How to Identify a Ponzi - page 7. | Bitcointalksearch.org

zyk

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oh my

is this all breathtaking....decision time is near....9 days pirate said....still...Vladimir and Vandroi disappeared from the scenery

Is everything still dissolvable without destroying OTC Ratings.....pirate still stands up to his word...is this even possible?

@Vandroi, Vladimir-----where are you? right now shouting Shocked

i told you so Shocked

would be so much appreciated as a further drawing

of the disolution scenario could make you the oracle heros!

Cheers Zyk

ninjarobot

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Mine Silent, Mine Deep

I liked this recent NPR article on how to identify ponzi's:

http://www.npr.org/blogs/money/2012/07/30/157606305/four-signs-your-awesome-investment-may-actually-be-a-ponzi-scheme

1. High return! Low risk!
2. Where does the money come from? It's complicated.
3. It's illegal, but it's safe.
4. They don't even want your money.

Snippet:

Quote

Ponzi schemers often feign reluctance to take an investor's money, which can defuse any suspicions. They also invoke safe-sounding words, like "bank," "securities exchange," "voucher, "guarantee," or "full faith and credit," and call their investments "trusts" or "trust units." Many foster friendships and even romantic relationships with their marks, and market their investments through the houses of worship they attend themselves.

In the end, Frankel writes, "con artists remind us of honest people. They are similar to entrepreneurs, eternally and unshakably optimistic, and they act like (and are) gifted salespeople."

nrd525

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I added the book recommendations.

I added Vladimir's resources (sorry I missed your thread when I posted mine!)

I didn't add the time period for calculating interest. Calculating interest on a monthly or weekly basis might just be the same root cause as having high interest rates and not its own cause. Most legitimate business is done using Annual Percentage Rate (APR). Payday loans are an exception.

ripper234

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Ron Gross

No.

Vladimir

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Quote from: ripper234 on August 16, 2012, 11:59:16 PM

Quote from: Vladimir on August 16, 2012, 08:19:04 PM

Quote from: ripper234 on August 16, 2012, 01:25:52 AM

- Pass-through schemes are not ponzis ... they are very upfront about what they do. (That is, unless their issuer has a separate intention of disappearing/defaulting ... but if Pirate defaults, they are not Ponzis).

- Insured accounts are most likely not ponzis (some are less likely than others).

If BullShit & Trust, is a ponzi: PPT's are effectively all ponzies as well.

Wrong.

The definition of Ponzi include lying to your cusotmers. PPTs (I assume) don't lie.
Rather, they're being very open about their default conditions.

Proxy or no proxy, they are not Ponzis. If I invested with one of them and Pirate defaulted, I would be angry (+ press chargers) at Pirate, not at the one selling me the PPT.

Have you learned this little trick from Mavrodi?

ripper234

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Ron Gross

Quote from: Vladimir on August 16, 2012, 08:19:04 PM

Quote from: ripper234 on August 16, 2012, 01:25:52 AM

- Pass-through schemes are not ponzis ... they are very upfront about what they do. (That is, unless their issuer has a separate intention of disappearing/defaulting ... but if Pirate defaults, they are not Ponzis).

- Insured accounts are most likely not ponzis (some are less likely than others).

If BullShit & Trust, is a ponzi: PPT's are effectively all ponzies as well.

Wrong.

The definition of Ponzi include lying to your cusotmers. PPTs (I assume) don't lie.
Rather, they're being very open about their default conditions.

Proxy or no proxy, they are not Ponzis. If I invested with one of them and Pirate defaulted, I would be angry (+ press charges) at Pirate, not at the one selling me the PPT.

Vladimir

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-

Quote from: ripper234 on August 16, 2012, 01:25:52 AM

- Pass-through schemes are not ponzis ... they are very upfront about what they do. (That is, unless their issuer has a separate intention of disappearing/defaulting ... but if Pirate defaults, they are not Ponzis).

- Insured accounts are most likely not ponzis (some are less likely than others).

