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SEC Alleges 'Bitcoin Savings & Trust' Is a Ponzi Scheme
New submitter craighansen writes "The U.S. Securities and Exchange Commission has filed a lawsuit against a man they allege ran a Ponzi scheme using Bitcoin. According to the complaint (PDF), during 2011-2012, Trendon Shavers, operating under the username pirateat40, collected investments of over 700,000 Bitcoins from at least 66 'investors' (a valuation of $4.5M) with the promise of as much as 7% weekly returns. These 'investors' received about 500,000 Bitcoins in returns, so on average, they're probably much better-off than investors in Madoff's scheme. Nevertheless, with the rising value of Bitcoins, the $4.5M investments would be worth $65M at recent pricing if they had actually been left in Bitcoins, which approximates the 1% per day returns that the scheme promised."
No, it means investing in them is slightly dumber than we all knew it was yesterday.
so they're selectively acknowledging bitcoin? how else can SEC get involved unless this is considered a legitimate security?
How does one tell /. to stop autorefresh?
Xtreme Speculators who whine when they are taken for a ride???
These are people who used to think they bought the Brooklyn Bridge
BitCoins sound like a perfect tool for flim-flam men .... have the Nigerian Princes heard of them yet ???
Why would you think it's not considered a legitimate security? A Ponzi scheme can be built on anything you like; if it's an investment, the SEC has jurisdiction.
The feds may not like BitCoins, but that's mainly due to their use for money-laundering, not because they have some sort of deep-seated fear that the USD will start feeling the heat of competition.
According to the post the actual value of bitcoins has climbed at about 1% per day, so surely it's more remarkable that the scheme failed to meet those expectations?
No kidding!!! What do you say at this point?
Actually, in this case it means quite the opposite; investing your bitcoins in something (a scam in particular) is worse than investing _in_ bitcoins.
If the investors had merely been sitting on their bitcoins they would have gotten the returns he promised (although in dollar value).
No, it doesn't mean that bitcoins in general are a Ponzi scheme, it's just about someone USING them in a specific scam that was a Ponzi scheme.
-- You are in a maze of little, twisty passages, all different... --
No, it means investing in them is slightly dumber than we all knew it was yesterday.
No, it means investing in bitcoin-denominated ponzi schemes is dumb, running ponzi schemes is illegal and keeping their saving in bitcoins would be good idea for people scammed by pirate40.
Comment removed based on user account deletion
When I first heard about Bitcoin, I thought it might have been well-intentioned. But well-intentioned or not, the whole thing is a giant flashing sign for scammers, thieves, and money-launderers reading "Marks Here!" It was only a (very brief) matter of time before they inevitably started showing up in droves.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
No, it means investing in them is slightly dumber than we all knew it was yesterday.
Every time I read these stories I wonder if I'm doing the right thing by not investing in the continued stupidity of other people. It seems a more reliable investment than any others I've made recently.
No sig today...
The difference being, the schemers have the ability to print more and the support of the media. BitCoin is one of the first non-Ponzi currencies to come along in awhile.
I like quoting myself too.
Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
So do I:
http://yro.slashdot.org/comments.pl?sid=4009033&cid=44369347
Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
FTFY
This really has nothing to do with bitcoin itself, and is just someone trying to use them to scam people. Nothing new here.
They almost try to be though. What with mining paying early adopters more it has a bit of that.
I think the shrinking supply of them and increasing price will lead to uptake for litecoin and its other competitors.
Which makes it no different than gold. Fox news talking heads were advertising shady gold companies during the commercials in their own shows.
Not really, the fact is with bitcoin having climed so fast there isn't really much you could invest it in that would have performed better than just holding the bitcoins. I guess you could make bitcoin denominated loans but the combination of lack of effective regulation and the aforementioned rise in bitcoins value would probablly lead to an extremely high default rate on such loans.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
FLEE TO MEXICO
Build private compound
Employ armed guards
Enjoy
"When information is power, privacy is freedom" - Jah-Wren Ryel
It does not matter if it worked out in their favor or not Ponzi schemes are illegal.
seems to me it means they haven't paid their protection money (like Goldman, et al)...
it's web page is godd. i contact. Hastalik, salk, tedaviler
That's my point. The scheme's operators only had to sit on the coins and pay out their actual nominal value to come out in line with even their most optimistic predictions. If they'd posited a 5% rate of return they could've even made a very tidy profit too.
No kidding!!! What do you say at this point?
Neither Slashdot, the article, nor the SEC are saying that it is a bitcoin problem; it's your standard scheme exploiting irrationality around a commodity, that happens in this case to be bitcoins.
