Topic: Bryan Micon's List of BTC Ponzi Schemes that should not be listed as "Lending" - page 44. (Read 119665 times)

 

They'd better don't give a crap about my investments. Coz it is non of their damn biz. And anyway whatever I had to invest I've spent on lifetime supply of carrot muesli.

More Smoke ,More mirrors ASAP  

Relax, everyone with a brain here believes that pirate's op is a ponzi. It is just a bunch of shills is trying their best (which is not much) to convince new marks to part with money.

So ,a 20% rise in bitcoin prices is more dangerous to pirates operation than keeping investors in it at 3400% ?

some of you guys need to get new calculators


of course rising prices is bad since pirate  has to buy the coins he uses for interest payments every monday but would it not be a lot more simple to cut the INSANE  interest payments first and foremost ?

ok ,pirate has some other businesses ,but as someone noted on another thread ,the last business that payed these kind of returns was www.facebook.com

does anyone believe pirates secret  business is growing at a scale faster than facebook was /did  ?

These patronizing koans remind me of the Apocryphal Gospel of St. Thomas.

"The disciples said to miscreanity: Tell us what the business of Pirate is like. He said to them: It is like a grain of mustard-seed, smaller than all seeds; but when it falls on the earth which is tilled, it puts forth a great branch, and becomes shelter for the birds of heaven."

Note the distinction. Rising prices allow Pirate's operation to continue; sharply rising prices put the operation at risk. This is the same as saying that so long as Bitcoin keeps growing, everything is all well and good; if a bubble forms, he may have to halt interest payment or the business entirely.

Let's put it another way: a nuclear reactor is able to produce power so long as the reaction is under control. If the reaction accelerates to criticality, it has to be shut down or risk melting down.

One more analogy: a man-made reservoir can hold a certain amount of water, and the dam can handle a certain amount of flow. If there's more than the reservoir can contain and it's building up faster than the dam can allow through, the structure is in danger of being destabilized.

Still not working? Maybe a visual aid will help.



Water normally flows out of the sink through the drain at the bottom, but if the water is on full-blast and the drain isn't capable of getting rid of the flow fast enough, the sink could overflow. See that hole in the sink, just under the faucet? That's an extra outlet to allow excess flow to be drained in case the main drain isn't working properly or is overwhelmed. If the flow continues to be too fast for both primary and backup drains, you still get overflow.

Same thing with Pirate's operation.

Quoted for truth/hilarity.

Nope.  Perhaps Pirate's tapped into some of the largest miners for a supply of coins that would never appear in Gox volume?  Perhaps Pirate is mining (I'm not talking about gpumax)?

Velocity is increased, as can be seen by the gradual uptrend in Bitcoin days destroyed.


There are other components than just BTCS&T.


Not bury - point out the highly probable flaws in the Ponzi reasoning. There are certainly other operations that may be much more likely to be Ponzi-related. Deeper scrutiny into all of Pirate's operations suggests that it is legitimate.


See the first rebuttal, and the A day in the life of a pirate thread. In short, by paying out the majority of profits, there's no way any competition would be able to keep pace with Pirate unless adopting the same practice, which is unlikely to be able to achieve 7% returns with only one method of generating profit.

So paying interest of 3400% per year cant hurt Pirates operation ,but rising bitcoin prices could ............

Profit taking in USD != keeping all the principal in USD

To the miners.
Rhetorical question?

Cheers for having a go at my questions, but if you're right on this point then pirate is almost certainly insolvent given the recent price movements.

There are 50,400 BTC mined each week.  Where do they go?

Which is why Pirate said that a sudden price spike can hurt him.

Brunic, read first few sentenceses of your post and had to stop. Too much BS and I call it.

for example,


yea right. Have you seen USDBTC chart lately?

"To have a large volume. The more he have BTC, the more he can get profit. If he offered 2%/week, he would have strong competition around the forum and many people would invest elsewhere. He would be unable to accumulate the large inventory he have right now. At 7%, he's at the top of the world, he's the ultimate fund and cannot be touch. And like I said, pirate is not making profit in BTC, but in USD, that's important. The 3% profit he makes is in USD. Let's say pirate move 125 000 BTC every week. He makes 10% profit on it, that's 12 500 BTC. If he takes only 3%, he makes 3750 BTC. But since it's in USD, he can make around 37 500$ each week. He makes this money while being almost immune to BTC volatility.

I don't know the exact number, it's just to show how the little 3% that pirate can be really profitable. And like The Joint said before, I'm also sure at 99% of what pirate is doing. That 1% can go a long way, and I can't argue on it, since I don't know. I only hope it gives you another perspective of how pirate can make his money. "

youre either blindly defending pirate or you cant see the wood from the trees
hes taking 3% for himself  but repaying a compounding 7% for the priviledge of borrowed coins

also since the coin price is rapidly rising ,buying back the new 25% higher priced  coins is going to eat into his 3% rapidly

If you were trying to make 30000BTC in profit every week you'd need to be making trades on a regular basis, probably daily, of 100K+. If you timed the market really well you'd still need to be making trades in the region of 500-800K BTC per week, and nowhere has a player with that kind of volume (or even close to) right now.

A full decade before Madoff got shut down, an investigator worked out that to meet his stated profits doing the options trades he claimed to be doing, his trade volume would be much larger than the entire exchange volume in those markets, and yet nobody had any evidence of someone trading at anything like those levels anywhere.
It's very much the same argument here. I don't see how any of the major markets could provide enough arbitrage opportunities or any such thing to service liabilities like BTCST has at the interest rates they have.


I actually started a thread trying to work out the net exposure to BTCST - if others are "better informed" about the amounts in various accounts I'd love to get some figures:
https://bitcointalksearch.org/topic/how-large-is-btcst-exposure-98225

Looking at the PPTs on the forum and the GLBSE instruments alone, there's a minimum of BTC230k there, without taking account of privately owned BTCST accounts of unknown value.

So it seems likely that much of that 26000BTC is interest.

I think their buffer's relatively small - last week the MtGox hot-wallet ran dry and Pirate couldn't pay them until a day late, and they had very limited capacity to meet withdrawals until they got the coins through. Would make sense to run the buffer as small as possible.

See, that's part of the problem..  there are a bunch of underinformed people making a bunch of assumptions and then conclusively making decisions on those assumptions and then feeling the need to "protect"/warn others, who may or may not actually be more informed than the original parties.

The account bonus is based on the account balance not moving up or down more than a certain threshold each month.  Interest payments aren't accounted against that bonus, whether paid out or reinvested.  Bitcoinmax is only paying 6.9%, which means the operator(s) make .1% and may not be planning on the bonus.  In addition, Bitcoinmax might be working with a slush fund so that the pirate balance remains untouched much of the time, and instead uses their own funds to buffer the inflows and outflows.  Obviously a person would have to calculate the bonus vs the missed interest opportunity to see which is more profitable.

If you take the top public tier rate instead of the unpublished rate, you are not subject to the limits, AFAIK. I'm not familiar with BitcoinMax, so if they provide <7%/wk, it may be beneficial for them/him/whoever to take on more deposits and take the slightly lower max published rate. It could be possible that Pirate only states you can't deposit more than the limit, but then waives that requirement -- I wouldn't know. I also don't know whether or not Pirate allows compounding on "bonus" accounts.

Interesting -- do they not allow compounding either? Remember that compounding interest is the primary source of supposed coins in there by now, so that would be an important question.

With Bitcoinmax, it's simple to deposit at any time though. So I doubt the rule reduces inflow much.