[GLBSE] (discontinued) Anti-Pirate: Bonds for negative BTCST investments - page 2.

OgNasty

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Quote from: copumpkin on April 22, 2012, 06:57:19 PM

Quote from: Sukrim on April 22, 2012, 06:11:55 PM

Quote from: OgNasty on April 22, 2012, 02:12:30 PM

So the million dollar question seems to be...

Will Bitcoin Savings & Trust default?

About the bet:
It's not defined how a "default" looks like - even MPOE shares are worded more strictly! Undecided

I think there will be plenty of noise if anything remotely close to a default happens, so I doubt we'll have to resort to technicalities in describing it.

+1

EDIT: It is literally the textbook definition of what a "default" looks like...

Quote from: wikipedia - http://en.wikipedia.org/wiki/Default_(finance)

[1] Default may occur if the debtor is either unwilling or unable to pay their debt.

Quote from: betsofbitco.in - http://betsofbitco.in/item?id=349

This statement is true if Bitcoin Savings and Trust is unwilling or unable to pay out requested deposits on or before July 4th, 2012

copumpkin

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I'm actually a pineapple

Quote from: Sukrim on April 22, 2012, 06:11:55 PM

Quote from: Meni Rosenfeld on April 22, 2012, 03:40:36 PM

Nefario said he would add prediction market functionality to GLBSE, and advised against using the current functionality for this (though I have had quite a few ideas how to do the latter). If neither Nefario nor anyone else do this in a timely manner, I will seriously consider becoming involved in a project to create a Bitcoin prediction market platform (both using Bitcoin for payments and being rich in Bitcoin-related predictions).

Maybe you can collaborate with him on that even, I'm not sure if a prediction market is the real main issue on GLBSE right now - if they do some serious work with some HCI people on the interface, they might get more money flowing than adding another complexity to the mix atm. If they release an extensive API soon or allow you to work with them somehow maybe, it could work side by side though.

About the bet:
It's not defined how a "default" looks like - even MPOE shares are worded more strictly! Undecided

I think there will be plenty of noise if anything remotely close to a default happens, so I doubt we'll have to resort to technicalities in describing it. betsofbitco.in clearly seems to think they have enough information to go on in judging. I wonder if whoever submitted the original statement (OgNasty?) can amend it, though.

Sukrim

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Quote from: Meni Rosenfeld on April 22, 2012, 03:40:36 PM

Nefario said he would add prediction market functionality to GLBSE, and advised against using the current functionality for this (though I have had quite a few ideas how to do the latter). If neither Nefario nor anyone else do this in a timely manner, I will seriously consider becoming involved in a project to create a Bitcoin prediction market platform (both using Bitcoin for payments and being rich in Bitcoin-related predictions).

Maybe you can collaborate with him on that even, I'm not sure if a prediction market is the real main issue on GLBSE right now - if they do some serious work with some HCI people on the interface, they might get more money flowing than adding another complexity to the mix atm. If they release an extensive API soon or allow you to work with them somehow maybe, it could work side by side though.

About the bet:
It's not defined how a "default" looks like - even MPOE shares are worded more strictly! Undecided

copumpkin

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I'm actually a pineapple

Quote from: OgNasty on April 22, 2012, 02:12:30 PM

So the million dollar question seems to be...

Will Bitcoin Savings & Trust default?

Looks like 10 bitcoins say no

Who wants yes?

Meni Rosenfeld

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Quote from: copumpkin on April 22, 2012, 02:51:36 PM

Quote from: Meni Rosenfeld on April 22, 2012, 02:20:32 PM

(note: betsofbitco.in is not a prediction market)

I wish it were Sad

please make us a prediction market!

Nefario said he would add prediction market functionality to GLBSE, and advised against using the current functionality for this (though I have had quite a few ideas how to do the latter). If neither Nefario nor anyone else do this in a timely manner, I will seriously consider becoming involved in a project to create a Bitcoin prediction market platform (both using Bitcoin for payments and being rich in Bitcoin-related predictions).

copumpkin

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I'm actually a pineapple

Quote from: Meni Rosenfeld on April 22, 2012, 02:20:32 PM

(note: betsofbitco.in is not a prediction market)

I wish it were Sad

please make us a prediction market!