No kidding!!! What do you say at this point?
Can anyone show me the real value the abstract numbers of money (regardless of what its called - dollar, bitcoin, yen, etc.) are supposed to represent in regards to bankruptcies and other negative financial number?
If not then doesn't this say all abstract representation is a ponzi scheme?
Never underestimate the power of greed to suspend normal thinking processes.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Doesn't this mean bitcoin is now illegal?
No, it means that bitcoins are just like real money! You can commit real financial fraud with them.
What's new this time around is that he's in custody. I haven't read the article, but I got grapevine news from someone who reads more than I do that yesterday, PirateAt40 was taken into custody and caught with 700000 bitcoins in his wallet.
I told her I was honestly surprised he was in police custody and not the recipient of a brand new Colombian Necktie.
Restating the obvious since nineteen aught five.
Which is exactly why I don't try to invest in the stupidity of others. I'm smart enough to realize that I'm dumb enough to end up on the wrong side.
Gold is and always will be a solid hedge against inflation. Of course, it doesn't hurt that you tossed in "Fox News" to get all your liberal friends panties in a wad. And when Obama's monetary policy lead to rampant inflation ... well you will not look so smart.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Not sure you have a good grasp of what a Ponzi scheme involves. In a Ponzi scheme there's no making money off other people's money. There's no making money off anything. It's like trying to build a hill in a sandbox. You drag the sand in to the middle, which makes the middle go up, but the edges go down to form a moat. So you drag sand in from further away. The moat gets deeper, and the hill gets higher. The total amount of sand stays the same; all that happens is that it is redistributed. So long as you keep dragging sand around, people think the hill will get bigger forever, because the moat's never in the same place very long.
Except when you run out of sand and have no way to fill in the moat.
http://en.wikipedia.org/wiki/Ponzi_scheme
No kidding!!! What do you say at this point?
It means they caught a conman who prayed on those blinded and stupefied by greed.
I hope they throw the book at this guy. Although I know there are literally millions more con artists who would happily repeat his actions.
No, it means investing in them is slightly dumber than we all knew it was yesterday.
Investing in a risk free 1% a day is fishy in any currency. This was an obvious scam and this guy should be locked up for it.
Yes it's the weekly bitcoin praise article just doing it from a different angle. Whether that claim is true or not is sadly a different story and not proven here.
It's at best Amway or Tupperware for geeks, but personally it looks very much to me like an old fashioned ponzi scheme that is baited for geek and has people like the readers here as it's intended victims.
The SEC is a ponzi scheme. Tell them to kiss off.
Never underestimate the power of greed to suspend normal thinking processes.
That sums the whole situation up perfectly. Sadly I've already posted and can't mod you up.
This really has nothing to do with bitcoin itself, and is just someone trying to use them to scam people. Nothing new here.
The reason it's a big deal is that he wasn't just trying to scam people, he was actually very successful at scamming people. If he just tried and failed no-one would care.
I saw give him a fair trail and if found guilty lock him up with a bunch of violent offenders for very many years.
Not when you buy it at $1800 an oz and now it is down to $1336. Unless you are saying that is a sign of deflation. Gold like any other commodity has its ups and downs. There is no reason to suspect it will always be a good hedge against inflation. In hyper-inflation economies like Zimbabwe gold was worth comparatively little vs USD and Rand.
I actually used Fox News because they were advertising it on that channel. It was that and some medicare scam type companies. I saw this at a doctors office in the middle of the day. I have never seen those ads on another 24 hours news channel.
I am not sure how the president can set monetary policy, I think that is the Fed's job. He can select new governors for the board, but once appointed he is stuck with them. Bush selected Bernanke. Obama could select a new chairman but he is limited to those governors already appointed. The senate would have to confirm these though, so again not like he can demand change.
But wiser people realize *that's the point*: We DO blame the US Dollar for the damage done by Bernie Madoff.
With a currency that isn't based solely on delusion, and a system that doesn't allow to make money from nothing (with interest and debt) -- just to force its population into hamster wheels, to work themselves to death, in order to create that money and pointless obsessive growth -- something like this could never happen.
Because just putting your money somewhere, and magically getting back more money, would be completely impossible.
And show up they did, and they were very successful. You know what they say about a fool and his money..
But then scams with cash and money transfer services have been going on for a very long time. BitCoin didn't really change anything there.
They almost try to be though. What with mining paying early adopters more it has a bit of that.
I think the shrinking supply of them and increasing price will lead to uptake for litecoin and its other competitors.
