MMM-2011 is crumbling. Guess we shall soon see if that was the main source of income.
Bets of Bitcoin: Bitcoin Savings and Trust will default before the end of 2012.
So... what was wrong with this one? http://betsofbitco.in/item?id=349
Topic: Bitcoin Savings and Trust is probably a Ponzi Scheme: A Petition - page 2. (Read 25616 times)
June 11, 2012, 03:35:47 PM
Bets of Bitcoin: Bitcoin Savings and Trust will default before the end of 2012.
So... what was wrong with this one? http://betsofbitco.in/item?id=349
June 11, 2012, 03:29:48 PM
MMM-2011 is crumbling. Guess we shall soon see if that was the main source of income.
Bets of Bitcoin: Bitcoin Savings and Trust will default before the end of 2012.
June 11, 2012, 12:39:05 PM
http://news.yahoo.com/back-oblivion-russian-fraudster-pushes-scam-062530584.html
MMM-2011 is crumbling. Guess we shall soon see if that was the main source of income.
MMM-2011 is crumbling. Guess we shall soon see if that was the main source of income.
He's obligated to pay interest back in bitcoins, so difficulty/slowness of trading to USD doesn't factor towards his liabilities. I'm curious how you were able to track transactions, I'm guessing you're an investor so you were able to follow your own coins, but how can you differentiate a mtgox transaction from a non-mtgox transaction?
I could easily be wrong, its just my current working hypothesis.
-bgc
Even people shifting large numbers of coins have faced Gox problems, it is not a simple USD/BTC issue. Plus, if you believed BS&T was simply manipulating Gox, they would dominate the exchange with the number of coins that would need to be traded.
Might pay for people to re-read the BS&T thread, there is some interesting stuff in there, and you will find my posts from December when I opened my account. So, yes, I can trace my own coins, and also some others.
After consideration, I'm pretty sure Pirate is trading to take advantage of volatility in the market. If he can make the 'buy at x-0.10', 'sell at x +0.10' cycle (4% increase) a few times a week he easily hits his mark. It's the only legal approach that seems to fit the pattern. My guess is he has some code to help with his trading. His main risk would be a rise in bitcoin price while he's on the 'sell' side of the pattern, so he probably has a band above the sell band where he would buy back in and ride it until volatility returns.
Less likely - tracing the coins and transactions does not lead to an exchange like Gox (at least on my looking at the money flows). I concluded it doesn't hit the main trading pages months ago because it would show up quite quickly. Also, if you talk to people trying to extract a decent number of coins or dollars from Gox, you would find out how difficult that is - and why many people avoid it.
He's obligated to pay interest back in bitcoins, so difficulty/slowness of trading to USD doesn't factor towards his liabilities. I'm curious how you were able to track transactions, I'm guessing you're an investor so you were able to follow your own coins, but how can you differentiate a mtgox transaction from a non-mtgox transaction?
I could easily be wrong, its just my current working hypothesis.
-bgc
After consideration, I'm pretty sure Pirate is trading to take advantage of volatility in the market. If he can make the 'buy at x-0.10', 'sell at x +0.10' cycle (4% increase) a few times a week he easily hits his mark. It's the only legal approach that seems to fit the pattern. My guess is he has some code to help with his trading. His main risk would be a rise in bitcoin price while he's on the 'sell' side of the pattern, so he probably has a band above the sell band where he would buy back in and ride it until volatility returns.
Less likely - tracing the coins and transactions does not lead to an exchange like Gox (at least on my looking at the money flows). I concluded it doesn't hit the main trading pages months ago because it would show up quite quickly. Also, if you talk to people trying to extract a decent number of coins or dollars from Gox, you would find out how difficult that is - and why many people avoid it.
Normally when you say short sell, you are talking about selling at market price and buy back in the future hopefully at a lower price. He's not doing this. He's selling bitcoin at a higher than market price and try to buy the bitcoins back at a price around market price when he sold the bitcoins. And he hedges bitcoin price rising.
So in normal short selling, you only make money if prie goes down. In his case, he should make money either way if his hedging is done correctly.
I explained why this makes no sense -- he takes a 10% loss on the borrowing, takes extra risk in case the price of Bitcoins goes up, and gains no benefit by doing so because he could get the same protection on downside risk (without the unlimited upside risk) just by short selling. It's completely irrational.So in normal short selling, you only make money if prie goes down. In his case, he should make money either way if his hedging is done correctly.
You *are* essentially arguing that he's paying 10% to short, taking extra risk in the bargain, and losing 100% of the upside potential of an increase in the value of the coins he holds. That makes no sense.
After consideration, I'm pretty sure Pirate is trading to take advantage of volatility in the market. If he can make the 'buy at x-0.10', 'sell at x +0.10' cycle (4% increase) a few times a week he easily hits his mark. It's the only legal approach that seems to fit the pattern. My guess is he has some code to help with his trading. His main risk would be a rise in bitcoin price while he's on the 'sell' side of the pattern, so he probably has a band above the sell band where he would buy back in and ride it until volatility returns.
