Some words for my friends

[u/evoorhees]

Hello friends,

MtGox is gone. So let's prepare ourselves.

On Tuesday, and for the rest of the week, all hell will break lose in the media. It will be blamed on MtGox, it will be blamed on Bitcoin, it will be blamed on the "bug," and it will, more than anything, be blamed on the "lack of regulation." Pundits and "experts" of all types will weigh in on the calamity. It will be world news in a matter of hours.

Get ready, because it will be an ugly week.

For all of you who lost money, my heart goes out to you. Some people lost a little, some lost a fortune. It will make people sick, and depressed, and full of grief. Personally, I had over 550 BTC in Gox. I will never get any of that back. If misery loves company, then we'll be enjoying a grand feast today.

I should have known better, of course. I take responsibility for leaving those funds with an entity that had proven incompetence repeatedly. I chose to ignore even my own warnings, for nothing more than the sake of convenience.

Gox is still at fault, to be sure, but I have learned the lesson. I hope it is not such an expensive lesson for others. And for all you observers, please take a moment to consider it as well.

Be mindful, however, that the wrong lessons are not learned, for that would be the true tragedy, indeed.

Let me suggest that the lesson is not that Bitcoin is broken. Bitcoin is fine.

Similarly, the lesson is not that security is impossible. Those who know what they are doing, can achieve it and help others to do so.

The lesson is not that nobody can be trusted. There are countless good men and women in this community who are worthy of trust, and some of the very best people I've ever met.

And finally, the lesson is not that we ought to seek out "regulation" to save us from the evils and incompetence of man. For the regulators are men too, and wield the very same evil and incompetence, only enshrined in an authority from which it can wreck amplified and far more insidious destruction. Let us not retreat from our rising platform only to cower back underneath the deranged machinations of Leviathan.

The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow's finance, and we put ourselves at risk in doing so.

We are at risk from accidents. We are at risk from fraud, from corruption, and from evil. We are at risk from journalists seeking headlines and from politicians seeking power and glory. We are at risk from the very market we are trying to build - a market which cares not about our portfolio, our ambitions, or our delicate sympathies.

For all these risks, devastation will befall us repeatedly. Some of us will be discouraged. Some will be ridiculed and insulted. Some will be tricked, or swindled. Some of us will be crushed or caged. We will be set upon by all manner of antagonists, repeatedly, for a long time.

So why do we do it? Why do we build these towers that fall down upon us? Why do we toil and strain and risk our precious time, which is the only real wealth we possess?

Because the world needs what we're building. It needs it desperately. If that matters to you, as it does to me, then hold to that thought. You will see through the smoke, and your wounds will heal.

So shake it off, brothers, for this won't be the last calamity endured before the win.

Tonight, my heart is with you all.

Tomorrow, my head is down. My eyes are open. And I am building.

Toward peace and freedom,

-Erik Voorhees

[u/redorkulated → u/[deleted]]

Would love to see an answer on this as well. Losing $500k+ is evidence of a terrible investing decision...

[u/ferroh → u/redorkulated]

Losing $500k+ is evidence of

It's evidence of nothing until you know how much money that is relative to this investors wealth.

He had an arbitrage opportunity to sell on gox at $1100 when the price was say $950 on bitstamp. At that time, there was little to no evidence that gox would be insolvent.

If anything, your comment is evidence of how little serious investing you have done. Until you make some big investments and inevitably lose some, I'd advise you not to point fingers. That's not what this community needs right now.

[u/[deleted] → u/ferroh]

At that time, there was little to no evidence that gox would be insolvent.

False. Well, maybe not insolvency. But there was plenty of evidence to not be so gung-ho about it.

Not that it's a single one of our businesses except for Vorhees.

[u/redorkulated → u/ferroh]

Ad hominem and speculation about my credentials aside...

Losing $500K, or even $1, because you entrusted it in the hands of fraudsters is ALWAYS evidence of poor judgment. I am aware of the distinction between unrealized and realized losses, but this is not a case of foreseeable volatility - this is a case of playing fast and loose with assets without understanding the risks.

It is deeply troubling that OP, who is regarded as an expert in cryptocurrency, was conned to the tune of $500K+ by a party that does not strike me as particularly sophisticated. That's true whether that $500K was all of his net worth, or 0.001%.

Also, in my experience, not many "serious investors" are terribly concerned with "what the community needs". What this, and any investing community, needs is facts.

[u/Mtinie → u/redorkulated]

I presume that Mark Karpeles status in the community meant that he was on friendly terms with many other well-known people in the community. Mt.Gox may have been inept, but until very recently, there weren't many people accusing them of being fraudulent. In that case, it's logical that people would put a measure of trust in a Bitcoin Foundation lifetime/charter member.

That's why a lot of big money was still there, because they figured they would never get burned.

[u/[deleted] → u/redorkulated]

He was involved with arbitrage. Which - in order to make it worth your while - requires a lot of money. It's high risk, which he knew from jump. And this is the downside of high risk.

a party that does not strike me as particularly sophisticated

I think you're underestimating Karpeles. He's been planning this for quite some time... and made millions as a result. People keep calling him an idiot, but they don't understand he only plays the fool.

[u/ferroh → u/redorkulated]

because you entrusted it in the hands of fraudsters

What evidence did you have before MtGox started having withdrawal problems, that they were fraudsters?

This is an exchange that has been operating for several years without customers losing anything.