LiteCoin is a troll on BitCoin. It's just a copy and paste job and there really isn't any need for it to exist.
But it's not a Ponzi scheme unless Bitcoin is a currency.
If I took money to invest in *stocks* and then returned the (bigger) money minus his cut, then that's an investment.
If I took money and invested in *bitcoins* and then returned the (bigger) money minus his cut, then its an investment.
To be a Ponzi scheme, you have to assume Bitcoin *is* the currency. A Ponzi scheme requires that the scheme only work by paying out later investors from earlier investors capital, not that it was an investment that grew, so they're saying *Bitcoin* was *not* the thing invested in, it was the currency of the transaction.
Oh and they got a 1000% of their capital back if USD is the currency, or 71% of their capital back if Bitcoin is the currency, but that point is moot.
I know how trollish this is going to sound, but it's consistent with my observations. This was a demonstration of just how well libertarian investors do in a (mostly) unregulated environment.
so they're selectively acknowledging bitcoin? how else can SEC get involved unless this is considered a legitimate security?
That's an incorrect conclusion. You would get into trouble if you sold your own securities in a fictitious company, sold bogus securities in a real company, and any number of frauds involving investments - all illegitimate securities. So, legitimacy has nothing to do with anything.
Also, 7% per week!? Didn't anyone think that was too good to be true?! In this days and age, I'd be careful about anything that promised 7% per year!
According to the post the actual value of bitcoins has climbed at about 1% per day, so surely it's more remarkable that the scheme failed to meet those expectations?
Right. But the scheme was denominated in BitCoins. You invest 1, next day you have 1.01 and so on. That's on top of the USD value of the BitCoins going up. Of course there was no way that this guy was getting 1% of his held BitCoins from thin air. This guy even started rumours about involvement in laundering drug money as a source of the 1%.
What kind of an idiot believes the unbelievable? I struggle with that too. The answer seems to be that there are a lot of people that will literally believe anything.
People that really know what investing is would have used the term "speculators" for the people that got scammed in this scheme, so the correct phrase is "libertarian speculators."
Investing is something far different, and something 95% of people trying to make money don't fully grasp. The other 5% of us make plenty of money off of that 95%.
I cannot confirm that he is in custody, but I heard "they got him". Reading this article I am starting to doubt it. There is little doubt for anyone who knows the Pirate Savings and Trust (that's what it was called first) that it is a scam, a lot of people lost their money and this is almost certainly not a big stunt for Bitcoin publicity. (heh)
Restating the obvious since nineteen aught five.
700,000!? That's 66 million USD at current market prices.
That's one hell of a con.
Given the context, you seem to be suggesting that you are, yourself, a scam artist. Might want to consider implications of your phrasing in the future.
I would rather have precious metals which require a supernova to manufacture than a set of bits.
What makes you so sure that they didn't do just that? Collect money whose value is increasing at 7%, pay out at 5%, pocket the difference. Sounds like a wonderful business model to me as long as you can find the marks to "invest". And 65M * 2/7 = $18.6M pocketed, even ignoring the effect of compound interest.
Lets see, the reality would be closer to:
1 year = 52 weeks
@5%/week = 1.05^52 = 12.64
@7%/week = 1.07^52 = 33.72
profit = $65M*(33.72 - 12.64)/33.72 = $65M*0.625 = $40.6M
Not bad for a dishonest year's "work"...
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Every time I read these stories I wonder if I'm doing the right thing by not investing in the continued stupidity of other people. It seems a more reliable investment than any others I've made recently.
Unfortunately, virtually every practical means of investing in stupidity break the law; and the ones that don't (the lottery, for example), the government itself runs.
If you can find a new way they haven't yet banned to extract money from the stupid (eg. "payday loans", but those look near the end of their glory days), you will find yourself very, very wealthy.
When the economy bounces back gold prices go down and platinum prices go up. Platinum was cheaper than gold contrary to what used to be usual. A correction had to come sooner or later. It usually takes 5-6 years to resolve a banking crisis. Guess when the banking crisis happened.
Yeah, we all knew it was a ponzi when it was running. No, really. Go read some of the old threads on the forums.
Some people were just happy to collect "earnings" while it was running. A few people even managed to cash out before it all went to shit.
Also, keep in mind that most of the losses reported by people were their account balances after a few months of compounded 7% per week "interest" (LOL). The actual losses were much lower.
See that "Preview" button?
And houses used to be 60% more valuable than they were after the market crashed. And Apple used to be $700 and now is selling at 436. And ...
