... Uhhhhh... So, FC makes up some direct shares that don't exist, tells burnside they're legit shares belonging to some made-up usernames (which FC controls, of course) ...
...
I must be pretty dumb, because I'm not seeing the difficulty.
Yes. Except all dividend payments are public, so any new shares added would be noticed within a week.
Nobody is saying it couldn't be done. I'm saying it's a stupid idea. If friedcat and his team wanted to screw the shareholders, they could do it in many, many ways that are simpler and less likely to be noticed than by issuing new shares.
Yeah, so they'd have to take one less dividend on their own shares for each one they'd manufactured. It'd be a long con, betting that the value of the dividends issued to the manufactured shares would be less than the value of those shares when sold.
You're right that this is not the real concern. If Friedcat was bent on defrauding shareholders, there would be many better options. But that potential IS there, and we've had so many past catastrophes (Bitcoinica, Pirateat40) and failures (BFL, now Avalon) that I'm surprised to see so little discussion of the risk.
Now, that could be a ponzi scheme. So could AM, theoretically.
Assuming you understand what ponzi means, there goes any last remaining trace of credibility you may have had.
I am devastated by the loss of your approval.