If BullShit & Trust, is a ponzi: PPT's are effectively all ponzies as well. They are all then proxies for a fraud (participants of a criminal enterprise, co-conspirators) with some lipstick put on the pig. Those people who operate effectively investment funds and "savings account", ought to know better and recognize where they are funneling other people's funds into. They are as guilty as the ponzi operator himself. Some of such PPT operators even pretend that they are acting ethically. The question is more like whether they are acting criminally. People who allow such ponzi promotion on their websites are to some degree complicit in fraud, marketplaces that allow trading of such instruments are to some significant degree complicit as well. People who have any kind of income derived from a fraud and who promote such fraud are complicit in perpetuation of the fraud.

Even if the above is not true from point of view of some specific law in some specific jurisdiction, the above is certainly the case from point of view of anyone with even some modicum of Ethics.

totaleclipseofthebank

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What I think of BTC HYIPs:

Maybe mythology can teach us a lesson here!

Vladimir

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-

https://bitcointalksearch.org/topic/how-to-recognise-a-ponzi-scheme-91643

ripper234

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Ron Gross

P.S.

I think having this thread as a sticky is a good thing.

People should think very carefully before investing with some of the lenders advertised here. But I will not make the leap of calling them Ponzis.

- Bitcoin Saving & Trust may be a Ponzi (I wouldn't care to name the odds for this, I have too little information).

- Pass-through schemes are not ponzis ... they are very upfront about what they do. (That is, unless their issuer has a separate intention of disappearing/defaulting ... but if Pirate defaults, they are not Ponzis).

- Insured accounts are most likely not ponzis (some are less likely than others).

ripper234

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Ron Gross

Quote from: hgmichna on August 15, 2012, 04:05:36 PM

Quote from: PatrickHarnett on August 15, 2012, 02:13:48 PM

I'll disagree with that for two reasons. …

My remark was written for the person who asked, not for crooks that are part of an ongoing Ponzi scheme, which, notably, quotes its interest by the week.

To the best of my judgement, Patrick Harnett is not operating a ponzi scheme (and I have some BTC riding on that conjecture).

Here is my reasoning.

ripper234

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Ron Gross

Quote from: hgmichna on August 15, 2012, 01:59:16 PM

I would add that quoting interest rates weekly or monthly, rather than the proper annual rate, is a sure sign of an illicit scheme. It aims at very inexperienced investors.

It is not, at least not in this case.

Bitcoin is super volatile, and so are business models built upon it.
Nobody can guarantee a yearly interest rate in Bitcoin loans, a weekly rate makes much more sense in this case, since the rates change frequently.

Vladimir

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-

Quote from: PatrickHarnett on August 15, 2012, 02:13:48 PM

2: The APR system used in the USA is a very poor indicator that is quite confusing and misleading for non-US people - took me ages to work it out, and it is terrible.

True.

US version of APR is simply ridiculous. UK version of APR is much more reasonable as it takes in account compound interest. In case of pirate it could be the difference between ~300 and ~3000 APR between US and UK version. Less confusing would be using AER. See this http://en.wikipedia.org/wiki/Annual_percentage_rate for details.

PatrickHarnett

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Quote from: hgmichna on August 15, 2012, 04:05:36 PM

Quote from: PatrickHarnett on August 15, 2012, 02:13:48 PM

I'll disagree with that for two reasons. …

My remark was written for the person who asked, not for crooks that are part of an ongoing Ponzi scheme, which, notably, quotes its interest by the week.

I was actually referring to the rates often quoted for loans to members, a practice established before deposit taking was the norm.

I would also like to clarify if you comment is an accusation that I am a criminal?

hgmichna

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Quote from: PatrickHarnett on August 15, 2012, 02:13:48 PM

I'll disagree with that for two reasons. …

My remark was written for the person who asked, not for crooks that are part of an ongoing Ponzi scheme, which, notably, quotes its interest by the week.