Your analysis is lacking any depth.Where you saying gold was a bad investment when it was under 700 two years ago? Saying gold is a bad investment and pointing to Fox News is pure hyperbole, designed to illicit emotional responses.Gold is an investment, good at times, poor at other times. It is not a scam anymore than AAPL is a scam.
On the other hand, it is perfect for investors like me. Keep up the work, and I'll continue to bet against people like yourself.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
If they had 500,000 bitcoins then those investors have a large percent of the market. Doesn't bitcoin max out around 20M bitcoins? Sure you can buy/sell using fractional bitcoin but if a small group of people are already hoarding several percent of the currency when hardly anyone is even using it yet, that doesn't look like a good future for it.
Sorry, gold was under 800 two years ago, typo.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Madoff operated under their noses for years despite numerous warnings by competitors that his results were impossible and likely a fraud. Wall Street itself is a ponzi scheme.
For several years, one big financial firm after another cratered or had to be bailed out and all we heard from the SEC was crickets. And now they're on the warpath against bitcoin.
Wansu, th' chinese sailor
According to the post the actual value of bitcoins has climbed at about 1% per day, so surely it's more remarkable that the scheme failed to meet those expectations?
The guy was withdrawing the bitcoins to pay his rent. If he had actually left them in the account then the promised rate of return would have materialized although by happy coincidence than strategic investment.
Except they had to pay out in bitcoins, not dollars. If Bitcoins increased their value against the dollar, it made the 8% per week even more implausible.
Since there are no actual investments with legitimate earnings yields that are nominally denominated in bitcoin (or at least not enough to matter), any sort of banking scheme that offers interest denominated in bitcoin is either a scam or a pure short-play (bc to $, wait for price to drop, buy more bc). Welcome to full reserve banking, where the only legitimate banking charges you to hold your money.
If I were a scammer I'd be seeking out people who have a higher concentration of gullible people within their ranks than the general population - churchgoers, libertarians etc. I think bitcoin users represent easy pickings and more so because the distributed and unregulated nature of bitcoins makes it easier to collect "investments" and easier to disappear afterwards.
Taking money from dumb people should never be illegal. If you're dumb enough to believe that a Nigerian prince needs $50k to transfer $100m to the US. Then by all means, this should be legal.
Ponzi schemes should be evaluated on a case-by-case basis, but the burden of proof should be on the schemed.
For instance, if I ask you for $1k, and promise to return you $10k in 6 months with no proof or explanation of my scheme, that should be perfectly fine and legal.
On the other hand, if I have a porftolio with 100 other investors, and their phone numbers and you call them, and they say yeah this is legit, this man is a genius, blah blah blah. And I take you're money and flee the country, then yes that should be prosecuted to the fullest extent of the law.
21st Century Renaissance Man
Bitcoin purchasers are more gullible than the general population. This guy knew that, and the knowledge worked quite well for him.
Posting anonymously to preserve my Karma, since Bitcoin is quite fashionable here on Slashdot.
The usual breakdown for gold use is 50% jewelry, 10% industry, and 40% hoarding -- sorry, I meant "an investment vehicle to hedge against inflation". When the hoarding percentage goes above 50% or so, there's a sudden crash in gold prices, unsurprisingly.
I think you are missing the point. The reason this should be illegal is not in order to protect the few people dumb enough to fall for it. There are other people smart enough to figure out in a couple of seconds, that it is a scam. But once they have figured out it is a scam, they have still wasted a couple of seconds. If we guestimate there are 10 million smart people in the world who each waste a couple of seconds figuring out it is a scam, then that has in total wasted a few man years of smart people's time. Imagine what those people could achieved in that time?
Do you care about the security of your wireless mouse?
Glen Beck was advising people to buy gold coins from a company that was charging about twice market value for the coins. The advice to invest in gold may have been sound but buying gold coins from Goldline International was a terrible way to do it. It was a scam from start to finish.
Actually, in this case it means quite the opposite; investing your bitcoins in something (a scam in particular) is worse than investing _in_ bitcoins.
If the investors had merely been sitting on their bitcoins they would have gotten the returns he promised (although in dollar value).
Apparently, trusting your money to someone whose username begins with "pirate" is a good way to get your savings keelhauled.
Yarr!
Battlemaster--Game with friends in medival realms
I half wonder if this implies that bitcoin is a ponzi itself, not orchestrated by one person, but instead a kind of distributed meme ponzi.
Housing bubbles are still prevalent in many countries (*cough* Canada *cough*).
Company charges money for services ... WOAH ... that is shocking!
