Topic: Reason for current Bitcoin crash - page 2. (Read 9577 times)

Bitcoin is limited. Therefore more people using it = higher price per bitcoin. This is exactly why the price will go up (by enormous factors) in the long term, regardless of any temporary spikes and drops (which are just incidental market hype and panic movements).

The prize could also go down. Too many people know about bitcoin and using it. It's not a geek only 'currency' anymore. so there are a lot of stupid people using it.

Yeah, I hope that people will come to their senses and with banks open for trade, the market will liven up. I repeat : there is no reason to sell bitcoins this cheap. Even if Pirate runs away with the investments, it's just that their owner has changed (since their previous owners were idiots). Nothing changes for the rest of us. The concept still works.

But anyway. To get back to the topic: The rate seems to be currently 'stabilized' by about $8 within the last few hours. The banks in china will be open very soon. So a rate change will coming very soon again.

7% change per week is not uncommon. However, the price has been rising since May. Until then, it has been pretty flat. Therefore pirate's profits couldn't be sustainable merely from changes in the price.

Ironically, you are right - it doesn't.

I'm afraid market doesn't work like this. If you start dumping your btc, the price would start falling. You would get less and less money with each sold 'bundle' of bitcoins. Then, you would start buying and the price would increase. In the end, your balance would be aproximately the same.

This is exactly how ponzi scheme does NOT work. When you announce 50% return per week nobody believes you. Naturally. And when you finally find a lunatic who gives it a try, it's only a little investment. People are cautious ... at first. If you run away, you only get a bunch of bitcoins. If you want a really big loot, you have to build trust. Let them make profits from their first, small investments. Then they give more and more and they persuade their friends to invest too. Do you think pirate got his incredibly huge investments over night? Hell, no. It took him several months to build his investment base. And he paid the early investors from deposits of latter investors and so on. You know, this kind of scam is also called a 'pyramid game' in my native language. It is a very self-explanatory title. Imagine a pyramid. Your first investment is on the top. You pay the profit from the deposits of the line below (say two or three new investments), then when these investments mature you pay them from deposits of the line under them and so on. By the time you reach the bottom, you have a shitload of money. But you can no longer find new investors and the old ones have already invested everything they could. That's when the pyramid collapses. This is a very common scam. If you search 'ponzi scheme' on wikipedia, you'll find out that this has been done many, many times in all parts of the world during history. People have been falling for this type of scam for centuries. Some of them even more than once in their liftime! It's both terrifying and amusing.

I assure you that I'm not a pirate investor. I would be one if I had the chance to invest in the begining. Because only early investors profit from ponzi schemes. However, I sincerely hope you are right and Pirate SOMEHOW pays the money to his investors only to let the pyramid collapse later. This time, I will be ready.

We do not need banks but some people would like to have their coins within a 'bank'. Then it's a matter of trust and yes the printing money isn't directly an issue but if a bitcoin bank have a huge amount of coins investors like the fed will be interested in that bank. But all this isn't a problem of bitcoin. It's a problem of our system. Bitcoin isn't the solution for our corrupted system. It's just a step in the right direction.

well a keynesian would say this is why we need banks like the federal reserve. That way there is a bank to buy up all these bitcoins and prevent inflation. And when the prices start to go up; is there to print more coins to make sure you can feed your kids.

I had this idea that people were able to grab all their coins from pirate thus lots of coins are being distributed and maybe the reason why it crashed.

on the other hand... it might be the opposite... not really a math guy... but I hope it goes back up soon.. i invested around 2weeks of my time in bitcoin... and I kinda like the concept...

I just hope it can stand back up again...

It doesn't really matters how he did it and if he will pay back or not. He will win anyway and that's because too many people trusted him and so made him one of the biggest bitcoin holders and we all know that people having a lot of items from any market are able to 'manipulate' it. The decentralization simply make it easier to manipulate the prizes. As long as there are exchanges with FIAT currencies it's the same bullshit than with any FIAT currency. Do you really believe that the US government isn't interested in bitcoin? They can profit a lot from the market because they simply print some USD, by BTC provide services like that pirate story and crash it all down.

no I am a poor student, could never afford invest even close to his buy in. like 1000btc, 10kusd you kidding me?

I am into math, And I know 7pct week is an insanely lucrative investment in the banker world. But when you think about it 7pct change in price for bitcoins is common.

If he took your 1000btc investment and cashed it out to USD. If at the end of the week there happens to be a 7pct decrease in price he buys and payed you back without doing anything. anything more then 7pct he profits.

Im am simply saying it doesn't take a genius in economics to understand how these market works and profit.

Pitate40 controlls large amounts of usd and btc. He needs to payout a very large amount of btc he probally doesnt have. If I were him id dump enough to crash the price then buy enough to cover the payouts.

