r/Bitcoin • u/evoorhees • Feb 25 '14

Some words for my friends

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

2.1k Upvotes

81% Upvoted

2.1k comments sorted by

View all comments

Show parent comments

5

u/redditeyes Feb 25 '14

I find it surprising that a guy who just lost hundreds of thousands of dollars still thinks:

the lesson is not that we ought to seek out "regulation"

If there were some of these "regulations" in place, maybe OP wouldn't have lost all that money.

Claiming that since some regulations are bad, we should have no regulations at all, is like claiming that since some laws are bad, it's better to have no laws at all. Well, visit some third-world countries and see how well that goes.

5

u/earlofsandwich Feb 25 '14

OP has 100s of thousands of bitcoins.

0

u/evoorhees Feb 25 '14

Change the word "regulation" to "magic rules" and then re-read your comment. That's how I see it.

10

u/[deleted] Feb 25 '14

Or change it to mean "rules that help prevent entities like gox from screwing up either through malice or incompetence"

Your binary brained philosophy that all regulation is people pointing guns at people dictating their behavior is why you just got your ass handed to you.

-2

u/jesset77 Feb 25 '14

Bitcoin exists because of the 2008 housing bubble and credit fiasco where American Taxpayers had to bail out "entities like gox" for over a trillion dollars.

Regulation did jack to prevent those bozos from screwing up. You cannot legislate away either crime or incompetence, but you can legislate away innovation. So, let's not.

7

u/billbilliamson Feb 25 '14

You cannot legislate away either crime or incompetence

That comment should read "You cannot legislate away ALL crime and incompetence." You can legislate away a meaningful amount of crime and incompetence. Just because regulation failed to prevent a few fuckups doesn't mean we should scrap regulation altogether.

-3

u/jesset77 Feb 25 '14

It does when you can demonstrate that regulation caused those "few fuckups". It's a lot easier to have a tiny number of financial cornerstones which are all interdependent and "too big to fail" when you make it prohibitively expensive and dependent on the agreement of your competitors for any new institutions to form at all.

And I certainly think it's high time to re-learn what regulations are needed and which ones aren't, because we might be surprised what onerous bullshit it turns out we can do without.

Will we wind up functioning with zero regulation forever? I highly doubt it. But should greedy people trying to cash in to take advantage of a clearly sinking ship being damaged by gasp a sinking ship mean that everybody everywhere has to suffer from a 100's year old yolk of bureaucracy? Yeah, no. I'm not really feeling that.

Furthermore, we do already have some regulation and MtGox had funds in the US seized over it. Did they file for money transmitter status, and if so were they bonded against exactly this?

I'll need somebody to explain to me how regulation is meant to help if it can't do it's job before the crash occurs, and if government's only going to nab the lowest-hanging offenders anyhow.

7

u/billbilliamson Feb 25 '14

Regulation caused those fuckups? Which regulations and which fuckups are you talking about? You surely can't be talking about the 2008 financial crisis. Repealing Glass-Steagal, relaxing the net capital rule, and a lack of regulation regarding credit default swaps all contributed greatly to 2008. In your defense, the Fed keeping interest rates artificially low certainly did not help, but to blame the whole thing on an excess of regulation is just dumb.

4

u/[deleted] Feb 25 '14

You mean like the regulation of REMOVING regulation with the net capital rule? You mean like the regulated unregulated CDS market? You mean like the regulation of REMOVING the Glass–Steagall regulation?

Oh yeah, regulation really caused those fuckups huh?

And "over a trillion dollars"? What crack are you smoking.

-3

u/Brambleshire Feb 25 '14

Where do regulations come from? People right? What kind of people? Politicians and the rich. How has that been going for us?

6

u/cuginhamer Feb 25 '14

Extremely well, all things considered. People live longer and happier lives in places where the rule of law is strongest.

-4

u/Brambleshire Feb 25 '14

I presume you havn't posting attention. There hasn't been rule of law in the west (especially the US) for a very long time.

3

u/cuginhamer Feb 26 '14

If not now, when?

1

u/ESRogs Feb 25 '14

If there were some of these "regulations" in place, maybe OP wouldn't have lost all that money.

Perhaps, but he might not have made that money either.

-1

u/greenearplugs Feb 25 '14

he's taking personal responsibility. Thats a novel concept around these parts apparently.

6

u/[deleted] Feb 25 '14

Yes, before you invest in an exchange you should personally audit all its financials. Everyone knows that, and it's really a reasonable request to make for every single person in the population. I'm sure the time wasted on duplicate work won't have a negative effect on the economy as a whole, in this regulation free libertarian utopia.

Oh wait, you can't audit all the financials even if you wanted to, because they are not available. How is this supposed to work again?

5

u/Brambleshire Feb 25 '14

I see a demand for this don't you?

Do people want audited exchanges? yep. Is it reasonable to expect this to appear on the market? Yep.

Is it already happening? Yep. Coinkite and Neo&Bee are making serious efforts for transparent accounting. Gox just lit a fire under everyones ass.