Meni Rosenfeld

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Quote from: OgNasty on April 22, 2012, 02:12:30 PM

So the million dollar question seems to be...

Does Pirate really have that much in deposits? Wink

Quote from: OgNasty on April 22, 2012, 02:12:30 PM

Will Bitcoin Savings & Trust default?

I had a thought about doing this asset in the form of a prediction market (note: betsofbitco.in is not a prediction market), but what I have here is much more inline with the underlying.

OgNasty

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So the million dollar question seems to be...

Will Bitcoin Savings & Trust default?

Meni Rosenfeld

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This is happening. Get your Anti-Pirate bonds (initially 500 at 1.1 BTC) on Tuesday, 24 April 2012 at 03:45 UTC.

IPO page: https://glbse.com/ipo/26

Meni Rosenfeld

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Quote from: nrd525 on April 22, 2012, 12:02:25 AM

Quote from: Meni Rosenfeld on April 19, 2012, 02:23:08 PM

But that's not even the main point, there's something much more basic that you're missing. Suppose I want to take a long position of X BTC on Pirate. I can do this by either depositing in his program or by offering X BTC worth of bonds. Assume the worst case that Pirate buys them all. Then this increases his incentive to default by X BTC, and if I deposited in his program I would also have increased his incentive by X BTC. So choosing to offer these bonds has no effect on the incentive to default, and that's assuming the worst case - if people other than Pirate buy bonds, his incentive to default decreases (when compared to the case that I obtained my position by depositing).

What you're really saying is that depositing in Pirate's program is a very bad idea as it encourages default. Which may be true, but has nothing to do with this. This bond allows people to deposit negative amounts which discourages default, unless pirate deposits a negative amount in his own program which makes this neutral.

I don't understand your reasoning and would appreciate a better explanation (I'm not saying you are wrong, just that I'd like to understand your arguments better).

In my mind, what you are doing is creating a new market for Pirate. Previously he had to rely upon people investing (a decision that he doesn't control), but now he can take action himself (either by an internet proxy/fake identity or an accomplice) and make money off of you. I guess so long as this is a small amount of money it won't exercise a big influence on his decisions, but I also really don't know what kind of sums either party is dealing with.

Now when you and other people (the pass-through bond for instance) create new markets for Pirate you are creating new inflows that allow the Ponzi scheme to grow larger - this will probably allow it to last longer, get larger, and hurt more people when it collapses.

If I didn't offer the bonds, it is likely that I would have instead invested funds in BTCST. He is "making money off me" due to the fact that I chose to take a long position, but he is not making any more money due to the fact that I obtain this position by offering bonds rather than investing. In fact he will be making less money because he has to pay a fee on top of the face value. All of this is of course under the assumption that he does in fact have malicious intents.

Positive bonds such as PPT.X, on the other hand, do allow more cash to flow into Pirate, but I still believe the effect is small.

nrd525

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Quote from: Meni Rosenfeld on April 19, 2012, 02:23:08 PM

But that's not even the main point, there's something much more basic that you're missing. Suppose I want to take a long position of X BTC on Pirate. I can do this by either depositing in his program or by offering X BTC worth of bonds. Assume the worst case that Pirate buys them all. Then this increases his incentive to default by X BTC, and if I deposited in his program I would also have increased his incentive by X BTC. So choosing to offer these bonds has no effect on the incentive to default, and that's assuming the worst case - if people other than Pirate buy bonds, his incentive to default decreases (when compared to the case that I obtained my position by depositing).

What you're really saying is that depositing in Pirate's program is a very bad idea as it encourages default. Which may be true, but has nothing to do with this. This bond allows people to deposit negative amounts which discourages default, unless pirate deposits a negative amount in his own program which makes this neutral.

