Hacker News Reader

Comment by chaud | Hacker News Reader

I would imagine it also has something to do with the guy that has been paying people 7% interest per week to hold on to their bitcoins: https://bitcointalk.org/index.php?topic=50822

View on HN

Just in case that isn't already setting off your alarm bells, here's the math:

7% interest per week, up to 5000 BTC:

http://www.wolframalpha.com/input/?i=1.07^52

3372.53% per year

So if I deposit 148 BTC today, he's promising to pay me 4991.3444 BTC in one year. Note that he only takes referrals, a classic way to drive up demand by limiting availability of the profits.

If it sounds too good to be true, it probably is.

Sounds like a Ponzi scheme

It could also be an idiot who is trying to engineer some sort of stability in the currency at his own expense. That is the only other thing I can think of, and it seems quite unlikely.

Interesting reading, thanks. Do you have an opinion if this is a ponzi scheme? If it isn't, do you think its sustainable over any decent length of time?

I can't think of anything legal that would net you 7% a week in a remotely safe manner. He has been going for a while now and only recently reduced his interest rates, so it may go on until there aren't enough new people signing up anymore.

I got in before the spike last summer and sold on the way down, netting some free hardware and USD, so I put what was left from that in. Worst case, I lose money that I earned through luck. Best case, new computer hardware!

That's been going on for months, although the discussion about it has become deafening lately.

Reply on news.ycombinator.com