Quote from: dooglus on July 04, 2014, 03:12:00 AM

Quote from: Bizmark13 on July 04, 2014, 12:25:26 AM

Quote from: dooglus on July 01, 2014, 08:03:09 PM

One criticism I would make is that he's not clear about the end game. What happens when it comes to be payout time and he only has 75% of the amount he needs to make a payout?

Does he:

1) shut down, and keep the remaining funds for himself?
2) shut down, and make a final 75% payout?
3) skip this payout, wait for new deposits, then continue business as usual whenever there's enough to make a full hourly payout?
4) something else?

It would be good to have that clearly specified.

If my understanding of ponzis is correct, I would think that if new deposits slowed down, payouts would simply take longer and longer to fulfill.

It really depends on the operator.

"Bent" operators may decide to close the scheme as soon as the rate of new deposits slows to below the rate of outgoing payments. If their aim is to run off with the coins then it makes sense to stop when the available "haul" is as big as possible.

Even a legit operator may decide to close the scheme as soon as there are not enough coins available to make a regular payout. So long as that is announced up front I think that's OK. We just need to know what the rules are.

In this case I think he has said that he will run the scheme indefinitely, just skipping hourly payouts if he doesn't have enough to make a full payout.

@Dooglus, your comments, including the previous post, are very true, it's a good description/analysis of how this scheme operates and what could be the possible consequences, without adopting a positive or a negative bias towards the scheme.

I've taken some time to do some calculation, to see, at least hypothetically, what the numbers tell. I assumed that one User would put in 1 BTC and receive 1,5 BTC in 6 days. Obviously the real scheme operates in a different manner, with various Users putting different amounts of money, but it evens out over time. Also, the real scheme uses hourly payments and Ive only considered a full 6-day cycle per member.

One more thing that is worth noticing is that the simulation assumes that every User would withdraw his Bitcoins, would not send them again into the scheme. I guess a lot of present Users of the real scheme are willing to reinvest what they have received, thus creating a case as we have with banks, where the amount owed by the banks to their customers is higher than the banks real holdings.

After level 3, to sustain the operation, for every User there is a need of two more Users to "donate" their deposits (a part of them). I calculated it only for 10 levels as I've run out of paper (using 4xA4) doing an Excel sheet would take me more time. It was kind of fun, I hope the operation doesn't get stuck at the same point as I did

Those are my best wishes towards people who put in the money.

If you can see any flaws in the calculations or in my reasoning as to the simulation, Id be happy to hear about it. Ill take some time later to review my assumptions to examine if there are no mistakes, or if it can be done better to suit the "real" operation. Maybe anyone knows a Ponzi for Dummies book, I bet there is a lesson to be learned here.

http://s12.postimg.org/ymagrwogt/10_Level_Pyramid_v22.jpg

Here's a higher resolution image:

http://s30.postimg.org/s3ryiwuy9/10_Level_Pyramid_v1.jpg

The address chart balance is a great source of information, I would still consider this operation an interesting experiment.

Quote from: bitponzi.io on July 04, 2014, 05:50:07 PM

Sure, this is really interesting indeed, all ponzi mechanics is open for everyone to see.
When considering the sustainability one should also take into account cash flows, not only the balance chart. If you look at this plot (number of transactions per day) https://blockchain.info/charts/n-transactions?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=1PoNzi7PGzRyvc9KWYBcaauS3oeJqa5vFg you can see that the number of transactions grows, which actually stabilizes the program.

Quote from: dooglus on July 04, 2014, 05:09:26 PM

Quote from: bitponzi.io on July 04, 2014, 07:03:26 AM

Yes, this is correct. If there's not enough funds, well, that's it. Let's wait for some new funds.
Actually it can be seen that this shouldn't be the case for quite a while

The chart of the balance at the fund's address is interesting.

It looks like you're about 24 hours from ruin all the time if no new funds are deposited.

Look at the steepness of the drops, and how soon they would hit the zero line if nobody deposited:

http://i.imgur.com/5c21nJo.png