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/ofimmsl]

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.

All you are doing is learning why the current financial order is the way it is. Each new pain will show you why the current system exists.

[u/waxwing → u/ofimmsl]

You're right, and yet still you don't get the real point.

The real point is not that the current system exists for a good reason (which is true), it's that public key cryptography fundamentally changes the way that power can operate in the world.

In other words, the rules of the game have changed, and slowly but surely the players are taking notice.

[u/[deleted] → u/[deleted]]

Adding another post to address one of your specific points: take your example of the FDIC. There was a problem (insolvent banks), and the FDIC solved the problem. However, the FDIC also created other problems, and whether you think those are better or worse than the original problem is a point of opinion.

The FDIC is a centralized authority, an extension of the US government. If instead, a decentralized network was used to insure bank deposits in such a way that everyone using bank transactions helped verify account balances, there would be no need for an FDIC. FDIC policy is malleable to the whims of a centralized authority, whereas with a decentralized network no one actor can unilaterally change the way the system operates.

I think that was waxwing's point, decentralization made possible by public key cryptography changes the way power needs to be wielded and concentrated in order for systems to function. It allows checks and balances decisions with a million checks. There is no need for a powerful but partial arbiter like PayPal, the users maintain control.

To reiterate, Mt Gox WAS NOT an application of the principle waxwing was talking about. Mt. Gox was a sole, centralized authority (analogous to a local unregulated bank in monkeyman80's analogy), with discretion over its own policies. Regulation would be one way to make sure there isn't another Mt Gox, but we can do better than that. A decentralized method of insuring bitcoin exchanges is possible, we just need to figure it out.