He's not shorting bitcoins. You should read this thread: https://bitcointalk.org/index.php?topic=82849.180
The thread says he's shorting Bitcoins.The thread says:
1) He borrows Bitcoins.
2) He sells them.
3) Later, he buys Bitcoins to pay back those he borrowed from.
That is basically the definition of shorting.
Quote
In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to that third party.
http://en.wikipedia.org/wiki/Short_%28finance%29Normally when you say short sell, you are talking about selling at market price and buy back in the future hopefully at a lower price. He's not doing this. He's selling bitcoin at a higher than market price and try to buy the bitcoins back at a price around market price when he sold the bitcoins. And he hedges bitcoin price rising.
So in normal short selling, you only make money if prie goes down. In his case, he should make money either way if his hedging is done correctly.
He's not shorting bitcoins. You should read this thread: https://bitcointalk.org/index.php?topic=82849.180
The thread says he's shorting Bitcoins.The thread says:
1) He borrows Bitcoins.
2) He sells them.
3) Later, he buys Bitcoins to pay back those he borrowed from.
That is basically the definition of shorting.
Quote
In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to that third party.
http://en.wikipedia.org/wiki/Short_%28finance%29 My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available. Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalksearch.org/topic/m.916286
Effectively, you're saying that it's a huge gamble that the price of Bitcoin will go way down. He wants to sell people's coins today and pay them back with coins tomorrow, when he expects that they'll be worth less. But that doesn't work for two reasons:1) It incurs huge, needless risk. If he's holding lots of investors' coins and the price of Bitcoin goes way up, all those profits belong to his investors, not him. If he holds 15,000 Bitcoins that have been invested and the price of Bitcoins doubles, he's much worse off. He now has to acquire Bitcoins to pay back withdrawals at twice the price. You don't hedge by holding an asset.
2) You don't need to pay 10%/month to short Bitcoins.
He's not shorting bitcoins. You should read this thread: https://bitcointalk.org/index.php?topic=82849.180
My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available. Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalksearch.org/topic/m.916286
Effectively, you're saying that it's a huge gamble that the price of Bitcoin will go way down. He wants to sell people's coins today and pay them back with coins tomorrow, when he expects that they'll be worth less. But that doesn't work for two reasons:1) It incurs huge, needless risk. If he's holding lots of investors' coins and the price of Bitcoin goes way up, all those profits belong to his investors, not him. If he holds 15,000 Bitcoins that have been invested and the price of Bitcoins doubles, he's much worse off. He now has to acquire Bitcoins to pay back withdrawals at twice the price. You don't hedge by holding an asset.
2) You don't need to pay 10%/month to short Bitcoins.
My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available.
So he can buy them beforehand. After all this time, if his business works only half as well as he claims, surely he has the capital required and then some. Yet for some reason he seems to need constantly more, not less.
Quote
Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalksearch.org/topic/m.916286
Sounds like a very expensive way to hedge against a BTC price collapse. Going short on bitcoinica would make far more sense. Not too mention he could just cash out his profits in $.
What stops him from buying coins on birges?
Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)
Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)
Thats the point.. why would he borrow at an insane interest rates if he has to buy coins at exchanges anyway. All that changes is that he has to buy even more.
My guess is having access to bitcoins instantly is important to his buyers, so he needs to have a large capital of bitcoins readily available. Here's my reasoning why he borrows instead of uses his own coins: https://bitcointalksearch.org/topic/m.916286
What stops him from buying coins on birges?
Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)
Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)
Thats the point.. why would he borrow at an insane interest rates if he has to buy coins at exchanges anyway. All that changes is that he has to buy even more.
Hey hey, he might just be selling coins, why not?
Because he pays people their interest in coins. So he must, on net, *acquire* coins. I have tried to imagine how such a system could work where he obtains his investment in coins and also pays out interest in coins. I couldn't do it. If you have an idea, please share.Well, he's said previously that he's selling coins locally to groups of buyers. So if you accept that, all he does is sell coins at a markup to people for cash, deposit that cash to mtgox, trade for btc, pay interest to depositors, and whatever is left is his profit.
Hey hey, he might just be selling coins, why not?
Because he pays people their interest in coins. So he must, on net, *acquire* coins. I have tried to imagine how such a system could work where he obtains his investment in coins and also pays out interest in coins. I couldn't do it. If you have an idea, please share.Daily volume of gox if 62kBTC,how much do you think he needs to buy daily?)
Hey hey, he might just be selling coins, why not?
Because he pays people their interest in coins. So he must, on net, *acquire* coins. I have tried to imagine how such a system could work where he obtains his investment in coins and also pays out interest in coins. I couldn't do it. If you have an idea, please share.
Hey hey, he might just be selling coins, why not?
And pls give a link to his post.
And pls give a link to his post.
Id like to point out that most backers of Pirate were claiming he was involved in money laundering and/or other (drug related) illegal activities. Pirate has recently categorically denied this. I wonder if those people are calling Pirate a liar or if they are now as clueless as the rest of us about his actual business model.
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