Idiots don't shop for commodities .... WOAH ... that is shocking!
Blaming the guy who is marketing .... WOAH .. wait, not shocking.
By "Scam" you mean "Why didn't I think of that?"
Further, strawman much. Because GB was promoting gold and outrageous prices, doesn't mean gold is a bad investment. It just means you shouldn't listen to GB. You're left wing ... so ... this shouldn't be a problem for you.
I wonder how you feel about Obama's selling of the scam called "ObamaCare"? It is so good, he is violating his own law (insert blame the Republicans here) by delaying implantation till after the midterm elections!
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Post a decent argument and contribute to the world instead of just trolling.
This is genius: "Invest in continued stupidity." I think it may be the only stable market.
I assumed 'pirateat40' is a reference to Jimmy Buffett "A Pirate Looks At 40". The line "Made enough money to buy Miami, but I pissed it away so fast" probably applies to Shavers.
You're an ass.
Don't complain about syntax, grammar, or spelling. There is no.hell like input on android.
Gold, diamonds, artwork, and the like are always promoted as the perfect investment vehicles, but they're no more stable than fiat currencies or pork bellies. Their value is exactly what the speculators and trading houses set, because there is no actual value to the item beyond public confidence in its value. Russia, Australia or South Africa could crash the gold or diamond market tomorrow if they wanted to, just by releasing a small portion of their reserves (which they keep off the market in order to sustain the price).
Just out of curiosity, when you "buy gold" do you actually get a chunk of yellow metal in the mail? Probably not, almost no one in the US does. Most likely you get a piece of paper saying that XYZ Investments has your gold in their vault. And if you are one of the few who actually get a piece of shiny metal, do you have the facilities to actually analyze it and see if it's really what they claimed?
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
So if it works or near works it's still a Ponzi scheme really?
I am Bennett Haselton! I am Bennett Haselton!
Yet investing in something that *depends* on the stupidity of others is probably a good strategy.
"No one ever went broke underestimating the intelligence of the American public." -- Henry Mencken
I never suggested gold in general was a scam. Just that the peddlers on FOX news were using it for one.
So how much did you buy at over $1200/oz?
If you want to invest in gold remember to compare it to platinum. When it costs more than that a correction is coming.
Charging 100% mark up on gold is a scam. No reputable source does that.
Marketing folks should take Bill Hicks sage advice.
No, I have what is called morals and ethics, so I would never do that. Nor should others be allowed to take advantage of the elderly that way.
Obamacare is not a scam, it might be ill advised but it is not a scam.
It is not a troll. It is an alternative.
It does not matter if 100 of those spring up, once the price of bitcoins is too high there is a need for these to exist. There is no reason why more digital currency should not be minted.
There's not a whole load of interesting comments in this thread. You can easily say "Stupid people" but you don't learn much from that. Have a look at the details too.
Bitcoin has been a really interesting study in trust. Pirate managed to get away with what he did because people put a lot more trust in him than other people would. Pirate had a very good safe reputation before this and people had an idea of who he was.
The other thing that is interesting is that it could have been a pass-through to somebody else.
The next thing is that people were given info on how the profits were supposed to happen... I don't much about the scam but I think the cover story was supposed to be arbitrage on the dollar? In reality some think that his plan was to scare the market with some dumps... but it didn't pan out.
So, lessons to be learnt:
- you shouldn't judge trust by WHO but HOW. The distance of money between the trustee and you is key. Bitcoin of course made it seem very distant and therefore more tempting
- things happen gradually. You have a bank... then you realise you can get away with lending out a bit... then it's a bit more... and so on
- just because there's a real and plausible plan doesn't mean you won't be scammed
- just because someone has a good reputation isn't a great guide
- the value of the reputation:scam profit ratio is a better guide
A blog I run for the wealth
In a few man-years of smart peoples' times, spread out over a couple of seconds per person, almost nothing of worth could have been accomplished.
If it's gonna be illegal to waste others' time, let's start by throwing in jail those city workers who fail to properly time red/green light cycles.
The reason it's a big deal is that the /. editors have a hard on for Bitcoins
There. FTFY.
I do, because I'm not an idiot. I get real gold at auction. You can buy paper gold if you want, but only if you're treating it as any other commodity. There is no safety aspect unless you have physical control. Besides, it seems like very large companies are performing fraction-reserve-like scams by selling more gold than they have.
Gamingmuseum.com: Give your 3D accelerator a rest.
So you think there's more platinum used in catalytic converters than gold in jewelry, electronics, aerospace, and medicine? Gold reacts with damn near nothing. That has great value.
