Details of Pirate's Investment Strategy

Vladimir

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-

Quote from: DeathAndTaxes on September 03, 2012, 11:44:24 AM

...
There were victims of Madoffs who YEARS after he was arrested believed it was all some misunderstanding or clerical issue. Some thought it was some govt conspiracy to take Madoff down and their funds were simply collateral damage. All kinds of fantastical (and highly implausible) conspiracy theories. There are people still TODAY asking where is the money. Even when explained that the incoming money was paying out prior investors for decades (and a nice cut skimmed off the top by Madoff) they hold out hope that the money still "exists". While they can comprehend that Madoff was a theif/scam artist they still cling to the paper totals and can't accept that there is not some hidden bank account somewhere with all the money.

As to your direct question. A bunch of reasons:
1) Some as simply in denial. If the believe it wasn't a ponzi they will get repaid and have the last laugh

2) Some accept they will never get the money but wont admit it is a ponzi because they will look stupid. So as long as they "demand proof it is a ponzi" well then they can win some kind of stalemate on the level of "nobody will ever really knows if it was a ponzi or not".

3) Some are criminally complicit. They knew it was a ponzi and encouraged others so they could profit off it. They will NEVER admit it was a ponzi. Hell if Pirate said it was a ponzi they would still admit they didn't know and come up with fantastical stories on how it *could* have been a non-ponzi.

4) Some simply want to be right. The ponzi vs ponzi "forum war" was divisive. Some people just want/need to be right even when they ended up on the losing side.

You will never have 100% of people admit something even when it is obviously true. Hell there are people who won't accept that the Holocaust ever happened. There are mass graves, stories told by millions of survivors, documents, news reports, the actual concentration camps still existing and some people STILL (and NEVER will) believe it happened. There will be far less direct and physical evidence of Pirate's crimes.

R-E-S-T-E-C-P ! (http://www.youtube.com/watch?v=klz6IVHfHpY)

but seriously, QTF the best post in this thread.

mobodick

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Quote from: dlasher on August 31, 2012, 12:16:00 PM

so much... stuff.. being said.

If you believe what pirate himself posted back in November:

https://bitcointalksearch.org/topic/m.1137230

then here was his business:

Quote

The Business:
Over the last few months I have been selling BTC to a group of local people. Now this is a don't ask don't tell group of people so I can't tell you exactly where and to whom the coins ultimately end up with but so far its been pretty painless. During this last week I maxed out my available coins both personally and "leased" from other members and they needed a lot more. Up until now, I have dealt with my core group of friends and been able to handle the requests, but they seem to be getting larger and more frequent. So now I'm looking into other methods for keeping a consistent storage or on-demand availability of coins. I have two plans available for those sitting on coins.

On-Demand
When an order comes in that is over what I have available I'll send out a request to users in this plan requesting the total needed. The first to respond gets the deal and the transfer is made. These coins will be tide up for 1 business day to give me enough time to settle the transaction and acquire the coins to return. This plan pays a flat 3.5%.

Storage
This plan works as an ongoing commitment. You would send coins anytime to the address provided and you would earn interest on a daily basis. You can withdraw your balance at anytime, but I do request that you give me a couple hours to insure I have coverage for the next order. Interest payments are paid out ever 3 days until either you withdraw the funds or my local dealings dry up and I can no longer be profitable. This plan pays 1% per day.

Now I would hope to have enough people on the storage plan that I wouldn't have a need for the on-demand but I'll see how it goes. I ultimately want the ability to provide coins at anytime and any amount for these guys and we can all share in the profits.

I've created my own custom management software that I've built to monitor deposits, withdraws and interest payments. As this gets bigger I'll build a front end for it so users can view and manage there account and maybe putting that domain btclending.com to good use.

For more information send me a PM or just ask below. You can check out my OTC ratings in my signature.

Edit: I forgot to mention that dealing with anything less than 50BTC is more work than its worth so I've made that the minimum on both plans.

Thanks

That's consistent with conversations I've had with him, sidebar, about potential $USD investors.

