Topic: Who Pays What? - page 2. (Read 36785 times)

+1 (finally someone recognises the basics).

For the newbies trolling the lending section, they might be interested to know rates have roughly halved in the past six months.  Personally I've already done one reduction and was planning a second before deciding to change the future direction of StarfishBCB. 

BEST case scenario: these higher-than-normal market rates are only possible because Bitcoin is still a developing economy, akin to a rapidly growing start-up company. Eventually it will slow down to the pace of the overall global economy. Once that starts to happen, rates will start to go down. At that point, you better hope people are comfortable with rate decreases, because one too many "investors" pulling their money out to go invest with someone paying slightly higher will result in a bank run.

Only way I can think of avoiding this is
1) DO NOT promise fixed rates, and get people used to them fluctuating based on your returns (even if they vary by 0.01%). Not only will this make it easier to lower rates if you have to, but the changes in the rate will at least give "investor" some signal as to how your business is going
2) Be open about your holding as much as you can. At the least, tell people how much you have in reserves v.s. how much you have lent out. This will at least give them an idea of how risky you are should a bank run occur.

Many ponzi schemes have gone on for years. Madoff, the Cuban brothers in Costa Rica, etc. No entity can ever pay consistent, market-crushing returns, without endgendering super high risk, or being an out and out scam.

If you keep your eyes closed, you'll continue to avoid the evidence.  Haven't you noticed eight months of lending where people offer to pay superior rates, or the many posts from people confirming that they have paid much higher rates.  And the point I was making was about the cost of capital, rather than the returns.

There's no evidence that any of these deposit-takers can generate high returns. Just the monumental historical precedence of pirate. And it wasn't that long ago! Stop living in HYIP la-la land.

I'll add a small comment that I expect to be dismissed or ignored by critics that really don't understand this part of the bitcoin market. 

People pay 1% per week (and higher) on deposits because it their next cheapest source of funding - and that happens to be the market rate in this economy.  They happen to be able to generate higher returns, and thus leverage their positions.

It is a simple matter to observe large companies and banks making huge profits, but they still take more and more in deposits.  For US companies, the rate they pay is currently low, but the arguments in this forum suggest corporates shouldn't have any debt if profitable.  That, however, does not maximise returns.  Also, for those with short memories or a US centric view, around 1980, the standard bank benchmark rate was 15%.  In today's market for start-up companies, equity can cost between 30% and 50% per year and that was the expected level of return demanded by one of the investors in the electricity company I worked on (other investors only needed 20-30%).  Bitcoin is coming down to those levels as expected.

And off-topic for a moment, the arbitrage opportunities I'd play with would use the 10% differential that currently exists.  Those that claim it's not possible are obviously not looking.

The way it is now is how people want it, except for that minority calling everyone a scam that offers 1%. They are slandering purely on the fact that they don't like how they do business. I don't agree with that, unless they have proof. I pretty much agree with most of what your proposing. Just not the part of forcing anyone to open their books, and the blind accusations without proof you won't get. When people stop giving them money things will change. I know i would probably invest large amounts if i had a concrete guarantee. Slander isn't the solution, and that's what makes team Ponzi just look like trolls. Things should change through competition not slander.

omg invite only forum OMG.

GIVE ME INVITE NOW.
/rage

Only Patrick's money-backed ratings matter, really. That's the best way to do ratings that have meaning -- they're worth something.

The point is not to prove they are scams. You cant prove that. Nor do you have to. The point is to rate businesses which can demonstrate they are (most likely) NOT scams, which can demonstrate reserves, income, identity etc above ones which can not demonstrate any of that at all.

As it is now, its trivially easy to set up a ponzi on GLSBE, and get Patrick to rate you AAA. What then is the meaning of it? Its meaningless. Dont even bother.

Yes it's late, but it's also proof. You have the right to call them a scam at that point. Calling everyone a scammer because you don't like how they do business isn't proof. They don't have to prove anything if people are gonna keep giving them coins, with no recourse. People can choose how they want to use their coins, and the risks are more than clear enough. If you really hate all those 1% shops make a ton of fake accounts and claim they scammed you. You will achieve your goal much faster. Pre-crime isn't very effective if your just gonna accuse everyone of committing a crime, and hope you hit a target.

ROFL. A bit late then, no?

You mean all the 1% per week "securities"? I trust none of them, not one tiny bit. Nor should anyone as long as they do not open their books and wallets so to speak.

Now unlike me,  you have taken it upon yourself to rate them, and I actually think thats a good idea; I can imagine legitimate businesses not wanting to disclose everything to everyone, so there is a good argument to be made that someone like yourself, who  would need to be trusted by both parties, would obtain privileged access to information to make meaningful assessments, allowing legitimate businesses to prove themselves to be more trustworthy than the scammers. That means you would  judge the facts (or lack thereof), not the scammers lies.

A good history is often a good predictor of the future. For instance, I've found Ebay seller ratings to be reliable (though I have never tried buying from someone with a low rating or a small number of ratings).

The big difference between Ebay and running a bank is that typically each Ebay sale is very small and thus the amount you can scam is small (unless you build up your rating with lots of tiny sales and then try to pull off a big scam).  Unfortunately with a bank or corporation/project that can run away with all the funds, there is a very high incentive to scam.

Yes, and also if anyone wants to take deposits and fully submit there identity they can do so also.

Exactly.  PH's ratings certainly aren't the official forum's ratings or anything.  If someone has a better plan & the time to implement it, then no one is stopping them.

Obviously I will be interested to see your collected assessments of the people in this section then.

Don't get me wrong. I'd like to see more information also, but i don't think it should be required. Plenty of people are gladly handing out coins to strangers, with no recourse. They should stop doing so if they want less secrecy.

That's why i said the standards are different. The real world example was meant to show that large amounts can be had with virtually no real proof that i won't steal that money. In bitcoin land people rely on things like post count and transaction history. The risk is higher, but people can make up there own minds. It's not fair to call everyone a scam. Now when i see someone that guarantees no losses and they default then i'll call it a scam.

That may be the point for you, but its certainly not the case for many legitimate businesses.


Not without giving up your anonymity you dont.