Its really all about the Ego of Pirate; Everyone in the market is now gossiping on him. Will he payout his investors? And a lot of people are like you and say of coarse he can't, and when these investors sell coins to cover there losses, or pirate himself dumps all the BTC price is going to crash. So you sell and crash the price before he even moves.

Does he want to go down in history as a good pirate, or a stab you in the back pirate. I think he has far more to gain long term if he does payout. And the way the Market looks like he might be able to pull it off.

Because hey, why would some one say, im going to pay you, then cut and run. If I were an evil pirate I would have a huge firesale, like a 50pct return on single week. then cut and run on day 2.

But maybe you are a pirate investor and want people to freak out. droping the price in hope pirate can buy enough btc to pay you back. 

Well, then let me assume some more. I assume that you are one of the people who invested with pirateat40 and that is the reason for your rather naive post. Am I right?

Furthermore, let me assume that you aren't into mathematics. If you were, you could easily calculate that pirate would soon need more bitcoins that can be possibly generated to make his 'business model' sustainable. You can read the general discussion. Some people have already calculated that for you.

Finally, I assume, that you have no idea what pirate's business model is. How can he possibly generate 7% profit every damn week? Do you realize that with such business model he could easily get money elsewhere? He would become a billionaire in no time and probably get the Nobel Prize in economics.

Am I right with my assumptions?

You are assuming too much. There is no reason to call him a scammer. He has not "scammed" anyone. Like I just said earlier he has never missed a payout. He has a microscope on his every move.

If he keep his promises and pays out all his investors you will eat your words. He just ran one of the most successful investment banks bitcoin has ever had.  

or he cuts and runs and everyone points and laffs at investors with the biggest I told you so ever.


The interesting thing about about bitcoin is we can watch all these really large accounts.

Now realize this. If he doesn't have the BTC to cover his investors whats the only way to get it? Buy

And if he has a limited cash funds to payout to cover the investors the only way he can make this whole bank work is if he can buy them cheap enough.

There is a price when Pirate40 can cover his payouts and he is waiting to hit that before he buys and covers all his payouts and still walks away with a ton of money.


Im actually willing to bet he will be successful.
Im going to look on betsofBTC.com now and look for that lol.

No, it's not a funny thing. Actually it's the usual modus operandi for ponzi scammers. In the begining everybody is cautious, only a few people invest some little money. You give them huge profits (compared to small investments) and their greed makes them invest more and more. Soon other people see how their friends are getting rich and they get envious and greedy too. So they invest, despite the fact that it is a blatant ponzi scheme.

In the general discussion, there was a link to an article about a major ponzi scheme on some online game. It was brilliant. It depicts the simple mechanism of ponzi schemes. Everyone should read that. And those who fell for pirate should read it twice daily : when they get up from bed and when they go to sleep.

Yeah, a crash of this magnitude set off because people fell into a ponzi scheme is not good press for bitcoin. 

It's easier to get the people trust if you provide the service as legit from the start. As soon as enough money is sitting in all the accounts the owner will think about 'stealing' all that money. It doesn't matter what the service was about and how he did it. All that counts is the amount of coins got 'stolen' (or better said 'taken' by the project owner). A lot of the people think that it's a problem within Bitcoin itself instead of knowing that it's just that one 3rd party and so the crash of the rate is a logical event. The most of the people still just don't get what it is all about and never will. So those who understand it can profit from the market.

I've been watching this pirate thing for a while and I didn't really understand how people could be so incredibly stupid. They use bitcoins to escape government bullshit and whatnot, yet they happily run right into scammer's hands. It was a clear and blatant ponzi scheme and the current situation is really disappointing. Even more, when I realize that although I didn't fall for pirate's bullshit, the value of my assets in bitcoins falls rapidly anyway due to the situation on the market.

Now I only hope the panick doesn't last too long and the community wakes up from its 'momentary lapse of reason'. There is no reason why people should sell all their bitcoins for such low prices. If everyone realizes that, everything will be alright again.

In conclusion, people's stupidity deeply saddens me. I beg everyone :  don't let emotions win over logical thinking, don't disappoint the community again by selling for low prices. Otherwise you will harm both yourself and the community.

yes, He has been carefully watched. He has held his promise on all his payouts. Most people return to his 5000BTC+ higher rates only after getting early buyouts.


But thats the same for any ponzi, its all about giving investors a taste, then cutting and running.

Has anyone successfully cashed out from him?

No no no, If people stop buying then the price will continue to fall.

People need to buy, and rally to it. If Pirate tries to start a panic the only way to stop it is to buy.

Most people were buying into Pirate at under 10 per BTC, 5point drop doesn't do much for him. The entire scheme requires him drop the price much more. If he cant trick the market he cant make money.

tell holders to not buy/sell now is irresponsible

Besides, long term everyone on here knows long term bitcoin is promising.

But the funny thing is that he has been paying this 7% since november last year, and the word is he is paying all the money from the accounts too.