My 'theory' at the moment is poor planning combined with what was essentially a 'run' on his bank. http://en.wikipedia.org/wiki/Bank_run

Together, down goes the house.

Not that hard to figure out, and given the same circumstances, could happen to your local "community" bank.

You must be blind or stupid to go along with pirates story.
He has created custom software automating the process (making it essentially free) but dealing with 50BTC ($500) is too much work ?
LOL, are you kidding me?
He has local people that buy up 500.000,- BTC at a price much higher than market?
Seriously? They never checked out the market but buy $5.000.000 worth of an ultra-unstable currency at premium price?

But best of all, if his story was all true then pirate would have had the funds to pay everyone back and would have done so.
His website claimed to have peoples funds on some account but clearly the coins were not there.
If his site was telling the truth then a run on his 'bank' would not be a problem, simple as that.
So we can now assume the site was lying and that's not 'poor planning', that's 'part of the plan'.

Plase first explain why he defaulted and why he is hiding.

Ari

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Quote from: DeathAndTaxes on September 03, 2012, 11:36:28 AM

Quote from: BadBear on September 03, 2012, 06:35:33 AM

I think most have conceded, but some are still holding out hope for the 9th and that something magical will happen.

What is special about Sept 9th?

There's this bet about Pirate...

https://bitcointalksearch.org/topic/im-giving-100-roi-away-to-anyone-who-thinks-pirate-is-a-fraud-101751

hannesnaude

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Firstbits : 1Hannes

Thanks guys for your well thought through responses.

I was hoping for input from one of those who claim it wasn't a ponzi / wasn't a ponzi intially / might have been anything other than a ponzi.

But I guess silence is also an answer. Undecided

DeathAndTaxes

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Gerald Davis

Quote from: hannesnaude on September 03, 2012, 08:30:41 AM

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? Huh

You assume people operate like computers and process inputs, use logic and always reach valid conclusions. People pour their hopes, dreams, reputation, and emotions into scams and that is hard to "unwind".

There were victims of Madoffs who YEARS after he was arrested believed it was all some misunderstanding or clerical issue. Some thought it was some govt conspiracy to take Madoff down and their funds were simply collateral damage. All kinds of fantastical (and highly implausible) conspiracy theories. There are people still TODAY asking where is the money. Even when explained that the incoming money was paying out prior investors for decades (and a nice cut skimmed off the top by Madoff) they hold out hope that the money still "exists". While they can comprehend that Madoff was a theif/scam artist they still cling to the paper totals and can't accept that there is not some hidden bank account somewhere with all the money.

As to your direct question. A bunch of reasons:
1) Some as simply in denial. If the believe it wasn't a ponzi they will get repaid and have the last laugh

2) Some accept they will never get the money but wont admit it is a ponzi because they will look stupid. So as long as they "demand proof it is a ponzi" well then they can win some kind of stalemate on the level of "nobody will ever really knows if it was a ponzi or not".

3) Some are criminally complicit. They knew it was a ponzi and encouraged others so they could profit off it. They will NEVER admit it was a ponzi. Hell if Pirate said it was a ponzi they would still admit they didn't know and come up with fantastical stories on how it *could* have been a non-ponzi.

4) Some simply want to be right. The ponzi vs ponzi "forum war" was divisive. Some people just want/need to be right even when they ended up on the losing side.

You will never have 100% of people admit something even when it is obviously true. Hell there are people who won't accept that the Holocaust ever happened. There are mass graves, stories told by millions of survivors, documents, news reports, the actual concentration camps still existing and some people STILL (and NEVER will) believe it happened. There will be far less direct and physical evidence of Pirate's crimes.

DeathAndTaxes

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Gerald Davis

Quote from: BadBear on September 03, 2012, 06:35:33 AM

I think most have conceded, but some are still holding out hope for the 9th and that something magical will happen.

What is special about Sept 9th?

Quote

Also keep in mind some of the ones saying they don't think it's a ponzi have to say that, since they took other peoples money to invest in it. Big ol can of legal worms there.

