Topic: nope.avi (Read 10378 times)

Its probably because he is trying to scam more coins.  He stole 15 btcs from me.

So if I understand your explanation, it would work like this:

Ten depositors each deposit 10 BTC (100 BTC total).

You loan out 80 BTC to 5 borrowers (10 BTC, 12, BTC, 15 BTC, 18 BTC, 25 BTC), keeping 20 BTC in reserve.

At some point during the week, 2 depositors change their mind and decide to withdraw their entire deposit (I assume they don't get any interest for the few days that you held their money).  Their initial deposit allowed you to lend out more money, but they get 100% of their deposit back risk free.

At this point the reserves are 0.

3 borrowers (10 BTC, 12 BTC, and 18 BTC) pay back their loans early.  You now have 30 BTC (plus interest) in reserve.

You take your 30% from the interest.

Having seen how the reserves previously disappeared, at the end of the week 3 depositors get spooked, and withdraw their deposit and their share of the interest earned.

The reserves are now just 27.14% of the interest paid so far, which will need to be split between 5 depositors.

The 18 BTC borrower pays back a day late, and the 25 BTC borrower disappears having given you false credentials.

You take your 30% from the interest paid, and since you don't share in the losses, you take 30% of what should have been the interest of the defaulted borrower from the repaid principal of the 18 BTC borrower.

The last 5 depositors each get a bit less than 3.6 BTC.

So the week starts with 10 depositors at 10 BTC each, and ends with 2 depositors breaking even, 3 depositors making a very small amount of money, and 5 depositors taking a significant loss.

Sorry, I'm not interested.  You mention "stocks", but claim you are offering "deposit accounts".  My deposit accounts at a bank are all guaranteed not to lose principal.

It sounds more like you are selling stock in your short term loan company to raise capital than offering deposit accounts.  I'm not impressed enough with your business plan nor your business talent to risk investing in the company.  To much risk, not enough reward.

https://bitcointalksearch.org/topic/scammer-trade-fortress-126588

I was scammed by this guy.  Everyone be careful.

No, I'm completely unaffiliated with bitzino, I just advertise it in my sig

Does this have anything to do with your sig?

Great questions!

1. No, I am not obligated* to cover 30% of the losses. When you buy stocks and pay the brokerage fee, does your broker cover your losses when your stocks lose value?
*I pay fully for mistakes I make - eg sending to the wrong address, negligence in checking when offering loans, etc.
However, I do have significant reasons for me to do my best to ensure that losses are minimized - confidence will be lost, which means less deposits & less fees for me. In addition, I am directly impacted by the loss as I currently have 10BTC in an account.

2. Yes. This isn't what you'll traditionally find on this board where someone opaquely offers X% a week, doesn't give you details on exactly how your coins are spent, and probably crashes / defaults within 180-360 days. Because the rates are variable, there wouldn't be a situation where I am offering higher interest than what I can afford. This makes it more stable compared to constant offerings Example:

Let's say you deposit coins into X's bank at 2% weekly. X needs to get greater than 2% returns to make a profit. X is encouraged to have as few coins sitting idle as possible and give out loans with low criteria.

3. Depositors can withdraw their balance (which actually exists in the system, by the way - this is a verifiable non-ponzi, your interest is directly from the loans issued) when there is reserve to cover the withdraw. When reserves reach 0, I'm committed to paying people instead of getting more loans, but you may have to wait until reserves mature. Tip: Let me know ahead of time and you shouldn't have difficulties. Anyway, you will be still getting interest in your account.

I'm confident that over a long period of time, this bank will offer the high interest rates with the lowest risk. What if you absolutely need stable X%/week interest, bond style (despite that if you average out over some time you'll get that much?) People can offer passthroughs to my depositing service, where they take on the week to week variance.

You state that you keep 30% of the profits as a fee, do you also share in 30% of the losses if several borrowers suddenly default?  Can we expect a negative rate of return (loss of principal) when/if borrowers default, or are you guaranteeing the principal even if you have to cover losses with your own money?

Will depositors be allowed to withdraw any/all of their balance so long as there is enough in the reserve to cover the withdrawal, or will you postpone withdrawals when the reserves fall below a particular level?

Hi Gerco, thanks for your reply. When I look at if I should give a loan to someone, I consider various factors such as:

* Is it worth it for them to default on the loan? Would the gain be bigger than the consequences?

* Are they able to pay the loan back? Do they have a job, mining / other income, items to sell?

* Are they able to purchase the bitcoins to pay the loan back? Is this their first time buying bitcoins?

* Are they reluctant to give out personal info? Are they happy to give out passport scans freely (indicating that it might be a stolen identity)? What's the metadata behind those photos?

More importantly however, look at intent behind the borrowers. What's their forum posting history? Do they post in specific threads in the Securities section? If yes, they probably own shares of that stock. Have they made successful trades selling or buying goods before? Are they borrowing the bitcoins to make a quick cash or are they actually going to use the loan for the intended purpose?

I also look at number of things when deciding to give someone another loan or not. One thing is simply looking at how they paid me back by looking at the blockchain. There are a lot others, like looking at their posting history and see if they're only active when they seek out new loans.

Hopefully after reading this you have a bigger insight into the thought process of when I give out loans. It's not everything, and I'm not saying this  This service also provides a number of other advantages on top of what you mentioned:

1. Reduced variance.
2. Wallet security (2 factor auth, secure wallet backups)
3. Adjusting market-based interest rates.
4. Better loans - the economics of scale.
5. The time investment - no need to spend time looking for & checking borrowers, that's my job.