I don't understand your reasoning and would appreciate a better explanation (I'm not saying you are wrong, just that I'd like to understand your arguments better).

In my mind, what you are doing is creating a new market for Pirate. Previously he had to rely upon people investing (a decision that he doesn't control), but now he can take action himself (either by an internet proxy/fake identity or an accomplice) and make money off of you. I guess so long as this is a small amount of money it won't exercise a big influence on his decisions, but I also really don't know what kind of sums either party is dealing with.

Now when you and other people (the pass-through bond for instance) create new markets for Pirate you are creating new inflows that allow the Ponzi scheme to grow larger - this will probably allow it to last longer, get larger, and hurt more people when it collapses.

Meni Rosenfeld

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Quote from: ribuck on April 20, 2012, 10:05:57 AM

This is another very interesting offer! But one thing doesn't seem quite right...

Quote from: Meni Rosenfeld on April 19, 2012, 03:50:09 AM

The issuer has the right to buy back the bonds at 160% of their face value. This cannot be exercised if there is substantiated suspicion that a default has already taken place.

If you make the buy-back price 200% of face value, there will be no need for people to trust that you will not buy back the bonds just in advance of a default.

Your provision regarding "substantiated suspicion" sounds reasonable, but it won't feel very satisfactory to the few outliers who are convinced the default is about to happen then lose their bonds for 160%. At 200%, no-one can complain.

This makes sense, I'll think about this.

ribuck

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This is another very interesting offer! But one thing doesn't seem quite right...

Quote from: Meni Rosenfeld on April 19, 2012, 03:50:09 AM

The issuer has the right to buy back the bonds at 160% of their face value. This cannot be exercised if there is substantiated suspicion that a default has already taken place.

If you make the buy-back price 200% of face value, there will be no need for people to trust that you will not buy back the bonds just in advance of a default.

Your provision regarding "substantiated suspicion" sounds reasonable, but it won't feel very satisfactory to the few outliers who are convinced the default is about to happen then lose their bonds for 160%. At 200%, no-one can complain.

Meni Rosenfeld

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Quote from: ?? on ??

Meni, instead of responding to trolls on this thread, why don't you just create your offering on GLBSE, announce it here and start selling shares?

Creating assets on GLBSE requires planning. I wrote the OP when I was ready to write the OP, not when I was ready to create the asset. If all goes well it should be a matter of days.

Rest assured that MPOE-PR's objections are not holding me back.

Meni Rosenfeld

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Quote from: MPOE-PR on April 20, 2012, 02:21:28 AM

Quote

Ok, now I know you're just trolling.

Let me point out to you, Meni Rosenfeld, that throughout this thread I have been speaking as to facts. You have been speaking as to persons.

I think you'll find that most of your posts in this thread contain personal attacks, including the first and the latest.

A number of people have suggested that your behavior is unacceptable. There are two possibilities, either we're all wrong and you should stop wasting your time on us, or you're wrong and you should stop wasting our time.

You are no longer welcome in this thread.

MPOE-PR

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Quote

Ok, now I know you're just trolling.

Let me point out to you, Meni Rosenfeld, that throughout this thread I have been speaking as to facts. You have been speaking as to persons.

Quote

But now it sounds like Pirate could default, run away with all of the deposited funds and make extra money from the options (held by a collaborator or fake account).

Now I think this is a very bad idea as it encourages default.

Exactly. A very well run scam, benefiting from the naivite of a circlejerk made out of people who misrepresent (especially to themselves) both their skills and their reach. This is in fact a texbook case of how a well run Ponzi goes.

Quote

Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are â€“ or pretend to be â€“ members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse.

From the everhelpful wikipedia

Quote

The currently intended scale of the offering will be such that the additional incentive, compared to Pirate's existing holdings, is negligible.

Yes, a negligible initiative to pretend like it's doing what it's not, all the while accomplishing the exact opposite. You should be in politics.

Meni Rosenfeld

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Quote from: nrd525 on April 19, 2012, 01:34:55 PM

I liked the idea at first.

