Going after Trendon Shavers, Pirateat40, BTCST - page 2.

Cyberdyne

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Quote from: JoelKatz on November 11, 2013, 05:32:59 AM

"Impossible" does *not* mean "beyond logical possibility".

If that's really true, then this is the point in my day when I learn something, thanks.

Er, now considering the possibility that my definition of 'impossible' is flawed.

No wait, sorry it's still amusing - Why would anyone (who hasn't inspected every single car on the earth) ever claim that buying a car that gets 300 mpg is impossible? How do they know that? Amusing.

JoelKatz

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Quote from: Cyberdyne on November 11, 2013, 05:24:05 AM

Okay sure, I'll sum up by saying:

Logic compels me to believe in the possibility that some suspicious-looking investment scheme is not a scam.

Common sense compels me to not invest in such wacky schemes, despite the possibility of it being legit.

And I have no problem with that position. What I have a *huge* problem with is people who say things like:

"People who say "X is impossible" are amusing to me, regardless of X."

And

"It's not lacking common sense to say that something being a scam is not a complete certainty."

And

"Stuck in a loop: People who say "a legit business MUST X" are amusing to me, regardless of X.
It's like they've completely shut off the possibility that there could ever be people who know things about business that they don't know."

These are all things you said, and they are all foolish and harmful. Invoking notions of metaphysical certainty, in a conversation about anything but metaphysics, is an attempt to reject common sense and has the actual effect of causing people to make bad decisions. It is also, quite simply, wrong.

"Impossible" does *not* mean "beyond logical possibility". Buying a car that goes 300 miles per gallon of gas is not a logical impossibility, but it is also impossible. "Complete certainty" is a metaphysical concept. Its relevance to investing is nil. And "MUST" does not mean complete metaphysical certainty either.

That is all complete and harmful foolishness.

Cyberdyne

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Quote from: JoelKatz on November 11, 2013, 05:19:46 AM

Quote from: Cyberdyne on November 11, 2013, 05:09:16 AM

It's not lacking common sense to say that something being a scam is not a complete certainty. It's just logical.

I totally disagree. In fact, to talk about what can be known with "complete certainty" is the very opposite of common sense. Common sense is about making decisions that will almost always be right given that we never have complete certainty. Common sense is not letting scammers sucker you in with arguments about how you can't know their obvious lies are nonsense with "complete certainty" and how you must always entertain the possibility that might have found some miracle. Common sense is knowing there are no miracles, not keeping your mind perpetually opened to the possibility that their might be so that you can be taken advantage of.

Okay sure, I'll sum up by saying:

Logic compels me to believe in the possibility that some suspicious-looking investment scheme is not a scam.

Common sense compels me to not invest in such wacky schemes, despite the possibility of it being legit.

JoelKatz

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Quote from: Cyberdyne on November 11, 2013, 05:09:16 AM

It's not lacking common sense to say that something being a scam is not a complete certainty. It's just logical.

I totally disagree. In fact, to talk about what can be known with "complete certainty" is the very opposite of common sense. Common sense is about making decisions that will almost always be right given that we never have complete certainty. Common sense is not letting scammers sucker you in with arguments about how you can't know their obvious lies are nonsense with "complete certainty" and how you must always entertain the possibility that might have found some miracle. Common sense is knowing there are no miracles, not keeping your mind perpetually opened to the possibility that there might be so that you can be taken advantage of.

Common sense is knowing when *not* to keep an open mind. Common sense is knowing when you know something. Entertaining miniscule possibilities is the antithesis of common sense.

Puppet

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Then just multiply your potential profit with the extreme low probability its not a scam and you can see why its definitely stupid to "invest" in it.

Cyberdyne

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Quote from: JoelKatz on November 11, 2013, 04:35:43 AM

Simply put, anyone who sees an absurdly high interest rate and thinks "what a wonderful opportunity" rather than "what an obvious scam" lacks common sense.

In keeping an open mind, for me it is neither of those.

It is more like "this is probably a scam, but since I recognize that there are things in this universe that I am not an expert in, and will never be an expert in, it's possible that it's actually a wonderful opportunity."

It's not lacking common sense to say that something being a scam is not a complete certainty. It's just logical.

JoelKatz

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Quote from: Cyberdyne on August 09, 2013, 07:02:27 AM

Stuck in a loop: People who say "a legit business MUST X" are amusing to me, regardless of X.

