MtGox and the death of Bitcoin^w mass media

Posted on February 27, 2014

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Over on Twitter Phil asked me what I thought about the death of MtGox and the future of Bitcoin. I’d make 3 quick observations on the current issue:

1. This is a good reminder how many people have come into Bitcoin in the last 6 months and are realising the risks. But it’s nothing new. Being ‘goxxed’ was already in the lexicon along with getting ‘zhoutonged’. MtGox has always been risky. You learn Risk Management quickly when there’s no fallback to insurance or a state.  That’s not necessarily a bad thing. In fact, Gox has been so ‘separate’ from the rest of the Bitcoin world (in terms of exchange rate but also general reliability, customer support, etc) that killing it off can’t come soon enough, imho.

2. The mainstream media coverage this time round seems to have been quite a bit more vociferous, and out to ‘get’ Bitcoin.  Makes me wonder if larger political pressures are really coming into play as  cryptocurrencies really start to take hold. It’s worth noting that FT coverage is actually pretty balanced on Bitcoin now.

3. From what I’ve seen, the allegedly leaked Gox Crisis document is pretty dire. My personal take is it’s probably a hoax, as it has some classic signs (maybe a separate post for this), but that MtGox just have a really bad business setup and lost money through their own shiteness. But it’s also been amazing to see so much mainstream media not questioning the document. I can’t work out if that’s evidence of dumb journalists or a hidden agenda. (Probably both.)

In short, we’ve been through it before. I think there’s been some contagion on other exchanges, but really Gox has been separated enough for a while now and I’d be surprised if it really bit into medium term prospects.

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