This is probably true. They will go to their graves publicly stating what they know is false. Even after the money is long gone they will claim to to believe it was a solid investment (albeit high risk which everyone knew) and it just didn't work out.

the_thing

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Proof-of-Stake Blockchain Network

Quote from: hannesnaude on September 03, 2012, 08:30:41 AM

Quote from: Cluster2k on September 03, 2012, 07:30:48 AM

People fall for Ponzi schemes all the time. Here's a recent one from meatspace in Poland:

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? Huh

It is called denial. People want to believe in good things. When something spoils their good beliefs, they desperately search for even the stupidest excuses, so they don't have to stop believing.

n8rwJeTt8TrrLKPa55eU

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Quote from: hannesnaude on September 03, 2012, 08:30:41 AM

Quote from: Cluster2k on September 03, 2012, 07:30:48 AM

People fall for Ponzi schemes all the time. Here's a recent one from meatspace in Poland:

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? Huh

The problem is that for most people, since we've been kids, we've been taught that others are "innocent until proven guilty". Nice humans (which most of us are) like to trust other humans. And our skeptical bullshit detectors have been thoroughly dulled from living under paternalistic governments that (claim to) protect us from harm via a plethora of three-letter agencies.

Whereas Bitcoin is a truly free market, the first pseudonymous free market that many people have been exposed to in their entire lifetime. The rules for Bitcoin are quite different from face-to-face life under governments, but it takes a while for that difference to sink in. Among other things, life under true freedom includes a necessity to do more thorough due diligence on all claims, to realize that if we screw up there is no recourse, and to therefore assume "guilty until proven innocent" for anyone and anything. You have no way of knowing whether the person that's asking you for money, is one of the 90% good guys or one of the 10% crooks.

The methodology you advocate is totally correct for the Bitcon universe, because you assume guilt first, and then request falsifiability: prove to me it's not a scam. Give me fine-grained details. I need to be 99.999% certain before I grant you legitimacy, or give you a single penny. These are the right questions to ask under a pseudonymous free market with no legal recourse.

But, unfortunately, in the Pirate/ZT/Mybitcoin/etc cases (and other borrowing requests currently running) the attitude seems to be to assume innocence and put the burden of proof on the doubters. Skeptics, instead of being treated as people who perform a valuable service, are demonized. That attitude might not be too dangerous in meatspace, but will lead to self-destruction in an environment where it's trivial for smart crooks to construct unverifiable stories, and then get away scot-free with virtually no repercussions.

hannesnaude

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Firstbits : 1Hannes

Quote from: Cluster2k on September 03, 2012, 07:30:48 AM

People fall for Ponzi schemes all the time. Here's a recent one from meatspace in Poland:

Sure, I understand that people fall for them, and there is a gray zone between commonplace returns and what-sort-of-idiot-do-you-take-me-for returns where I can see myself falling for such a scam as well. What baffles me is people who still believe that BTCST wasn't a ponzi. Some of them even appear to have accepted that they will never see a single satoshi, yet they come up with alternative explanations of what could have gone wrong. These are usually accompanied by the statement that no-one can prove that it was a ponzi.

Now, I am not asking for proof that it wasn't a ponzi. I am just asking for evidence. Any single scrap of evidence, however circumstantial. Is there any reason to believe that it was not a ponzi? Is there a single aspect of the scheme or of Pirate's behaviour which is atypical for a ponzi? Or is all of this wishful thinking (even from people who were allegedly not invested in BTCST)? Huh

Cluster2k

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Quote from: hannesnaude on September 03, 2012, 06:33:55 AM

I am baffled by all the posters who still don't believe it was a ponzi. Could any / all of you please expand on why you still don't believe this?

People fall for Ponzi schemes all the time. Here's a recent one from meatspace in Poland:

http://www.ft.com/cms/s/0/0c6e25e4-e553-11e1-b758-00144feab49a.html#axzz25PQZ8bGS
Poland’s Amber Gold to liquidate At a time when banks are paying only about 6 per cent a year on deposits (backed by state guarantees), which also face a 19 per cent capital gains tax, Amber Gold was promising an untaxed guaranteed return of up to 16.5 per cent for investments in gold – a metal that has seen its price stagnate in recent months.

