Topic: Putting your money where Pirate's mouth is. - page 38. (Read 73398 times)

But I can.  Find a trusted escrow and Ill bet you anything you put in it.

Math fail.

There's no 33x anything since there's no reinvestment. I've updated the post with an example.

For a sane player to take the bet against me, the anti-pirate bond must be 27 times larger than the pro-pirate bond. This is what I meant.

Give it up. You just can't build a logic instrument on bullshit assumptions. Anything involving BS&T and a time-frame of one year or above inserts the fact that believers can multiply their money with a factor of roughly 33 instead of playing. Of course we can't beat that!

The risk is worse on the Pro Pirate side. On the anti Pirate side, much less. Is this what you meant?

No, you get your principal plus 50% of whatever interest is paid. You only risk what interest you could have gotten for the life of the bond.

Sorry for double-post, but this is actually a new one:

I just noticed the odds between the bonds you proposed will be absurd. The 50% interest loss is enormous. The people believing BS&T will yield 7% for a year would get a factor 33 out of their money or something, remember? With half of that accumulating, it's only 6 or so.

I would have to do 27:1.

It doesn't work. It just all goes haywire on these time-scales. That's just the thing, nothing ever works if you assume an exponential money-making machine.

Meh. Chances are the current flamewar kills BS&T, and I get nothing, or half of a week's interest or something. Just because I name long time-frames doesn't mean I'm astonished if he runs tomorrow. These are just for tail risks or Pirateat40 personally changing the schedule to get back at me or something.



How about I just make a bond that pays a little above BS&T interest but does not pass-through and has a little withdrawal delay? When he defaults, I just do the same as him: take all deposited funds and walk off. The difference is that I'm honest about it.

I will have to follow the Ponzi rules, so I am allowed to do forced withdrawals and apply limits just like him. That way, I can time myself against his expected default schedule without going bankrupt too fast. If I can't afford it anymore, I'll have to force withdraw everyone.

Oh, did I just explain why he does that again? My bad.

Again, I can't do it on a super-large scale because Pirateat is watching and may take on extreme measures to take me out and then obtain the funds from this.

I was thinking this is the way to do it. Make someone from each side donate the 16btc first

After just having read this I propose a couple of 'bond' type securities to allow people to express their opinion one way or the other.

Start two securities (I can't see any other public way to do this, since betsofbitcoin doesn't seem to have gotten much traction). One will be a Pirate pass-through, the other will be a pass through to a more low risk investment. I know something similar has been attempted before, but perhaps it's time to try again.

Pro Pirate Bond: Coins invested in the Pro Pirate Bond are invested with Pirate, at whatever the current rate is. Any interest obtained will be moved to an escrow service.

Pirate Default Bond: Coins invested in the Pirate Default Bond do not increase in value.

Investment coins from the Pirate Default Bond and interest payments for the Pro Pirate Bond obtained will remain in the GLBSE accounts or be moved to an escrow service if trust in GLBSE is not sufficiently high.

In both cases, one coupon will be paid on the expiry of the bond. The bond will expire in one year, or when Pirate defaults, or when Pirate ends his business without defaulting.

If Pirate defaults: the 50% of the BS&T interest payments will go to each bond. 50% of the BS&T interest payments or the average interest rate at the PPT, whichever is lower, will go to the Pirate default bond. The remaining amount will go to the pro Pirate bond.

If Pirate does not default within one year: interest payments pay the Pro Pirate coupon, and the Pirate Default bond simply receives their initial investment back.

If you're pro Pirate, then you'll either have a interest plus your principal, or just half the interest and no principal.
If you assume Pirate will default within a year, you'll either have your principal back and no interest, or your principal back and and half the interest.

Example: 100 coins of the Pirate default bond are bought and 110 coins of the pro Pirate bond, and the average interest paid is 6%:

If Pirate does not default, interest accumulated = 110*0.06 *52 = 343.2, since it's not being re invested.
Pirate default bond pays 100 coins to its investors.
Pro Pirate bond pays 110 + 343.2 = 453.2 coins to its investors

If Pirate defaults in 6 months, interest accumulated = 110*0.06 *26 = 171.6.
Pirate default bond pays 100  coins + half the Pro Pirate bond interest =  85.8 coins (since this is less than 100*0.06 *26).
Pro Pirate bond pays the remaining 85.8 coins to it's investors.

In this way there's risk and reward on both sides. But is it fair?

Opinions please people?