It's like they've completely shut off the possibility that there could ever be people who know things about business that they don't know.

Everyone on the internet is automatically an expert at everything though.

Are you opposed to learning a lesson on some sort of principle? People who say things that are phenomenally improbable and where they have an enormous incentive to lie, where they are anonymous and everyone in the past who has made similar claims has been lying, are almost certainly lying. This is an undeniable fact and the effort spent evading it and attacking the people explaining it would be comical if they weren't doing so much real harm to real people.

Nobody has ever found any legitimate, low risk investment that requires taking on more and more high interest debt, yet any number of scams are based on this. The probability that the person asking you for money will be the first is near zero, and absent some plausible explanation of how they could possibly be that person, only a fool would consider any other possibility than that it's a scam. This is simple, basic common sense.

Simply put, anyone who sees an absurdly high interest rate and thinks "what a wonderful opportunity" rather than "what an obvious scam" lacks common sense. And, honestly, anyone who suggests that the community ought not to learn this lesson, in my opinion, is most likely seeking to exploit that lack of common sense. There is no other reason I can think of to preserve it rather than combat it.

MPOE-PR

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Quote from: Vandroiy on August 09, 2013, 09:12:45 AM

This is still going on? Allow me to try once again.

You don't derive that BS&T was a Ponzi using only formal logic statements. Almost anything is somehow possible. If I claim to be an alien who has traveled to Mars and back yesterday, nobody can formally prove me wrong. Pirate's chances of being legitimate were just small -- not in a "I don't believe it" kind of way, but in the way a physicist uses the word. Let's do an example; there are much better combinations in the threads from back then, but this already shows the point:

BS&T scaled on a smooth exponential, which means its reservoir of unfulfilled trades at horrible rates was really large compared to the entire market. I'd bet chances for that to be below 20%.
Pirateat40 made statements that seem unbefitting for a qualified trader. I'd give it a maximum 40% that he is able to beat competition by such a wide margin.
There are wealthy investors around who would finance an operation like his if explained under NDA. This would also help speed up the fundraising process to avoid competition. I'd give him 1:4 at best that he neither found a way to use a large investor nor had a situation in which he'd stop taking deposits and switch to his own funds.
The above statements are independent.

With only this primitive reasoning, I already expect a maximum probability of legitimacy of 0.2 * 0.4 * 0.25 = 2%.

Go figure what happens when looking at more independent statements, such as the abundant warning signs of a Ponzi scheme! The possibility of legitimacy becomes bunk, nothing a serious analyst would care about. I could not assign a final probability to it because it becomes noise to the probability of myself being insane, among other things that become relevant at such low probabilities.

Now maybe some people disagree on the points above. But it shouldn't be hard to find three to four independent statements like this and conclude that "non-Ponzi" chances are just horribly low.

Oh hai V.

Vandroiy

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This is still going on? Allow me to try once again.

You don't derive that BS&T was a Ponzi using only formal logic statements. Almost anything is somehow possible. If I claim to be an alien who has traveled to Mars and back yesterday, nobody can formally prove me wrong. Pirate's chances of being legitimate were just small -- not in a "I don't believe it" kind of way, but in the way a physicist uses the word. Let's do an example; there are much better combinations in the threads from back then, but this already shows the point:

BS&T scaled on a smooth exponential, which means its reservoir of unfulfilled trades at horrible rates was really large compared to the entire market. I'd bet chances for that to be below 20%.
Pirateat40 made statements that seem unbefitting for a qualified trader. I'd give it a maximum 40% that he is able to beat competition by such a wide margin.
There are wealthy investors around who would finance an operation like his if explained under NDA. This would also help speed up the fundraising process to avoid competition. I'd give him 1:4 at best that he neither found a way to use a large investor nor had a situation in which he'd stop taking deposits and switch to his own funds.
The above statements are independent.

With only this primitive reasoning, I already expect a maximum probability of legitimacy of 0.2 * 0.4 * 0.25 = 2%.

Go figure what happens when looking at more independent statements, such as the abundant warning signs of a Ponzi scheme! The possibility of legitimacy becomes bunk, nothing a serious analyst would care about. I could not assign a final probability to it because it becomes noise to the probability of myself being insane, among other things that become relevant at such low probabilities.

