Topic: [GLBSE] (discontinued) Anti-Pirate: Bonds for negative BTCST investments - page 3. (Read 9622 times)

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

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")...

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

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

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.

Come on, with all this respect, at the very least you could use my name...

Is the failure mode Pirate offering such bonds, or buying them?

Assuming he plans to default, by buying bonds he is essentially encouraging me to effectively invest funds into his program. There's some profit to be made here but this doesn't seem catastrophical to me. I doubt anything can be done to prevent this.

If he's issuing bonds, I don't think he has any advantage over anyone else issuing bonds without intending to fulfill his obligations. Obviously whoever is issuing the bonds should be trustworthy.

My words exactly. (imagines self as Pirate) Wow.

Ask anyone who has met me in NYC or Prague (or in Israel for that matter) if I look anything like a pirate.

Thats even funnier then when someone said burt=shakaru

We'll find a BTCST-PR poking around on the forum, soon

This is extremely difficult, if not impossible.

One issue I encountered when I was trying to work through the details of writing CDSes was trust. How do you plan on preventing a pirateat40 sockpuppet (not saying he would create one, but just hypothetically) from buying insurance against himself, thus increasing his own incentive to default.

Basically yes, but that's not accurate. You need to consider this with respect to a complete model of the default time probability distribution.

If I believe that Pirate has a probability of p to default, and that the time of the event in this case is exponentially distributed with mean m, then the expected amount I will have to pay per 1 BTC face value worth of bonds is

\[ 2p \int_0^{\infty} (1/m)\exp(-t/m)(1-r)^t dt = 2p / (1 - m\ln(1-r)) \]

Mircea's offering is basically just like PPT, but with some tweaked terms, some more precise description of terms, and where they are issued without being backed by actually depositing funds in BTCST (which is relevant only for the issuer, not for investors).

The main difference with Anti-Pirate is that they are exact opposites. PPT are positive, Anti-Pirate is negative. Buying Anti-Pirate can be compared to selling PPT, and vice versa. MPOE-PR has made a big deal in this thread out of the fact that these can be sold, borrowing as necessary.

The issuer of an asset always takes the opposite position of a buyer of an asset; if his desired position is neutral, he will have to seek an alternative means to take the same position as buying the bond. For mining bonds this is generally buying hardware; for PPT this is depositing funds in BTCST; etc.

The 2nd difference is that Anti-Pirate is perpetual while PPT has a set time. As the one who first mentioned the term "perpetuity" in the PureMining thread you can surely appreciate that, but anyway think what would it be like if instead of offering PureMining I would offer PureMining.March, PureMining.April, PureMining.May...

Finally, Anti-Pirate is an original (individually at least, globally until shown otherwise) methodology to provide perpetual negative bonds. Not that the idea is groundbreaking, just a correct application of some concepts to the issue at hand.

EDIT: I'm not sure you can deduce my personal motivation for (considering) offering the bond, since its place in my entire investment portfolio needs to be considered.

I will not comment on whether I did or will invest funds into Pirate. I will say however that availability of funds is not really much of a problem as far as such investment is concerned, only default risk (and possibly, lack of storage demand).

I have finally figured out what PR stands for.  It is "Pretty Rude".  Am I correct?

If he manages to sell another few thousand PUREMINING shares @0.4 or even higher instead (by buying mining hardware or mining bonds with the anti-pirate income), he might make much more than investing in Pirate...

If Meni invests the proceeds from sale of anti-pirate bonds into pirate, he will come out ahead so long as default doesn't happen in the next 5 or 6 weeks.

Sorry, the "you" in my question was Meni I just wanted to clarify that I understood the motivations for this offering, as they seem to be different from Mircea's (not that I fully understand his, either).

As far as I understand it, you are betting that it will take less than 10 weeks for pirate to default. (0.93^10 = 0,483982307)
If it takes longer, you would've been better off keeping your BTC - if it takes shorter, you make a profit.

Yes, offering this bond lengthens my Pirate position. But that doesn't mean I can't seek ways to hedge this risk.

Ok, now I know you're just trolling.

We agree on that, in the sense that what he has stated in his OP is not an offer. However, it purports to (maybe, one day) be what the MPEx offer actually is, hence the contention.

So this offering, if does happen, is an indirect statement that you believe pirateat40 will not default, right?

Subscribing.


MPOE-PR,

You are trying to run and business yet your attitude on these forums is a bit, well, shit. I would like to suggest that your reputation on these forums will be a key factor in whether your MPEx venture is successful or not.

As it stands now, your attitude is pretty much dooming you are your business from any real success.

Meni is correct that your offering is nothing like what he has stated in his OP.

Best,
gigavps

Yes. See also my edit to my previous answer.

The point is that the decay rate does not need to correspond to pirate's interest rate. In principle, the effective interest rate is (ry)/(1-y), where r is the decay rate and y is the ratio between the face value and the maturity value. In the no-sell variant, the "face value" does not need to be predefined and is de facto determined by the traded price. In this case the price can change to match whatever pirate's interest rate is.