Topic: Even if PirateAt40 is running a Ponzi maybe it's good? (Read 3209 times)

I cracked a big smile.

LOL! I bet it is him!

I LOLed @ this:

http://www.pof.com/member9890227.htm

I'm not sure if it is him but sure a funny thought.

Well actually it's the opposite, BS&T (although it wasn't called that at first) came around November, while GPUMAX came around February. (from what I recall reading the history of Pirate posts.

Is this true? We know he was doing lending, but I guess I thought GPUMax was in operation around November 2011 whereas BS&T didn't really get going till around February 2012

Oh I still think this is possible. (because  he's not laundering money). And GPUMAX came several months after the birth of btcs&t. Actually after having read all of his posts since his arrival on the forum I have an idea how he might operate.

And yes, withdrawals must hurt him, not because he can't pay back but because it cuts his profits (volume is part of the equation).

Possible - early on with GPUMAX and the like I just figured he was laundering, that seemed the major reason why people would pay a premium for "clean" coins. It's possible that early BTCST funds were used for that too, but I just don't see how the market would support the operation these days...

I don't see anything good about it either. But the bad that I see is that it would hurt people. It doesn't hurt bitcoin. If anything it shows people (quite dramatically, again) the difference between having bitcoins and having promises of bitcoins.

A ponzi is never good as it end badly for most of the people involved.

That said I don't think pirate is running a ponzi. Or at least I don't think he was running on in the beginning.

This is the best answer I've seen:

I think it's clearly bad when it "hypothetically" collapses. Undermining confidence, making the bitcoin economy look idiotic, criminal, attracting attention for possible punitive regulation, etc.

I also think it's bad presently. Legitimate lending that might otherwise occur is being shoveled into the "hypothetical" Ponzi scheme, and legitimate potential borrowers either have to pay mob rates or (more likely) not borrow at all. Even borrowers who proceed will be tempted to run Ponzi's at these ridiculous rates. Many Ponzi's started out as legitimate investments that could not keep up with their unrealistic promises.

I completely agree. The returns he promises dictate that whatever he is doing, it is either illegal or unethical, or both. Scams, in the end, only disrupt the confidence users have of the bitcoin system.

Usually, modern Ponzis shut down when they see a lack of money influx. Carlos Ponzi and Madoff didn't, because theirs were so big, there was nowhere to run. This one is probably on the order if 1M USD profit, a sum that makes changing identity worthwhile -- small enough for authorities to care little, but large enough to pay for the effort.

I don't really see the benefit. All it does is re-distribute funds in an unethical way, and the funds cycling around for interest get locked up. In addition, it reduces credibility of the Bitcoin community and gives a single person a power to disturb markets he hasn't earned.



notme:

It seems he even personally met some people. But this doesn't grant him inhuman abilities. There is a lot of speculation about that person's motivation, but such guesswork is too thin a thread to support a scheme this size. If I were to promise you a round-trip to Mars, you'd be skeptical no matter how much personal ID I give. You'd ask for actual assets. This is the same type of problem; he is making promises that seems highly unlikely to be fulfilled, while putting half a year of perfect Ponzi growth behavior to display, and we've seen no backing at all.

Remember that Ponzi operator they caught last Wednesday? His identity had been known exactly, and Interpol took five years to get him! In the case here, you're lucky if authorities care at all. He might not even need to hide. Undocumented amounts of Bitcoins -- good luck with that in court. What does a contract with him look like anyway?



Bottom line: it hurts the credibility of Bitcoin markets, and I don't see anything good about it.

Another possible negative, if this is a Ponzi:
BTCST is currently attracting a lot of BTC capital because of the high returns. Now, the question is whether this leads to a lack of capital available for other ventures in the BTC economy - so that good business ideas get hindered from lack of capital. If Pirate's is a Ponzi, this would mean that a lot of the available BTC capital
gets tied up in a venture that does not help build a BTC economy, instead of being put to work in ventures that do help build such an economy.
If this is the case, what you could have is a kind of a oil-economy syndrome, where the high yield sector attracts all the capital and drives prices (in this case, interest rates.) up, while other sectors (in this case, other business ventures) suffer from lack of available capital.

That said, I have no idea if BTC upstarts experience difficulty attracting needed capital because of BTCST's high interest rates. For all I know, there could be enough capital flying around to satisfy everyone's need.

It is him, for certain. Certain.

You think you do,


No offence, but how do you know? Because you saw it on.. google?? You cannot be serious. Do you believe everything you find on the internet?

All I would read from that is that there is some identity, that claims to be someone called "Trendon Shavers" with supposed Date of Birth and Address. As long as I dont see any proof, like ID, citizen registration , birth certificate, you name it, I wouldnt belive anything that comes from that sketchy person, called "Pirateat40".

He could be investing in other ponzi schemes. http://www.allhyipmonitors.com/details/dollarplaza.biz?final=1

I have his name and his date of birth.  That's a pretty good start.

The problem as I see it is this:

People on here complain about fractional-reserve banking - well how many in the "Lending" thread are doing just that?

*Full Disclosure: I have a very small account with Patrick Harnett, whom I know has 10K exposure or so to BTCST, but to my knowledge (and as Patrick has stated) investors funds are not directly exposed to BTCST*

It seems that many of the companies on the forum hold undisclosed exposure to various lenders, some of whom may be "robbing peter to pay paul" but at the very least they're loaning this out to others who spend it in the bitcoin economy, these funds then often finding their way back to other investment funds and increasing their liability.

The problem with all fractional reserve systems with fixed interest-rate savings, whether the major banking system or in a small economy like this one, is that a major default (Lehman triggered it in '08) could bring the whole system crashing down and leave depositors with either nothing or massive haircuts on the wealth they thought they had.

We end up with a situation here whereby debt is effectively being made into a form of currency in BTC terms, so if things continue as they are we could easily end up with a situation in which over 21M BTC is owed between various people in the BTC economy.

Whilst I think this is the way it's going to end up going regardless, I do find it alarming that people are slowly starting to invest in debt with ever-increasing leverage, particularly to completely unknown borrowers (and often on a massive scale - BTCST has been able to take in millions of dollars and nobody has enough info to track the guy down if he left).

We need sound financial infrastructure in this community which is secure and decentralized to aid in the vision of bitcoin and promote/provide liquidity for bitcoin commerce and adoption.

It's being worked on as we speak.

I disagree as well mainly for the ^^^^ above posters reasoning.   The media will blow it up and make it look extra risky and that will turn many people away from the system and concept.  We need more positive stories about how Bitcoins have helped people especially in tough times with they had to think out of the box and be innovative.