In this case PH, as you specifically pointed out, PH's assertion was:
"in the event BS&T goes bust, I have more than enough assets to cover that"
My core contention is that both parties are equally at fault for their mistaken belief that Patrick's business model, fully understood by both parties, was fundamentally sound.
Only PH can verify what his assets are - MP can't.
There's no evidence Patrick ever misrepresented his assets. Both sides knew what they were -- high interest Bitcoin loans to people who swore they weren't borrowing money to loan to Pirate. That was sufficient information to realize there was likely to be huge correlated risk, yet neither party did. Outsiders realized this.
And no - both parties did NOT make the same mistake. PH's mistake was not properly evaluating his OWN investments to ensure they were pirate-free - compounded by asserting that to obtain new business. MP's mistake was believing PH's assertion. If someone portrays themselves as competent in an area (in this case, assessing the viability of loans) then subsequent evidence that they weren't as competent as they liked to think doesn't remove from them their contractual obligations just because "well, everyone should have known he was wrong."
MP didn't believe PH's assertion. MP reached the same conclusion from substantially the same information.
Aug 10 08:10:56
well that works. i'd like to put 500 bitcoins with you
Patrick's methodology wasn't a secret. Outsiders realized that his belief that there was little correlated risk couldn't be true.
You are saying that Patrick's mistake is that he didn't do the impossible. I am saying Patrick's mistake was that he believed the impossible.