But now it sounds like Pirate could default, run away with all of the deposited funds and make extra money from the options (held by a collaborator or fake account).

Now I think this is a very bad idea as it encourages default.

The currently intended scale of the offering will be such that the additional incentive, compared to Pirate's existing holdings, is negligible. If Pirate isn't planning to default now, it is highly unlikely that buying this bond will convince him to do so.

But that's not even the main point, there's something much more basic that you're missing. Suppose I want to take a long position of X BTC on Pirate. I can do this by either depositing in his program or by offering X BTC worth of bonds. Assume the worst case that Pirate buys them all. Then this increases his incentive to default by X BTC, and if I deposited in his program I would also have increased his incentive by X BTC. So choosing to offer these bonds has no effect on the incentive to default, and that's assuming the worst case - if people other than Pirate buy bonds, his incentive to default decreases (when compared to the case that I obtained my position by depositing).

What you're really saying is that depositing in Pirate's program is a very bad idea as it encourages default. Which may be true, but has nothing to do with this. This bond allows people to deposit negative amounts which discourages default, unless pirate deposits a negative amount in his own program which makes this neutral.

nrd525

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I liked the idea at first.

But now it sounds like Pirate could default, run away with all of the deposited funds and make extra money from the options (held by a collaborator or fake account).

Now I think this is a very bad idea as it encourages default.

copumpkin

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I'm actually a pineapple

Quote from: Meni Rosenfeld on April 19, 2012, 12:00:41 PM

That's not a likely use case. Every Anti-Pirate bond negates an equivalent pirate investment. People who invest in both will make no returns and will just have to provide collateral and a fee for the privilege of getting nothing.

It's a stretch, but maybe it can be used to move up a Pirate tier, or enable other special Pirate offerings. For example someone who wants to risk only 1500 BTC with Pirate, can deposit 2000 BTC and buy 500 BTC face value worth of anti-pirate bonds. The increased interest rate just might be able to compensate for the costs.

The intended use case is for people who really want to be short on Pirate.

Fair enough

Sounds like something Mr. Popescu would really like to have, then Wink

Meni Rosenfeld

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Quote from: copumpkin on April 19, 2012, 11:50:50 AM

Quote from: Meni Rosenfeld on April 19, 2012, 11:31:57 AM

What do people think about renaming from Anti-Pirate to Antimatter? Less descriptive, but way cooler.

Quote from: copumpkin on April 19, 2012, 11:03:37 AM

I was asking about pirate posing as someone else and buying these contracts, thus adding to his incentive to default.
I don't really think it'll happen, but given that the people buying these at least have some degree of uncertainty about him, it's conceivable that some people might be worried about it.

The people buying these bonds will want Pirate to have additional incentive to default.

They will? I assumed they would primarily be used as part of a hedging strategy. I guess it then incentivizes pirate lenders to buy up all the bonds to prevent pirate's sockpuppet account from doing it first, lest he have perverse incentives

That's not a likely use case. Every Anti-Pirate bond negates an equivalent pirate investment. People who invest in both will make no returns and will just have to provide collateral and a fee for the privilege of getting nothing.

It's a stretch, but maybe it can be used to move up a Pirate tier, or enable other special Pirate offerings. For example someone who wants to risk only 1500 BTC with Pirate, can deposit 2000 BTC and buy 500 BTC face value worth of anti-pirate bonds. The increased interest rate just might be able to compensate for the costs.

The intended use case is for people who really want to be short on Pirate.

Quote from: Sukrim on April 19, 2012, 11:50:03 AM

The "classical" antagonist to a pirate is still a ninja! (http://knowyourmeme.com/memes/pirates-vs-ninjas)

Alternatively you could be the http://en.wikipedia.org/wiki/East_India_Trading_Company (see "Pirates of the Caribbean")... Wink

Not a fan, but will consider this.

Topic: [GLBSE] (discontinued) Anti-Pirate: Bonds for negative BTCST investments - page 2. (Read 9622 times)