ErebusBat

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I am the one who knocks

Quote from: PatrickHarnett on August 15, 2012, 02:13:48 PM

Quote from: hgmichna on August 15, 2012, 01:59:16 PM

Quote from: nrd525 on August 14, 2012, 12:29:01 PM

I'm interested in developing a list of questions/variables that are associated with Ponzis.

Here is my short list. Please add items to this list and I'll edit the post.

Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common. ...

I would add that quoting interest rates weekly or monthly, rather than the proper annual rate, is a sure sign of an illicit scheme. It aims at very inexperienced investors.

I'll disagree with that for two reasons.

1: Most of the loans are denominated in weekly or monthly rates and the way bitcoin works, an annual rate is less meaningful. People don't look for 12-month instruments, 4 or 10 weeks is heaps (months are still like years).
2: The APR system used in the USA is a very poor indicator that is quite confusing and misleading for non-US people - took me ages to work it out, and it is terrible.

In the WPW I settled on a one month equivalent rate to rank the interest or return being paid. Over one year, the difference between compounders and weekly payers would be huge.

^^^ That.... bitcoin is not (currently) like mainstream financial markets.

PatrickHarnett

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Quote from: hgmichna on August 15, 2012, 01:59:16 PM

Quote from: nrd525 on August 14, 2012, 12:29:01 PM

I'm interested in developing a list of questions/variables that are associated with Ponzis.

Here is my short list. Please add items to this list and I'll edit the post.

Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common. ...

I would add that quoting interest rates weekly or monthly, rather than the proper annual rate, is a sure sign of an illicit scheme. It aims at very inexperienced investors.

I'll disagree with that for two reasons.

1: Most of the loans are denominated in weekly or monthly rates and the way bitcoin works, an annual rate is less meaningful. People don't look for 12-month instruments, 4 or 10 weeks is heaps (months are still like years).
2: The APR system used in the USA is a very poor indicator that is quite confusing and misleading for non-US people - took me ages to work it out, and it is terrible.

In the WPW I settled on a one month equivalent rate to rank the interest or return being paid. Over one year, the difference between compounders and weekly payers would be huge.

hgmichna

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Activity: 695

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Quote from: nrd525 on August 14, 2012, 12:29:01 PM

I'm interested in developing a list of questions/variables that are associated with Ponzis.

Here is my short list. Please add items to this list and I'll edit the post.

Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common. ...

I would add that quoting interest rates weekly or monthly, rather than the proper annual rate, is a sure sign of an illicit scheme. It aims at very inexperienced investors.

John (John K.)

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Away on an extended break

Quote from: fabrizziop on August 15, 2012, 07:15:34 AM

Quote from: dust on August 15, 2012, 12:10:22 AM

Quote from: Valalvax on August 14, 2012, 10:27:42 PM

Quote from: nrd525 on August 14, 2012, 12:29:01 PM

Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common.

So basically what you're saying is nearly every single Bitcoin investment/loan/offer is a ponzi, because I don't think there are many at all that offer less than 50% a year

These indicators are just things to look out for when investing. Investments that fit multiple indicators have an increased risk of being a ponzi.

Exactly. You see Starfish BCB. They offer about 70% APR, but you see the full report on lending status/defaults/earnings, making it to me a safe investment.

This +1.
The lack of transparency should be added to the list too.

fabrizziop

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Quote from: dust on August 15, 2012, 12:10:22 AM

Quote from: Valalvax on August 14, 2012, 10:27:42 PM

Quote from: nrd525 on August 14, 2012, 12:29:01 PM

Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common.

So basically what you're saying is nearly every single Bitcoin investment/loan/offer is a ponzi, because I don't think there are many at all that offer less than 50% a year

These indicators are just things to look out for when investing. Investments that fit multiple indicators have an increased risk of being a ponzi.

Exactly. You see Starfish BCB. They offer about 70% APR, but you see the full report on lending status/defaults/earnings, making it to me a safe investment.

Topic: How to Identify a Ponzi - page 7. (Read 131731 times)