Announcing a Return to our Roots: The All-New Bitcoin Magazine

Bitcoin Savings & Trust – Genuine or Joke?


         Bitcoin Savings & Trust – Genuine or Joke?

As many have predicted was an inevitable future, the man known only as Pirateat40 on announced the closure of his investment service, the Bitcoin Savings & Trust, earlier today, citing complications in performing larger transactions as the primary reason.  The interest rate given to investors was a staggering 7% per week for large investments, a number that could not have been sustainable in the long run and could only be matched in non-Bitcoin economies with ponzi schemes and similar cons.

Although it remains unconfirmed as of yet whether Pirateat40’s proposed investment service was or was not in fact a ponzi, the truth will undoubtedly be more clear next week: he has promised to pay back all of his users within a week, and begin those paybacks starting on Monday.  We will find out very quickly whether he has the ability to repay all customers, or if those words were the last we’ll ever hear from him.

After briefly touching $15/BTC prior to the news of the shutdown, the market had a stark reaction when the announcement was made, as it is fairly well known that deposits with pirate exceeded at least several hundred thousand BTC, if not more, and could be used to greatly affect the Bitcoin price. Within an hour, the price per bitcoin had dropped to almost $10 before stabilizing around $12.50.  Two trains of thought dominate recent market discussions: either Pirateat40 will be able to repay all of his investors, flooding the market with BTC that had been previously locked up and driving the price down as some of the investors cash out, or Pirateat40 was running a ponzi and will simply run with the currently-held funds, leaving no potential for cashout in the immediate future, and potentially more buying, as investors seek to replace the lost BTC.  Even the latter scenario does legitimize a price drop; if such a large con was to be revealed, it could shake confidence in Bitcoin considerably, and that uncertainty could lead to further price drops.

Many investors in the program shared the belief that it was a ponzi scheme, but openly admit to investing in it (or pass-throughs made for smaller investors) anyhow.  If reinvested, the return on investment at 7% interest rate would mean a doubling of one’s account balance about every 10 weeks.  And, given that the service has been running since early November 2011, a user could have conceivably seen an increase in their account balance of 700%.  These extravagant returns attract investors who believe they will be able to pull out of a scheme before it collapses, even though they might know it is a scheme to begin with.

Keep a watchful eye on come Monday - it should be very telling as to whether investors will be seeing a bitdime of their money back or not.

Do you expect Pirateat40 to pay back his customers?  Tell us in the comments below, or send an email to


Ten Years Later, a Reflection on Bitcoin’s Genesis and Satoshi’s Timing

Rather than focusing simply on what the genesis block is, today is a day to reflect on what the genesis block represents.

Colin Harper

Op Ed: From Gray To Black and White: Traditional Regulations Come to Crypto

For the crypto industry, recent developments — at both the federal and international levels — signal that the time for plausible deniability or unregulated freedom is coming to an end and more traditional regulations are moving to the forefront.

Courtney Rogers Perrin and Joshua Lewis

Bitcoin Price Analysis: Blowing Through Support Levels on the Way to $3,000

Bitcoin continues to tumble lower and lower as it struggles to claim any footing in the market. It’s down almost 50% in three weeks and it’s showing very little sign of stopping. It’s currently clutching onto the $3,500 values but it doesn’t look like it can hold on much longer.

Bitcoin Schmitcoin

Op Ed: SEC’s Latest Declaration Creates Legal Minefield for Digital Assets

This broad, authoritative declaration is not unexpected, as, to date, the SEC has stated that all digital assets — regardless of whether they function as alt coins or utility tokens — are securities at least initially and, thus, subject to its jurisdiction.

Huhnsik Chung and Nicholas Secara