Gamingmuseum.com: Give your 3D accelerator a rest.
Amazing that so many people trusted "First Pirate Savings and Trust" with 700,000 of anything, be they pennies or $17-coins or $1-coins or $12-valued or whatever. They are certainly worth more now than they were. If he started returning the money today, it's arguable that he would have made a great deal for all of his customers by forcing them to hold onto the coins for a longer amount of time until the market rate had gone sufficiently high to make it worthwhile cashing out.
"First Pirate Savings and Trust" -- a name you know, a name you can believe in.
I know I kicked myself after every single time I cashed out bitcoins and afterwords the value went up by 6x or more.
Restating the obvious since nineteen aught five.
I don't understand why there's an expectation of altruism. If I can exploit your stupidity to take your money and make it mine, then I'm going to do it when it's legal. But, then again, I live under the notion that humans are innately selfish beings.
This guy probably knew what he was doing was illegal, but did it anyway because he figured it was legally gray enough to test the waters.
Anyway, "libertarian investors" and "unregulated environment" are euphemisms for free market, and in a free market the "weak" die off and the strong survive. It's Darwinism at its best, and I'm surprised more people aren't aware of this.
The whole reason you have to invest an abnormal amount of time and energy into securing your own bitcoins is because 1. Someone isn't doing it for you (who would normally be paid to do it, like a bank keeping your fiat safe), and 2. because if you don't, someone is going to steal that shit right out of your digital hands.
People are greedy and we shouldn't be surprised when we get confirmation of what I thought was an obvious fact of life; instead, we should simply design our systems with that as a priority in mind.
I saw give him a fair trail and if found guilty lock him up with a bunch of violent offenders for very many years.
WTF? He's not a threat to society - ruin his name (done) and garnish his salaries (to be paid towards his fraud victims). You and I had nothing to do with this scheme, and shouldn't be expected to pay for his room and board. Prison should be for violent offenders _only_, not for jerks who tricked a bunch of fools out of their imaginary money.
No, but those few seconds are being taken away from the time they could have spend on something else. If you will try to argue that it makes no difference if a smart person is going to spend say eight hours on a task or eight hours minus a couple of seconds, then you would be wrong.
I agree one smart person is unlikely to achieve anything great in a couple of seconds. But they could achieve something in eight hours. Could they have achieved the same in eight hours minurs a couple of seconds? There is a good chance they could. But if you keep subtracting a couple of seconds at a time, you will eventually cross a boundary where that something could no longer have been achieved.
It may be that for the majority of those people, the lost couple of seconds didn't make a difference. But for a small fraction of them it just happened by chance that those was the exact couple of seconds which made the difference between achieving something or not achieving it. Spreading the lost productivity over lots of people does not reduce the impact, it just makes it harder to measure.
Do you care about the security of your wireless mouse?
To add to this; In a free market, anyone who doesn't take the steps to protect themselves *deserves* to be metaphorically eaten alive.
Don't worry, he's possibly stupid enough to keep his wallet in his pocket.
No, there was still a contract, albeit a very risky one. The guy promised a 7% weekly return. If you loaned me $100 and I promised to give you back $107 a week from now, that's still a contract and I'm legally obliged to do that. Now you might run afoul of some law that caps interest rates. But if it was really an "investment" (I need your money to buy an air compressor, so I can go do a job at my neighbor's house, and he's going to pay me cash, and then I can pay you back) then it's likely legal.
"I have never let my schooling interfere with my education." - Mark Twain
Gold is and always will be a solid hedge against inflation.
Actually, gold is a pretty poor hedge - as with any commodity, it is very volatile and it's long term returns are not that great. For example, $100 invested on gold in 1965 would be worth around $4000 in 2012 vs about $6000 for the same investment in the S&P 500. Gold touts play on people's fears and their belief that others will continue to share those fears to drive up the price; when in reality gold is a basic commodity and behaves as such. It even has a limited upside because as prices rise uneconomic means of production become viable; and there is a lot more gold that has not been recovered than there is demand.
Of course, it doesn't hurt that you tossed in "Fox News" to get all your liberal friends panties in a wad. And when Obama's monetary policy lead to rampant inflation ... well you will not look so smart.
Actually the Fed sets monetary policy and it is notorious for doing things that piss off presidents; to the point of being accused of acting to influence elections. Of course, you use "Obama" the same way as others use "Fox."
I'm a consultant - I convert gibberish into cash-flow.
