Topic: [Mpex.co] The Scientology of Bitcoin Finance? - page 14. (Read 27619 times)

As far as I know, every part of this scam is outlined in the contract. This does not make it any less of a scam, but a scam that users are accidentally agreeing to it.

Parts I found scammy/schemey:

- Main source if revenue directly related to the amount of noobs that can be recruited and made to pay the 30btc registration fee.

 - Bashes all other security exchanges yet is not even a real stock exchange and instead a gambling site.

- Other main source of revenue relies on a robots ability to predict the future where their users cannot. Unless this robot is in possesion of a magic 8-ball, it is doing nothing but gambling.

- No real value created. One guy loses money and one guy wins the other guys losses. Money is switching hands but never is value created like a normal business.

- nonfunctional securities. 2 securities for gambling sites, 1 for a video game dev (only source of creating value related to this scheme albeit very little value) and of course s.mpoe which gets its profits from recruiting noobs to pay the registration fee and hopefully gamble against the robot and lose.

- Website designed to mislead. Everything about the site reeks of bullshit. Designed to make you think you are "investing" in something legit but really you are throwing money away unless you are taking part in the scheme.

Point of this thread was to determine what mpex does and whether its profits come from actually creating value which has become clear is not the case.

The burden of proof rests on the accuser.  You can't just say "prove it's not a scam".

What evidence do you have to offer that it is a scam?

Can you point to any material lies or misrepresentations, breaches of contract, etc?

Just to lose it gambling few months later.

People made an enormous amount of bitcoin off of call options purchased on the site from January to April of 2013. If you ask people in the bitcoin-assets channel, they know. The site paid out 19,000 BTC on March options expiration.  That's probably the biggest hit any bitcoin financial product ever took without going under.

Here is the financial statement for March.  There are people out there that made an utter KILLING that month.  MP lost basically all the gains of the previous year.  Options were repriced shortly afterwards to more accurately reflect the tail risk volatility, and volume has fallen off dramatically.

http://trilema.com/2013/mpoe-march-2013-statement/

Yada yada yada yaaawwwwnnn. Is there anybody else here besides you?

Despite my better judgement warning me it is an utter waste of my time to respond to such ongoing flailings and desperate attempts to lower the tone of the conversation, on this occasion I will accept the invitation to explain the inherent idiocy of claiming to provide competent options market making services while never hedging options positions and never entering naked positions.

By definition, an options market maker is a guaranteed buyer, and a guaranteed seller. The market maker does not get to decide, in advance, whether they're going to be buying or selling, and the market maker does not get to use a crystal ball to tell them, in advance, what demands are going to be made either to buy or sell options or to deliver or to take delivery of the underlying.

As a result, any competent market maker -- who, being competent and all, is not going to introduce inordinate levels of counterparty risk -- continually adjusts positions both in cash and in the underlying entity which are sufficient to cover their obligations created by ongoing sales and purchases of options. That's in addition to ongoing adjustments to bids and asks across option chains so as to accommodate changes in the price of the underlying and fluctuations in demand for the options. In my original example, when they're short a call, they might ensure that short position is balanced by a long in the underlying -- and, notably, maintaining that long position, whose price moves inversely relative to the short position, is the very definition of hedging. To the extent the position is covered, it is hedged -- by definition. Someone who claims otherwise either does not understand the meaning of the words, or they hope that you don't.

(I'm simplifying quite a bit here. More generally speaking, options market makers keep a lid on directional risk, or delta risk, via a range of strategies, including using futures. They also keep a lid on risks associated with the other Greeks -- gamma, vega, and theta -- but we're dealing here with someone who claims to provide competent market making while ignoring the obvious delta.)

The types of adjustments I've just outlined explain why, generally speaking, competent market makers tend not to lose large amounts of money: a competent market maker is not merely gambling with a pot of underlying capital by buying and selling options willy-nilly, hoping to make a killing on the bid/ask spread. On the contrary: their entire operation is designed and delta hedged so as to avoid wild swings in the net value of their position and to provide a service which is both extremely reliable for market participants -- by virtue of continually ensuring their ability to deliver on their obligations -- and highly profitable to themselves.

