Topic: How Large is BTCST exposure? - page 2. (Read 10455 times)

thezerg is trying to come up with a non-ponzi explanation so I thought he might appreciate that info.

Like that means anything to the people who think he is a ponzi.

Pirate claims it is not illegal.

The 1st post in the BS&T thread says the investment is risky.  That is not in question.  The question was how to make $ without going fractional.  And I answered it.  You could go for months or even years without having anyone draw on the credit, without going fractional.

Dutchbrat:  yes. And it being something illegal or quasi illegal would explain why he can't get a fiat loan.  So as i said best case illegal worst case ponzi.

Disclosure: I have no positions in any of these...

Regardless, even lending money to such establishments wouldn't pay the sort of rates required.

giving a line of credit is not a very good example. once they take the credit the risk is there if they never return it.
then you only have a certain fraction of original btc left.

money cannot just sit there and make more money without some risk. if very little risk.. little reward.

Last thing I heard gambling houses are illegal pretty much everywhere in the US

Harmful ? NO 

Illegal?  YES

so giving a 'line of credit' to them is also illegal... Harmful NO

An example would be providing a "line of credit" to gambling houses so they don't have to hold a huge amount of BTC in reserve in case someone hits the jackpot.  So essentially, they pay you for the right to tap your BTC if needed (and fill it back later) but mostly your BTC just sits in an account.  Imagine lottery like odds and payout.  If the lender insists that the gambling houses check the size of your BTC account just before every bet you could even sell multiple lines of credit to different gambling houses (on the SAME BTC) since the likelihood of two jackpots hitting at the exact same time is nearly 0.  Or set up a simple protocol to guarantee it (allows someone to "reserve" the BTC for a few seconds during the actual bet then "release" it).

I don't think this is really happening in any legal business because 7% or even 1% a week is just too high.  None of these ideas explain why the lender wouldn't be getting fiat loans (or getting investors to get them) to maximize personal profits instead of borrowing people's BTC at these insane rates.  And the "risk" mitigation argument is just silly.  Any VC would jump all over this at a much lower profit then 1% a week.  So it is likely that the scheme cannot accept fiat or VC loans.  Conclusion: at best its not legal.  But if the lender put just a couple of BTC into his own scheme (I have to assume he's taking some personal profit above the payout %) it would have grown so fast he'd be retiring other investors at this point.  Possibly the lender IS doing this but demand for the loans are also growing exponentially.  This is very unlikely for a legitimate business with no media attention.  But these HYIPs are not retiring loans.  Conclusion: very likely ponzi, best case its illegal

Or that. He has implied that he works with cash...

Good luck proving him a liar, future "hacker"/"thief" victims.

Maybe he will say he converted it all to USD and was mugged in a back alley and they stole his suitcase full of cash?

He won't be able to claim that myriad exchange accounts were also hacked?

I should probably go ahead and edit the OP at this point, given that there has been two sets of interest payouts at 7% the values are now definitely on the low end (and they were already) - we're probably now talking at least 300,000 BTC exposure, ~$3.6 million 
Crazy.

how? by using your own money and doing it for the lulz?
really?

maybe you should explain so I can see how wrong i am. i missed your other post in another thread.

Of course you can.

i think you need to read his post again.
one cannot take in 1000 btc and pay interest on it without risking the 1000 btc in some way to make btc/money. once you do that
you only have a fraction of the original deposit in btc on hand.

See, you just confirmed my posting from some other thread, zero imagination.

If he's buying coins, that must mean he's holding USD. But all his deposits are in Bitcoins. So either he got the USD from magic or his Bitcoin deposits are fractionally reserved.

There is no reason this should be controversial. It is basically common sense that if you have deposits in a particular unit and you pay interest in that same unit, you cannot also have 100% reserves. The exception might be things that reproduce, like animals.

If you lend me $100 and I'm to pay you interest on that $100, I have to do something with that $100 other than store it.

Investment and a 100% reserve are mutually exclusive.

He is buying a lot of coins.
Wow, that was very difficult question

He already has. What do you think demand deposits bearing interest are? If he didn't do a fractional reserve, how could he pay you interest?

You're assuming he sold the bitcoins at a lower price. And that he's lending in USD. As it is, we have no evidence (well, I've seen none) of what he's doing with his deposits.
All I'm saying is, if you have debt with zero interest, you have all the time in the world to pay it back.