't correct to say there is no sense in rebuying your own debt.

How is that better than this:

Pirate sells x BTC worth of direct debt.
Pirate profits x BTC.

Or this:

Before he defaults, Pirate buys x BTC of PPTs.
Pirate gets those x BTC back because they pass through.
Pirate defaults.
Pirate sells those x BTC of PPTs for y BTC.
Pirate profits y BTC.

Both of these scenarios are more profitable than yours and neither of these require Pirate to buy his own debt. Notice that they both require him to sell it.

hazek

legendary

Activity: 1078

Merit: 1002

Quote from: Spekulatius on September 17, 2012, 02:51:48 PM

I think he is full of BS and will never pay back. Effect on price should be minimal till some serious amounts are payed back and verified.

+1

Spekulatius

legendary

Activity: 1022

Merit: 1000

I think he is full of BS and will never pay back. Effect on price should be minimal till some serious amounts are payed back and verified.

Topic: A Theory on what pirateat40 is doing (Read 39918 times)