Merely "having money" and providing a bit of options market making without a grasp of the basic mechanics of risk management in the activity does not make one a competent market maker; it makes one a gambler.

Merely "having money" and occasionally losing large sums while options market making does not make one a competent market maker; it makes one a source of counterparty risk.

The bottom line is that out in the real world of finance, a supposed market maker who not only failed to grasp the concept of delta-neutral hedging but actively promoted their lack of hedging activity as some sort of good thing would be laughed out of the room -- or more likely just ignored. Only here, where Bitcoin finance remains in its infancy, can someone swagger in without a clue about even basic delta hedging, point to a big bag of money, and attempt to browbeat and intimidate folks into thinking that that somehow implies they know what they're doing and can be relied upon as a safe counterparty.

via.

Split sides eagerly await your doubtlessly clever and well-grounded retort.

i think he needs the money to finish his sex change to finally become MPOE-PR


He's the Chelsea Manning of the Bitcoin world.

Until such time as you are capable of magicking up anything other than a fairly tale to explain how a competent options market maker can simultaneously never hedge option positions and never enter a naked option position, it will remain the case that the primary source of gross financial illiteracy being spewn all over innocent bystanders here is you.

The genuinely competent know when to acknowledge they've made a mistake. They also recognise when they've stepped over the boundary that separates healthy and even entertaining assertiveness from merely spewing logical incoherence and last-ditch defensiveness. It's a shame you seem to be blind to that boundary.

If you have some competence to show, and you'd like to take a stab at rescuing your previous assertions from logical incoherence, then have it it. If not, perhaps it would be worth considering whether all PR really is good PR after all -- or whether sometimes it actually matters whether you have something worthwhile to contribute.

It is not even worth 1 million. Your site is trash and a running joke in the bitcoin community. You are a clown.

Really? I'm not the one with a yellow ignore button. For those wondering it means he has been ignored by many trusted members.

Also you tell me to piss off in my own thread? I give you a chance to defend your "financial operation" but you either choose not to or you simply can't.

And I completely agree that it is a bad habit to imagine yourself at the center of the world. But seriously take a look in the mirror. Everything you have said revolved around how much superior you are to us simple minded folk and how your operation is the beating heart of bitcoin.

Get real.

I am asking you no such thing. It's a bad habit to imagine yourself at the center of the world. In day to day reality, MPEx is worth about a billion dollars and nobody gives a shit what you think on this, or any other topic.

But you are the one asking us to pay you 30btc for a service which we have no idea how it operates and how it creates revenue.

Or should we just take your word for it and fork over the 30btc, invest in s.mpoe, and see how it goes?

I can however say "none of your business, piss off" and expect you to do so.

More advertising your nonsense filled blog.

I will ask again. How do you make money? You can't just say "finance" and expect people to buy it.

This question is at the very least ancient. Is S.MPOE really worth that much ?! That was back in Dec 2012, and at the time,


Why annualize when you have monthly reports going back all the way to before anyone here had even heard of Bitcoin? Just add up the months.


And compared to pirate's bank or to what some guy dreamt while asleep among cockroaches and potato chips these other things you call stocks (but aren't in any way stocks) are also showing a very poor yield.

The important point to understand here is that yields are whatever they are, and promises of variously packaged scams cannot be compared with what the yields are, or be part of a discussion of yields. What happens on MPEx is Bitcoin finance. What happens everywhere and anywhere else is pure gemology.

I can appreciate that to a multitude of financially illiterate folk (such as for instance Dr. BombyHead above) the difference is invisible. That's fine, but it also does not make the difference go away.

You might not consider this a scam but I and many others do. When your main source of revenue is from your users "stupidity" you know you are not running a legit operation.

Considering mr popescu spends all his time recruiting new users and blog viewers I am still going to stick with my first conclusion that this is nothing but a scam/scheme.

Those fees are income and are paid as dividends. Provided all the income is legitimate and is paid away after expenses there's nothing about it thats a scam.

The fact that some people are willing to pay 97x earnings is not a scam it's stupidity, but the market price is not determined by the operator, but by the buyers/sellers.

I cannot believe I'm defending them given how much abuse their PR throws out, but nevertheless I do seem to be..... !