Topic: How did people fall for this Pirate scam? - page 2. (Read 7099 times)

It can work, if you're extremely lucky. But you have to keep getting lucky. And if you're cocky enough (and all evidence points to Mr. Shavers being extremely cocky), you think you can pull it off. It's a juicy target, and certainly others will try to snag it. Just because you and I can see it's pretty much doomed to failure, doesn't mean that others won't think, "But I can get it right."  History is littered with the corpses of those who thought just that about one thing or another.

I dont think so. Your model is essentially trying to crash the price by selling a ton of BTC, and then buying back cheaply.  Its been posted a million times, but that just doesnt work. If you have enough BTC, you can crash the price allright, but you cant possibly buy back a (much) bigger amount of BTC later without increasing the price well above where it was before you crashed it, because you will never be the only one buying up those cheap coins.

IF there was any way for something similar to be possible, you would need a very different mechanism to influence the price. Selling coins for cheap wont make it work.

Had it worked, The potential pirate business model I posited above would have easily netted a nice big chunk of change. But it required that nobody know about it, so he couldn't discuss the business model (guaranteed failure if he does). He leaked one too many details, and people got wise. Then a "bank run" happened when he had all (or at least, too much) of his money in USD or whatever currency he was using, the price got out of control, and he had to pull the trigger.

Note that all of this is just speculation, but it's based on all the evidence I've seen over the past few weeks of watching this thing collapse.

I have no desire to rub in any salt, but Brunic still seems convinced its possible, that makes him vulnerable to another scammer exploiting that. Also, if there really is such a business model that would allow him or me to earn 100's of 1000s of BTC, it certainly would be worth discussing .

He got conned - or made a bad investment, the end result is the same, so the difference is moot - and he knows it. He accepts that, and is taking it quite well, considering how little lube was used.

No need to rub salt in the wound.

FWIW, Here's what I think was Pirate's miracle business model:

1. Get lots of BTC
2. Use that large amount of BTC to scare lemmings on MTGox into jumping off a cliff or 5
3. Snap up discount coins.
4. Lather, rinse, repeat.

Catch is, lemmings failed to show one to many times, he had too much of his funds in USD, and now he's screwed. He had every intention of paying everyone back, but there's no way he can buy up enough coins to do so, now.

Granted; but  do ask yourself: why would the "real estate guy" not want to wait 30 hours in order to make his purchase, rather than paying Pirate some insane premium to get them right away? And this wouldnt be happening once, this would have to be happening constantly, and at an ever increasing volume.


You mean to some big idiot. Who else would pay 20% over market price for such volumes to get his investment faster? And again, this wouldnt be happening once, but constantly at an ever increasing volume.

The thing to focus on here is that if you assume your theory is correct, the "investor" would be losing whatever the lenders are earning. And they were earning  incredulous numbers. That means the Pirate needed an endless supply of very rich and very stupid investors. Doesnt seem likely to me. Those investors, if for some reason they didnt want to buy from MtGox, would have reached out and tried to find sellers that would for for less than 20% markup. It wouldnt be hard to find people with large BTC holdings willing to settle for a lot less.

Moreover, if pirate could indeed sell at (say) 20% markup, he would have to be earning a ton and I see no reason for him to give almost all his profit to his lenders. He would have started acquiring more and more own capital and be less and less dependant on his extremely expensive lenders. By now you would expect he needed none. The opposite was true, he needed ever more lenders. It doesnt compute.


Im trying to explain the logical fallacy.  If nothing else, if you would come up with some workable miracle business model, ask yourself why no one else would have adopted it. Remember Pirate started small, much smaller than a lot of other BTC holders.

Newsflash.

The free market called. Wanted me to let you know its ok, and will be fine.


Just posting this here again so no one misses it.

Brunic,

I agree with 100% of what you said.... right down to the reasoning of why to invest with BTCST.

I would also like to point out that it is much different to work that business model than to liquidate your entire holdings in a week.