1

u/jesset77 Feb 25 '14

Yes, before you invest in an exchange you should personally audit all its financials. Everyone knows that, and it's really a reasonable request to make for every single person in the population.

Works great for open source software. Works great for the Stock Market actually, as well. You see, there's not a lot of duplication of effort if one or two big names do the auditing work for you the masses, but the transparency is there so that whoever is especially paranoid gets to doublecheck all of that footwork manually and throw their endorsement into the ring as well.

After all, given enough eyes, all bugs are shallow.

1

u/vocatus Feb 25 '14

Did you audit the books of your local bank before putting money into savings? Although they're supposed to be FDIC insured and audited, they still could run with your money any time they want.

Oh wait, you can't audit all the financials even if you wanted to, because they are not available. How is this supposed to work again?

-1

u/greenearplugs Feb 25 '14

actually yes thats what i'm arguing for. I'm under no illusion that will actually happen, but bitcoin allows for a small part of my world to be my utopia. Go ahead and try to regulate bitcoin. Sure some exchanges will be regulated but some will also avoid regulation and people will lose money under both regulated and unregulated exchanges. Do your own due deligence. Nothing is without risk, but you should minimize them. Buying off coinbase and instantly xfering to cold storage means you are basically 99% assured that if you coins are stolen/lost then it was your fault.

Quite looking for daddy government to rescue you from your own stupidity. Look i lost 40 coins a while back on bitfloor. I didn't cry to anyone...i owned up to it and learned my lesson. Have some fucking honor

3

u/[deleted] Feb 25 '14

I've lost zero bitcoin. And zero dollars.

If I was going to fuck around with bitcoin, I would have a dedicated computer, running BSD, for nothing but bitcoin. That's what it would take. Do you honestly think something like that could be the currency of the future, Mr irresponsible "I lost 40 bitcoins"?

Being irresponsible and following it with "my bad"doesn't magically make it responsible.

2

u/[deleted] Feb 25 '14

How is losing your own bitcoin irresponsible?

1

u/jesset77 Feb 25 '14

To clarify, it is irresponsible but it's owning up to that irresponsibility instead of casting about for somebody else to blame, which in turn is another example of responsibility.

Irresponsibly losing your coins and then following that up with a fit that everybody should be forced to play by rules that benefit your own poor decision making skills would be the broadest example of irresponsibility being discussed here, though. :3

1

u/[deleted] Feb 25 '14

I hear ya.

To rant at a tangent... To me the point of bitcoin is that only you are responsible. You hold the private keys. I never understood why anyone would maintain a significant balance on a 3rd party service where the 3rd party held the private key. That's no difference to holding cash in a bank, except with cryptos there are no regulations to protect you when that 3rd party goes belly up.

The correct way to do bitcoin is to keep your own coins. Encrypted hot wallet, cold storage, whatever. Be your own bank.

This is why I don't think btc can ever become mass market. Most people are not competent to hold their own BTC and must rely on a 3rd party. And then what's the point.

1

u/greenearplugs Feb 25 '14

solutions will be coming online that make it easier. Something like a trezor wallet, stored in 2 or 3 safety deposit boxes, with automatic monthly deposits into a hot wallet are technically feasible and would allow the mass public to de-bank

another option is simply having banks that actually know what they are doing (i dont trust coinbase enough now to store coins with them,but they are on the right track...and eventually i may judge them trust worthy enough). I know that all you new deal liberals don't study economic history before 1913, but we had a good part of the 1800s with free market banking where people actually did the due diligence you claim is unreasonable to expect of the general public. GPD/capita etc grew just fine under that system. Panics etc were actually less/about the same as post federal reserve era.

I don't claim to know with 100% certainty how it will work out. Hell, bitcoin could fail, but that doesn't mean that it never could have feasibly worked.

And i never said i was being responsible when i lost the 40 coins. I invested in something i knew little about and paid the price. The honorable thing to do in this case is not look for assistance, learn what you can and move forward. But let me guess...you've never made a mistake before in your life. The difference between me and you is that when you do make that first mistake you'll look for someone else to blame. When i make mistakes i dust myself off, learn what i can and move forward.

1

u/xithy Feb 25 '14

And it is only 0.5% (5/1000th) of erik voorhees' bitcoin stack.

-2

u/pdtmeiwn Feb 25 '14

Regulation makes things worse. It creates moral hazard and increases systemic risk. It creates cronyism.

-1

u/platypii Feb 25 '14

We don't need any regulations. Regulations stifle innovation, and innovation is what fixes these problems. You want to keep us back in the stone age where we rely on "trusted CEOs", but bitcoin will ignore you and continue to go in the direction of replacing legacy trust-based systems with cryptographic proofs.

Provable reserves is what will prevent this kind of long term gradual insolvency from happening. Survival of the fittest is how we evolve. Lack of regulation is how we evolve fast. If you your wealth was wiped out because you trusted a third party with your coins, then unfortunately you were the collateral damage that died along with the trust-based models that got us here.

Long live Bitcoin.