I joined the FPS&T, BTC S&T on the 1st of March 2012, it wasn't easy to get on board then either, I requested that my investment be rolled over for compound interest but this got missed on our communications which is fine by me, who on earth would be paying out interest if he could just keep it when up to anything dodgy, nearly 3 months down the line of receiving these payments that never even had to be made plus continual monitoring of the evolution of Pirate's offering & most of all this thread have convinced me to PM Pirate today to request doubling my previous investment much sooner that I was originally planning to do if he has that sufficient availability at present. <-- Edit, period added (((for the gramar Nazis, jk )))

vrag, is that you?

IC,IC. is correct. "How about IC,IC,ICDCDC,InterogatoryDC,DCRunON." ?

My idea exactly and similar to what I'd do if I wanted to create something like this - find a Ponzi that isn't going down yet (though MMM seems to me also burned out quite a bit) and that pays crazy enough rates that it's still possible to earn back the deposits + interest in a short time frame.

Pirate however said the following in this thread:

I even asked Nefario recently if it would be ok to list an open Ponzi on GLBSE (stating clearly in the contract that the shares have 0 value and the payouts come only from shares sold) and he declined, so to do something like this you'd really need to claim to have "insider knowledge" + "a perfect but proprietory idea" and disclose as little as possible. Also it might help NOT to pay out 20%. Better call it "mining bond" with 150% PPS returns or so and pay this out. Sounds less dodgy, you have more profits and you can "expand" from time to time to raise more capital.

There's a discussion on another thread that may be related to this one.

https://bt.irlbtc.com/view/80174.0;all

To those that wonder why pirate still needs to borrow coins from people and not use his own coins, I think I know why. It's true that if he uses his own coins, he can earn the full 10.65% he makes each week, but then he had to take on the risk of bitcoin failing. For example, if a flaw is found in bitcoin and the value drops to 0, he would lose all the money he held in bitcoin. Even if bitcoin doesn't fail, he may not want to have so much of his wealth tied to such a risky currency.

So instead of holding 10,000 of his own bitcoins to use in this business and earn 1065 btc each week (10.65% of 10k), he can just borrow 25,000 bitcoins from us and earn 1168 btc each week. (10.65% - 5.98% of 25k). Another way to look at it is, would you rather make 10.65% a week but have some risk of losing your capital if bitcoin fails OR would rather make only 4.67% a week using someone else's capital and have pretty much no risk whatsoever. I think pirate would be stupid to risk his own money. If you don't agree, ask yourself this: if you had a way to make 3% a week on your bitcoins with absolutely zero risk on your capital, would you still invest in pirate's program and make 7% a week but risk losing it all if it turns out to be a ponzi scheme?

This scam looks like front-running. 

http://en.wikipedia.org/wiki/Front_running

He is probably front-running entire market for bitcoins.  For the past few months price has been strangled to $5. Front-running could explain why this is happening. With this type of scam every honest trader is losing money on the sell-side or buy-side.  It's like scalping or taxing every trade. 

What this means is that honest long bitcoin investors are losing potential profits that they are entitled to.  New players have been entering the the market increasing demand.  Investors long bitcoin should benefit from higher prices.  They aren't and the scam is why.  This wealth extraction is preventing bitcoin from trading higher.  There should be growth but we aren't seeing any.

To front-run he would needs two things to pull it off successfully:

1. Inside information possibly from the exchange itself.
2. A very large amount of capital at his disposal.  That capital could be leveraged up with borrowed money to get have more "powder" to pummel the market. 

He says he generates gross of 10.65% per week

10.65% per week is 1,9296.28% annualized. 

Let's say he started this scam with 10,000 coins or roughly $50,000 at current trading.  Under that scenario that amount would become $9,648,143 in a year. That's a significant sum of money.  That is enough to move the entire market.  Bitcoin market capitalization is ~ $45,000,000.  So $9.6 million scalped is like stealing 20% from everyone. 

Flatlining the price affects the way everyone perceives bitcoin.  Nearly every news article we read about bitcoin mentions the price.  The price is seen as a measure of bitcoin's vitality. Suppressing the price of bitcoin suppresses its image in the eyes of others.  If bitcoin was trending up every more people would want to get in and invest in the commodity currency.  Positive feedback loop.  Stagnant trading makes it look nothing is happening.  Outside observers will just assume that real growth is stagnant as well as the price.  Instead what is really happening is that wealth is being transferred to a few insiders. 

http://bitcoincharts.com/charts/mtgoxUSD#rg150zczsg2012-03-21zeg2012-05-24ztgSza1gSMAzm1g14zm2g25zv


Bitcoin is a commodity currency.  Prices for commodities tend to be volatile.  Bitcoin is a exotic commodity.  So you would expect to a volatile trading pattern short-term with an upward trend over the long term.  Not a flatline.  For most of bitcoin's history prices rose steadily long-term while extremely volatile short-term.  With somebody skimming off every rise and fall, we can't grow.  The scam is stunting the growth of bitcoin.

We need to stop this. One possible way was suggested by Pirate himself.   Pirate has said that he would be imperiled by a price spike. 

Pirate said :

Quote

So if that's the case a "money bomb" might work.  Coordinated mass buying.

http://en.wikipedia.org/wiki/Moneybomb

Lot of details would need to be worked out to make that effective. 


Front-running is covered in more detail in the following cross-post.


https://bt.irlbtc.com/view/80174.msg911226#msg911226





When something sounds too good to be true it often is.

HFT isn't out of realm
but front-running with "inside information" is highly doubtful at best

If you back and look at what he has posted it is consistent with HFT.  

Without the right information things will go awry fast.

Since when do garbage collection specialists need a college degree?