Yeah, but he don't have to give back the BTC immediately. Buying 111k BTC in 1 day or getting them back over a longer period is different. If you buy around 155 BTC each hour for 30 days, you get back your 111k BTC. The effect on the price is more subtle. Especially if you put some ASK walls of like 5000 BTC. Traders will be tempted to jump the wall if they see it, adding downward pressure to the market. You could counter your own upward pressure with your bid that way.

Using a method similar to that, the real estate customer get his own BTC immediately at a premium price. If the market is at 10$ and you sell the 111k BTC at 11$ each, you get enough money to play the market to get them back and pay the interests required. And what you're buying back, you can still sell them. After 15 days, you have 60 000 BTC available to move again to another customer. You can still sell them at a premium, giving you again enough money to buy them back and pay the interests.

Pirate profit was made on the sellers. If, for example, he use Mt. Gox to buy back some BTC, his profit was made on those sellers. Sellers who could have sell at 12$ were selling at 10.50$ because they jumped the walls on the market. Pirate only took those coins at 10.50$, made a big bundle of them, and sold them at 12$ each to some big investor.

Those numbers are coming from my ass. I don't have hard data to make precise calculation. I've use only the numbers to demonstrate my point. The "pirate" model is simply a way to trick the market into keeping some low price for higher valued goods. He simply took tons of under-valued Bitcoin and sold them at an higher price-point. What gave pirate BTC its value? The volume available.

The 500k BTC question is still: Was it this business pirate build? I don't know, I think so, but I can be wrong. Pirate scamming us is a possibility. But the model I've described is possible and CAN be done. That's the reason why I went with BTCST, it's the only business around here who tried something like that. A business model don't prevent scams or fraud, but it's not because you fraud that the business model is a fraud. A computer seller making scams, and saying that the business model of selling computers is a scam is TWO different things.

With this, I'm not interested in replying anymore. I've answered to you because you're a cool guy P4Man. But I'm sick of the personal attacks like 556j did. It seems I'm not worthy of having respect around here because I'm trying to explain a business model and how you could make money using it.

Greater Fool Theory.



When you invest in a unsustainable business, shit happens.

Yes you're mad. We know. With 20+ years life experience over most of us you still fell for the most basic of scams. Thanks for taking the role of laughing stock of the forums though.

....you don't say.....

Can you tell me more ?

Bitcoin services are so few and far between that it's easy for a scammer to insert themselves into an open market and make off with thousands.

THAT is the most insightful statement I have read yet......FINALLY a fresh idea 

I think that people wanted to belive that they where gonna earn a lot somehow.

Just that.

They wanted to belive.

It really wasn't. Tired of hearing that. Most reasonable people called bs&t for what it was the very first week it started taking deposits. Long-term members promoted it only for their own profit and should be ostracized for being the scamming trash they are. Brunic is one of the saddest shills on the forums. 2 years from now, with 0 payout, he will still be talking theories on how pirate was legit. The cancer needs chemo, not life support.

It's fair to say that EVERYONE will take a good kick to the nuts on this one....including the 'big' lenders.

Not that my opinion matters, but I think it can be salvaged (the Lending/Investment Market).

Pattrick is cocky, hashking is oddly-quiet and BurtW is cranky...lol.... but I still trust these 3 guys over any others.

This was quite clever actually. He built trust on #bitcoin-otc through a series of numerous relatively small BTC-USD trades, then leveraged that trust to convince people that he had a wildly profitable scheme doing the same thing on a much larger scale through RL contacts and that he needed BTC loans in order to make it work. From what I remember hearing, the first loans were relatively small and short-term, then he escalated to BTCS&T once he'd got everyone's trust.

It'll be interesting to see how many of those schemes can survive, because the rest of the Bitcoin lending market is nearly as shady as pirate. You remember Micon? His original thread wasn't just about BS&T but about all the similar investment opportunities in the Lending subform.

Well, Pirate has a problem then, doesnt he? Because if he gives the real estate guy 111K BTC, he still needs to get 111K BTC back for his lenders +7% per week.  To quote yourself: "you CAN'T buy that amount of BTC without skyrocketing the price."

This statement bothers me.... pirate *never* said it would last that long.