My thoughts exactly. It just isn't possible that he's dealing with many people. So, let's assume that he is dealing with 20 people. We know that Pirate needs to use most of his reserves, otherwise he wouldn't have borrowed anything. For simplicity, let's say that is 90% of his investments. My guess is that 90% is around 400k BTC right now. Let's assume that he charges 10% on all transactions within his business. Let's also assume that transactions are only done with people once a week.
That's 20k BTC that each person is transacting per week, or almost a quarter of a million dollars. Again, this is per person, per week.
Ok, so maybe this is happening more than once a week. In that case, he can get away with charging lower fees. However, he could also get away with having a lower reserve, so that means that far more money than that is going through him each week. You can see how quickly this gets insane
That's 20k BTC that each person is transacting per week, or almost a quarter of a million dollars. Again, this is per person, per week.
Ok, so maybe this is happening more than once a week. In that case, he can get away with charging lower fees. However, he could also get away with having a lower reserve, so that means that far more money than that is going through him each week. You can see how quickly this gets insane
At one point, someone mentioned futures, or some twist of the concept, as a possible explanation. That'd explain the reserve requirement. He might not need to have them on a daily basis, but must have a large quantity on the off chance someone actually wants to take possession of said coins.
There's probably money to be had to keep one's mouth shut.