Now maybe some people disagree on the points above. But it shouldn't be hard to find three to four independent statements like this and conclude that "non-Ponzi" chances are just horribly low.

MPOE-PR

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Quote from: Cyberdyne on August 09, 2013, 07:02:27 AM

Everyone on the internet is automatically an expert at everything though.

Yes, because they could be, which means they actually are. Welcome to contemporary America.

Cyberdyne

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Quote from: mp420 on August 09, 2013, 06:31:54 AM

Quote from: Cyberdyne on August 09, 2013, 12:45:47 AM

Quote from: mp420 on August 09, 2013, 12:36:10 AM

No legit business can offer the kind of returns he offered.

People who say "X is impossible" are amusing to me, regardless of X.

Okay, let's rephrase that. No legit business, absent rampant hyperinflation scenarios where the real interest rate is much lower, can offer the kind of returns he offered.

Reasoning:

a legit business, if it ever issues debt at astronomical rates, MUST pay those high-interest loans off immediately when feasible.

Stuck in a loop: People who say "a legit business MUST X" are amusing to me, regardless of X.

It's like they've completely shut off the possibility that there could ever be people who know things about business that they don't know.

Everyone on the internet is automatically an expert at everything though.

mp420

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Quote from: Cyberdyne on August 09, 2013, 12:45:47 AM

Quote from: mp420 on August 09, 2013, 12:36:10 AM

No legit business can offer the kind of returns he offered.

People who say "X is impossible" are amusing to me, regardless of X.

Okay, let's rephrase that. No legit business, absent rampant hyperinflation scenarios where the real interest rate is much lower, can offer the kind of returns he offered.

Reasoning:

1) Legit businesses do not operate in a vacuum. There's always competition, and even if there isn't, there's a risk of competition.
2) Credit is readily available for legit businesses. Even credit card debt is practically free of interest compared to what Pirate offered.
3) To hedge against the risk of someone else starting a competing business with much lower interest expenses, a legit business, if it ever issues debt at astronomical rates, MUST pay those high-interest loans off immediately when feasible. Actually it wouldn't have made sense to issue debt at those rates to begin with (which is why it was crystal clear from the beginning that BTCST was a ponzi scheme), but even if it had made sense, he would have had no other option than to pay the initial debt off completely very quickly after getting the business running.

It's astonishing how little financial common sense many Bitcoin ethusiasts have. No wonder all those suckers were so easily drawn into the scam.

Cyberdyne

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Quote from: mp420 on August 09, 2013, 12:36:10 AM

No legit business can offer the kind of returns he offered.

People who say "X is impossible" are amusing to me, regardless of X.

User705

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Quote from: ?? on ??

Pirate is being charged for running a ponzi not a security unless i just missed some giant detail?

A ponzi is an investment fraud crime because interest rate return was being offered. Back in the old days before those laws came about it was considered hard to prove theft since people gave money willingly.
He is charged with violations of Securities Act of 1933 and Exchange Act of 1934.
http://www.sec.gov/litigation/complaints/2013/comp-pr2013-132.pdf

mp420

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Quote from: MelMan2002 on August 08, 2013, 11:56:32 PM

Quote from: Magazine on August 08, 2013, 11:52:51 PM

I just read pretty much the whole thread, and boy am I shocked. This is my take on it, I guess he wanted to start out legit and run a legit operation but things didn't work out and he saw all the BTC coming in and just ran it as a Ponzi Scheme until he decided enough was enough and just ran with all the BTC.

Legit operation?? What operation? It was all a ponzi from start to finish.

Not all of us are so sure on that. But in the end it does not really matter.

Those who aren't sure are fucking idiots. No legit business can offer the kind of returns he offered. I consider everyone who was defending Pirate when he was running his scam partially responsible for the scam growing so big.

User705

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Quote from: ?? on ??

Quote from: User705 on August 09, 2013, 12:17:47 AM

Quote from: ?? on ??

Quote from: BCB on August 08, 2013, 11:46:02 AM

This will continue to be a precedent setting case and I believe we'll see criminal prosecution of Trendon and maybe even some of the pass throughs.

As far as I know payb.tc was the only PT that directly worked with Pirate. Everyone else worked with GLBSE.

