So its easy to get these returns on paper as long as you naively assume almost everyone will pay you back, but the reality is likely a whole lot different. I will be very curious to see how much of his loans Patrick will be able to recover, considering how many of the people he totally trusted have already defaulted and/or are now branded as scammers.
Patrick scammed himself, unfortunately.
I think that's right.
My thoughts (not that anyone asked):
1. WifeOfStarfish reads like a sockpuppet to me. If I were Patrick, I'd not want to show this to anyone.
2. Joel offered the choice that Patrick is a scammer himself or an idiot, but I'd like to offer a marginally kinder alternative, which I think is the truth: he was duped.
If one really believed in Pirate, one would invest almost every scrap of liquidity in him. That doesn't make him an idiot so much as a mark--very smart people can fall for scams. Cult members have higher than average intelligence. It just happens that some people fall for certain stories. Patrick is also a believer in Bitcoin, and he perhaps he wanted to do his best to foster the supposed bitcoin economy. Given the apparent demand for lending and the apparent market for deposits that were supposedly safe from Pirate exposure, perhaps Patrick can up with the idea for Starfish BS. He might have even done what he thought was the honorable thing by putting his own faith in Pirate, and giving the alleged depositors a pure "non-Pirate" opportunity.
If my theory is right, he's a double victim--first from Pirate, and second from many of the borrowers who were unsurprisingly only paying high rates to scam/gamble/invest in Pirate (same difference). The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the
former latter, especially if he tries to spread the loses evenly, I'm not sure I could fault him.