Some are easier to spot than others. The above case was paying up to 16.5%pa which is well above prevailing interest rates, yet it touted itself as a guaranteed place to invest (according to ads posted by the company). Pirate was offering 3400%pa. Not hard to work that one out.

BadBear

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I think most have conceded, but some are still holding out hope for the 9th and that something magical will happen.

Also keep in mind some of the ones saying they don't think it's a ponzi have to say that, since they took other peoples money to invest in it. Big ol can of legal worms there.

hannesnaude

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Firstbits : 1Hannes

I am baffled by all the posters who still don't believe it was a ponzi. Could any / all of you please expand on why you still don't believe this?
Stated another way: How would YOU identify a ponzi? Forget about pirate. Let's say a new opportunity arises in the lending market: call it Buccaneer Investments offering x% return. Under which circumstances would you consider Buccaneer to most likely be a ponzi scheme (which does not necessarily imply that you won't invest in it?)
-Is it a function of x?
-Of the reputation of the person running it?
-Of the amount of detail that is revealed about the underlying business?

What would have to change relative to what we currently know about the BTCST situation before you would consider "ponzi scheme" the most likely situation?

makomk

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Quote from: BIGMERVE on September 01, 2012, 12:19:35 PM

Why would he be using PayPal?

Funnily enough, IIRC we know he was actually using Paypal to trade bitcoins for USD and vice-versa in #bitcoin-otc. It's quite likely that was just an attempt to gain the trust of the community though.

moni3z

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Seems the strategy is pretty obvious:

https://bitcointalksearch.org/topic/m.1048502
https://bitcointalksearch.org/topic/m.1048498

Quote

Starting today, I've lifted the referral only requirement to open a Savings account.
Any account that holds more than 5k BTC will automatically be upgraded to a Trust account on that day.

Translation: everything going to hell, need fast injection of new ponzi cash to cover the withdrawal run

bitlane

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I heart thebaron

Quote from: Micon on September 01, 2012, 12:45:34 PM

here is a spreadsheet that shows if u invest $100 at 7%/wk compounding u have $130 trillion in 8 yrs

Since I seem to be a bit 'short' after this latest debacle, is there any way I can invest with you for 7% and still become a millionaire ?
Wink

I can start with 50 BTC....so long as you can 'hold' the investment for a few years...LOL

Micon

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FPV Drone Pilot

1) its 7% per week. you can stop right there.

2) https://docs.google.com/spreadsheet/ccc?key=0Ah0rJ1eK8mwpdEs2MFRfbGQybGhNamo1aGhDSURaT1E#gid=0

here is a spreadsheet that shows if u invest $100 at 7%/wk compounding u have $130 trillion in 8 yrs

BIGMERVE

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Quote from: Lethos on September 01, 2012, 11:54:09 AM

It probably went all pear shaped when he got his paypal account shutdown. Shocked

They'll probably release his funds in 3-6months.

Why would he be using PayPal?

Lethos

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Keep it Simple. Every Bit Matters.

It probably went all pear shaped when he got his paypal account shutdown. Shocked

They'll probably release his funds in 3-6months.

bitlane

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I heart thebaron

Quote from: BIGMERVE on September 01, 2012, 11:41:20 AM

He might have started off BTCST with good intentions, but got power hungry and greedy. He might have realized that he could easily run with the money. It will be easier for him than if he had run with the equivalent in USD. Much easier.

Not exactly.

When I spoke to him on the telephone, he explained to me that he was initially using the funds to feed starving children in 3rd world countries, but due to Donation problems and UN Sanctions, he was unable to replenish his 'working wallet' bitcoins that were an integral part of the operation. He recognized everything beginning to go 'down hill' following the assassination of Osama Bin Laden.

BIGMERVE

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He might have started off BTCST with good intentions, but got power hungry and greedy. He might have realized that he could easily run with the money. It will be easier for him than if he had run with the equivalent in USD. Much easier.

Topic: Details of Pirate's Investment Strategy (Read 5559 times)