Yep, some of them are doing exactly that. They're registered as investment banks, and treat whatever gold they have the same as they would USD. Do you have your gold analyzed for purity? I've seen 18 karat gold stamped as 24 karat and sold as such.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Yet you don't hear anyone complaining about that, do you?
The definition of a "ponzi" scheme is an investment that promises a return, where returns paid out today to yesterday's investors are funded by today's investors. That is precisely how Social Security works. Benefits paid today are funded by today's receipts.
That explains why the overwhelming majority of bitcoiners fell for this scam. Oh wait, they didn't.
Would it be an honest criticism of regulated markets for me to blame YOU for the 2008 crash and QE-infinity? Both methods have a failure rate.
"We should lock him up with violent offenders" doesn't require a coherent argument, there's no amount of logic that will change how fundamentally stupid and spiteful your brain is.
I'm no fan of the Fibbies. Long story but I've seen them do some dirty shit, and more of their shit has gone public as well, but I can just see them, though more likely States' AG's, prosecuting a straight-forward fraud case here. The SEC, though? They don't and should not have any jurisdiction. We shouldn't even want them to, and I really doubt this guy had gone public.
I invested in a good lunch...but now I am afraid my investment has turned to poo! Did the cafeteria defraud me? Should I contact the SEC?
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
Sorta like the rubes looking for a guaranteed profit and no risk in the completely SEC regulated environment, huh?
Too bad about all those SEC records pertaining to Enron, etc. that were lost with Building 7, ain''t it? Easily worth 3000+ lives to someone, though.
Except that litecoin and other alts are basically pointless (except for the ones that implement inflation, which are not pointless, merely worthless at this stage). Oh, one bitcoin is too large, if only there were a way pay a fraction... Oh wait, there is. Consider: one bitcoin can be divided up into 10,000,000 pieces. That's better than the USD, which can only be divided into 100 pieces.
The only reason I can think of for most of the alt-chains is to be a money grubber for the creators and early adopters. This is a case where I can say, most alt-chains probably are what people accuse bitcoin of, "pump'n'dump". Push the price up, and get out before it collapses.
Seriously, what can I bit with litecoins again? Is there anything I can buy with litecoins that I can't with bitcoins? So what's the point?
HELP MY ACCOUNT HAS BEEN HACKED BY AN ILLIBERAL ART STUDENT SET TO DESTROY THE INTERWEBZ!
Why at auction when you can just go to any gold and silver store or pawnshop and buy it at todays price?
There is no safety increase to physical control. As we saw in Zimbabwe during hyper-inflation other currencies quickly become far more valuable vs gold than usual.
If you are predicting total world economic collapse I would advise investing in lead wrapped in brass instead of gold.
...it is still an unregistered bank, which is illegal in and of itself.
You can't escape regulation just by doing business with bitcoin instead of dollars.
Paypal manages to escape regulation by doing business with dollars instead of dollars.
Divisibility does not solve this problem. The basic design of bitcoin causes it. This is because it is deflationary and was a massive value give away to early adopters. Also being easy to reproduce means people will, by making their own new versions.
The point is there is nothing magical about bitcoin. Why should anyone let the early adopters this massive advantage?
There is no reason not to have more digital currencies. The what can you buy argument is one you should avoid as bitcoins are not widely accepted at all.
According to the post the actual value of bitcoins has climbed at about 1% per day
Depends on when you bought. There was a run-up to 15 to 260 earlier this year, but it's been mostly downhill since then. Today, 87.
So, in essence what you're arguing is that it should be OK to con and defraud stupid people, but not to conspire to do so?
For some reason, I question the motives of someone who thinks running a confidence game should be legal.
No. You are absolutely wrong and ignorant. Money was produced based on reserves of value. Basically, it took wealth to create wealth. The sand ran out when the Bretton-Woods agreement was written. Not it is just a Ponzi scheme where the creators (a.k.a. scammers) have the exclusive right to print more sand. Educate yourself.
Yeah I want to declare an automatic Godwin when these stupid fucks bring up "mrurm umrm OBAMA,.." or "graug urgma FOX...". Sheesh.
You guys sound like 6 year olds having a dick waving contest. "My Dad can beat up your Dad AND Glenn Beck".
Jesus Christ, give it a rest.
-- You are in a maze of little, twisty passages, all different... --
It's Darwinism at its best.
If and only if you consider "having money" to be a trait worth selecting on.
...welcome and embrace our new CYA overlords!
it's consistent with my observations. This was a demonstration of just how well libertarian investors do in a (mostly) unregulated environment.
That's called "confirmation bias".
