Isn't it clear what he does? He's said as much on other threads. People lend him bitcoins that he then sells for hard currency locally at a (significant) markup. Whoever buys those coins more than likely sends them to a third party, who converts them back to fiat (possibly another fiat).
Pirate moves his currency back into bitcoins. More than likely Pirate is never in fiat more than a day or two, leaving him minimally exposed to bitcoin / fiat pair volatility risk.
Pirate's customer has a steady need to send currency through bitcoins on a regular basis, for payment for some ongoing good or service. These customers are paying a significant premium for this service, likely 10% or more. That's why Pirate can afford to pay 7 points per week. As long as pirate's customers' business grows (or they move more bitcoins through him) he can afford to keep paying 7% indefinitely. It is likely that at some point he may have to close to new deposits (as he has done in the past).
Bitcoin is a easy way to move large amounts of currency without the use of banks or walking large amounts of cash through airports. Hell, it's better than diamonds or art. Sure is more liquid.
He's doing exactly what he says he does, arbitrage with a very short term loan (The loan is as fast as he can turn hard currency to bitcoin).
Pirate moves his currency back into bitcoins. More than likely Pirate is never in fiat more than a day or two, leaving him minimally exposed to bitcoin / fiat pair volatility risk.
Pirate's customer has a steady need to send currency through bitcoins on a regular basis, for payment for some ongoing good or service. These customers are paying a significant premium for this service, likely 10% or more. That's why Pirate can afford to pay 7 points per week. As long as pirate's customers' business grows (or they move more bitcoins through him) he can afford to keep paying 7% indefinitely. It is likely that at some point he may have to close to new deposits (as he has done in the past).
Bitcoin is a easy way to move large amounts of currency without the use of banks or walking large amounts of cash through airports. Hell, it's better than diamonds or art. Sure is more liquid.
He's doing exactly what he says he does, arbitrage with a very short term loan (The loan is as fast as he can turn hard currency to bitcoin).