Nefario is not exactly going to be a good witness as a non-American who was deported while on holiday. And that would be if they could get him to the USA.

Theymos as a young American, and part owner of GLBSE might be, but he openly called for people to list PT's on GLBSE using this forum. I doubt he is going to want to work with the govt.

I have no idea if payb.tc is an American or not. If he is not and is not in the USA I kinda doubt they will go after him.

I'm not sure any other GLBSE owner is an American or who has access to that sort of stuff.

Also I'm going to assume that the PT's were acting in good faith and did not suspect pirate was a ponzi. If they did think this, then why not just keep the money if they knew it was to fail? I guess some of them could have done that, and that would be a way to prove guilt.

Well I'm not a lawyer but I do expect legal charges against pirate. After the SEC evidence it really is looking like he was doing a ponzi but his story on controlling the BTC price might explain his huge trading losses. Also 150,000 BTC the SEC can't track? I do wonder if pirate started out as a ponzi or if his plan just failed and he just kept it going. Either way in the end it seems ponzi.

What's your take on your favorite person Matthew regarding this? Didn't he offer some sort of insurance against Pirateat40 "securities"?

He claimed that pirate was not going to default and was going to back that claim up with BTC. He maybe let pirate sell off bad debt (or matthew sold off his debt) and later called the whole "bet" scam a "joke". He got the scammers tag for this. Matthew still owes people millions of USD in BTC. I wonder if Matthew could get jailed for this crime. Hard to say as I am not a lawyer.

Well that insurance would probably be considered a "security" as well. Total popcorn time.

User705

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Quote from: BCB on August 08, 2013, 11:46:02 AM

This will continue to be a precedent setting case and I believe we'll see criminal prosecution of Trendon and maybe even some of the pass throughs.

As far as I know payb.tc was the only PT that directly worked with Pirate. Everyone else worked with GLBSE.

Nefario is not exactly going to be a good witness as a non-American who was deported while on holiday. And that would be if they could get him to the USA.

Theymos as a young American, and part owner of GLBSE might be, but he openly called for people to list PT's on GLBSE using this forum. I doubt he is going to want to work with the govt.

I have no idea if payb.tc is an American or not. If he is not and is not in the USA I kinda doubt they will go after him.

I'm not sure any other GLBSE owner is an American or who has access to that sort of stuff.

Also I'm going to assume that the PT's were acting in good faith and did not suspect pirate was a ponzi. If they did think this, then why not just keep the money if they knew it was to fail? I guess some of them could have done that, and that would be a way to prove guilt.

Well I'm not a lawyer but I do expect legal charges against pirate. After the SEC evidence it really is looking like he was doing a ponzi but his story on controlling the BTC price might explain his huge trading losses. Also 150,000 BTC the SEC can't track? I do wonder if pirate started out as a ponzi or if his plan just failed and he just kept it going. Either way in the end it seems ponzi.

What's your take on your favorite person Matthew regarding this? Didn't he offer some sort of insurance against Pirateat40 "securities"?

Magazine

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Quote from: MelMan2002 on August 08, 2013, 11:56:32 PM

Quote from: Magazine on August 08, 2013, 11:52:51 PM

I just read pretty much the whole thread, and boy am I shocked. This is my take on it, I guess he wanted to start out legit and run a legit operation but things didn't work out and he saw all the BTC coming in and just ran it as a Ponzi Scheme until he decided enough was enough and just ran with all the BTC.

Legit operation?? What operation? It was all a ponzi from start to finish.

Ah, you're probably right. I wasn't around when this stuff happened.

MelMan2002

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Quote from: Magazine on August 08, 2013, 11:52:51 PM

I just read pretty much the whole thread, and boy am I shocked. This is my take on it, I guess he wanted to start out legit and run a legit operation but things didn't work out and he saw all the BTC coming in and just ran it as a Ponzi Scheme until he decided enough was enough and just ran with all the BTC.

Legit operation?? What operation? It was all a ponzi from start to finish.

Magazine

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I just read pretty much the whole thread, and boy am I shocked. This is my take on it, I guess he wanted to start out legit and run a legit operation but things didn't work out and he saw all the BTC coming in and just ran it as a Ponzi Scheme until he decided enough was enough and just ran with all the BTC.

Topic: Going after Trendon Shavers, Pirateat40, BTCST - page 2. (Read 48480 times)