Regarding my identity: I ask for ID documents to borrowers, privately, and I am happy to disclose my identity to depositors privately (assuming you're putting in a large amount, not 1 bitcoin). You can verify it with whois of my domains, etc. Any long term offer that doesn't do that is a hypocrite. Regardless, the spreadsheet is out for everyone to see. There's an actual business (offering loans) behind this, and it's easily verifiable that it's not a ponzi.

EDIT: Just pasted the original post ("contract") onto pastebin: http://pastebin.com/mYVKwe0a

Signature from the main address of 1N1HvopM4Q5Kedokq3nXyDEzxmWqe9GupE:

G1LZJNixHqM/ss1XwJf+f0kI7mzU5vLqPEWjW9cyg2T8g1/7QVO4iYcK98BTq1JFlG9wpF/zdPLMEuVyaTf+YeM=

I think your service would be a valuable one, provided that you are at least 30% better at choosing borrowers than your customers are. Do you have anything that may convince me/us of that and would you be willing to GPG sign a contract with the above terms with your OTC GPG key (with your real identity would be better, but I have no clue how to get that done... anyone?)

I've just deposited 10 BTC in my own account. Note that there will be no preferential treatment - interest will be given to everyone equally. I've also lent 10 BTC to ThaddeusB, a Wikipedia administrator who has being user their account since 2008.

Reserved.

Some Infrequently Asked Questions

1. What if you get into a car accident?
Well, I wouldn't be very happy! If I die, poop. Currently I have evaluated the risks of giving access details to a friend / family member, but I feel there's the risk of them stealing the coins. So at the moment I'm the only one who has access, and if I'm unable to continue for some reason your coins are lost. Hopefully that doesn't happen

If this gets large enough, maybe bitcointalk.org moderators would be willing to obtain and store blockchain.info passwords and pay out in case I don't sign in for a while, and I'll pay them a fee? Doesn't have to be moderators, just some VERY trustworthy community members.

What's this?
This is essentially a bank. I loan out your coins to other people on bitcointalk, on bitcoinjam, over irc, etc. I'll do my research on the borrowers, and the loans will be highly diversified.

Want to deposit? Just skip down to the bottom of the post.

Why deposit instead of loaning my coins out myself?
1. You might not have enough coins to lend to someone who wants a lot.

2. Your loans offered won't be diversified enough if it is on the forum. Let's say there's a 1% chance that this trustworthy person is going to default, but you're going to loan to him anyway. Your first loan could result you in losing 100%. if you deposited it here, then everyone would have lost a tiny bit in interest earnings (but most likely will still watch their coins grow with interest).

3. You don't have to time to hunt for loans, before some other lender goes "Sent!". Time is money

What's the interest rate?
It's variable and depends on the interest rate I get! If the total amount deposited is 100BTC, and I lend out 30BTC @ 7% paid back and 60BTC @ 5% paid back (all weekly loans), then the weekly variable interest rate for depositors will be 3.1% (before fees).

How do I know you're not going to run away with the coins?
Well, I can't really run off! The majority of coins deposited will be lent out at any given time. A reserve is kept limbo for withdraws (hurr durr fractional reserve banking), some is kept so I can always offer new loans. I will publish a public spreadsheet log.

What if you don't have enough coins to make a withdraw?
You'd have to wait. Unless everyone I lent defaults, you'll still get your coins (+ interest for as long as it stays with me!), just perhaps a while later than when you made the withdraw if my "hot wallet" funds have run out and I need to wait for loans to mature.

What if the loans you offer defaults?
First of all, I'm not going to invest your coins in high risk lenders. I ask for photo + drivers license / id + address for most offers. I analyze each user's history, reputation and posting. I also have a few tricks up my sleeve. For example, take SynOps. I'm pretty confident that he's running a ponzi and is going to bail out with the coins, but I lent to him regardless. Wanna know why? Because he's seeking various loans on BTCJam that has being given coins above what I lent him. He's not going to default on my loan when I'll ruin his rep and prevent him from making out more if he paid me back. That's just one of the methods I employ.

I also know a few trustworthy and reliable people that seeks longer term loans for businesses & etc. They generally have less interest than normal in the BTC world, but I trust them.

Fees / What's the catch?
The interest rate given to to depositors will be 70% of total (I take 30% for running this service. It's not that much honestly, better than having your coins sit and do nothing). This rate may be amended at any time, but you can always withdraw.

I'll process withdraws weekly (the same time when I calculate interest, so if you want to withdraw all make sure to specify it otherwise you'd still have interest saved), for 0.1BTC (takes me time). If you want instant (as in as soon as I'm online, basically daily) withdraws, 1BTC fee or 1% whichever is higher. Instant withdraws may not be always available in the reserve.

Spreadsheets?
Here's the spreadsheet! https://docs.google.com/spreadsheet/ccc?key=0AnQyVAskGw8xdFREc2FLeWRNUFZ6bEhyNTRaMGlVMXc
Feel free to audit it.

But what about the Great Bank Collapse when pirateat40 crashed?
Pretty much every single bank at that point held deposits in pirateat40, either directly or indirectly. Therefore, when the infamous ponzi collapsed, all the banks did too. Some are trying to make repayments, but this isn't a risk right now because pirateat40 is gone, and there is no major ponzis. I'm also going to do my best to make sure that I do not issue any loans that will be used in HYIPs / ponzis / gambling, etc.

So how do I deposit?
Send me a PM, and I'll send you an address. That address will be your deposit address, and if you want to deposit more coins just send it there AND PM me.

So how do I withdraw?
Send me a PM, and tell me how much. Interest is calculated at time of deposit, so don't expect to deposit coins 1 hour before the weekly payout interval and expect the full interest.

When is interest calculated
Every Sunday, Australian time. Interest is compounded weekly.