You misquoted me. I explictly said give him a fair trail and if found guilty lock him up. Note the 'if' there, I do not discount the possibility that the SEC got the wrong man or that what he did was technially legal.
If you really think upholding the law where that law is strongly aligned with morality and the social good is 'stupid and spiteful' then you are a sociopath.
Maybe. But I thought maybe it was due to the amount of money involved.
I wonder if the entire practice of using percentages to measure economic increase is wrong. And this wrong thinking is perhaps driven by greed? Percentage increases imply exponential growth, which we realize is impossible to sustain in the space we can reach if limited to a fixed maximum possible speed such as lightspeed. The only way to sustain a bank account that pays compound interest is ultimately have the inflation rate closely match it. In short, to fake it.
Growth can only be at an exponential rate over a short period of time, not indefinitely. Population has the capacity to grow exponentially, which makes percentage increases such a natural way to describe growth, but can never sustain it thanks to external limitations. Population only grows exponentially for a short time, in response to some change that increased the available resources, such as finding uninhabited land, a big war or plague, or a significant invention or discovery. Over a long period of time such as 10000 years, a savings account earning just 1% compound interest could easily be worth more than humanity's total output. Worth even more than the RIAA's claims of losses to piracy. It would be worth about 2^138 times the initial investment.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
I don't agree. He is a threat to society. He stole a large amount of money and should face a fair trail and a prison sentence if he is found guilty. Fraudsters should be locked up both to prevent them commiting crime again for a few years and as a clear warning to anyone else who would commit fraud. The stupidity of his victims is no excuse for his actions.
There is no reason why alternatives should not exist but there is no reason why they should either. BitCoins are divisable to tiny amounts so a copy that has a lower dollar value doesn't add anything.
Great I wasted 10 seconds reading your post and some more replying.
The only way to sustain a bank account that pays compound interest is ultimately have the inflation rate closely match it. In short, to fake it.
I think it's more correct to say that savings accounts reflect the inflation rate, not the other way around. Even in a flat, inflation-free economy, the churn of stupid decisions, retirements and investments will generate some growth for people lucky or smart enough to be on the winning side of the investments. The bank generally gets their money back whether a borrower's big idea succeeds or fails.
He was talking about smart people wasting time, not about /. posters!
One explanation about why he was able to carry this out was undoubtedly the fact that BitCoin it'self acts like a gullibility filter, attracting those that are both gullible and greedy.
Getting people beat up by violent offenders for stealing money isn't aligned with morality and social good you fucking dumb ass. It's not even an eye for an eye, it's closer to violently detaching someone's testicles because they accidentally hit your shoulder in a fully packed metro car.
Stealing people's money is not "a threat to society" of the same level as armed robbery, aggravated assault and murder. Most people don't even consider it a threat at all. You're probably more of a threat to other people than he is, with your attitude. Especially when the amount of money taken apparently scales up your level of violence.
You should take a hard look at yourself before calling other people sociopaths, you're one special kind of fucked up person I wouldn't want to hang with.
I take it you are in a similar line to business to the accused then. Sounds like you admire him, that's sad.
You are a classic sociopath, as proved by your trying to pass off non-violent theft as ok. It's not ok to us normal people and never will be.
Banks and politics are also a combination of pozi/pyramid schemes. We have to realize it.
Casteism
You are a classic sociopath, as proved by your trying to pass off non-violent theft as ok.
I'm not saying it's okay at all. I'm saying you're a sociopath for wanting someone to be beat up by violent offenders for it. A sociopath with severe reading comprehension problems.
But if you keep subtracting a couple of seconds at a time, you will eventually cross a boundary where that something could no longer have been achieved.
If you keep subtracting a couple of seconds, you're no longer talking about a couple of seconds per person, but the sum of all you've taken away. That's a different argument.
You still haven't addressed other people who waste your time. If you want to make time wasting on the order of 1-2 seconds illegal because of cumulative effects, then suddenly almost everybody on Earth is "guilty" of your new law. The guy who drove 5mph below the speed limit and delayed the hundreds of cars behind him. The guy who turned left and had to wait for oncoming traffic so everybody behind him missed the green and lost minutes of their lives (maybe that SHOULD be illegal, it is awfully annoying). The radio and tv stations that run ads that try to get you to buy something you don't need.
Humans are innately caring as well, or at least most of them besides you. Yes, we have material desires but we also want to enjoy the company of others, feel happy when people we care about are happy, and get satisfaction from making someone else's life a little better. Adam Smith's invisible hand aside, most enlightened civilizations realized long ago that "I got mine - screw you" makes for a pretty unhappy populace overall.