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It was not impossible to tell this was going on. https://twitter.com/patio11/status/370728763790594048 https://twitter.com/patio11/status/370728763790594048 N

It was not impossible to tell this was going on. https://twitter.com/patio11/status/370728763790594048 https://twitter.com/patio11/status/370728763790594048 Note the date. I only posted that after I was sure I could beat the libel suit; was pretty sure much earlier.

sillysaurus3 9y ago
Then why doesn't it say "Mt. Gox is probably insolvent"? It's also not very helpful to say "Told ya so" rather than "These are the signs to look for in general."
- patio11 9y ago
  The adjective I would have chosen was not "probably", but being any more explicit than I was might have earned me a "What did you know, when did you know it, and what was your part in this?" from either of two government agencies who could deport me by either pressing a button or failing to press a button.
  - sillysaurus3 9y ago
    Now that no one has the power to deport you, do you mind if we pose those questions? The answers would be informative for anyone who has to weigh which exchange to be using at any given time.
    - jerf 9y ago
      I'm not patio11, but in all seriousness, it is true that just the inexperience and immaturity of the people building these exchanges is sufficient evidence on its own. Here's me telling someone not to build a BitCoin trading platform on September 11th, 2011: https://news.ycombinator.com/item?id=2974770 https://news.ycombinator.com/item?id=2974770 Here's how that went over the next couple of years: https://en.bitcoin.it/wiki/Bitcoinica https://en.bitcoin.it/wiki/Bitcoinica https://www.dailydot.com/business/bitcoin-exchange-bitcoinica-hack/ https://www.dailydot.com/business/bitcoin-exchange-bitcoinic... In a way, the issue here is that if you want to operate in this space, you do need to take the discussion about BitCoin being money seriously. (Even if you don't think it's "money", it's still definitely a money-like asset.)
      - sillysaurus3 9y ago
        Wouldn't that have disqualified Coinbase? Also it's not really responsive to "What are some signs an exchange is insolvent?"
        eli 9y ago
        Being run by obvious amateurs is a sign of insolvency.
        sillysaurus3 9y ago
        Again: That would identify Coinbase as insolvent, right? Why or why not? I remember how amateurish Coinbase was in the early days, and you can look up a lot of the controversy on HN. People have been coming out saying they haven't processed $5k deposits, that they haven't responded to support claims in months, and on and on. If you're looking for "This exchange is run by amateurs," look no further than Coinbase. Yet it's not that simple. Coinbase has somehow managed to become the #1 exchange to go to if you're a US citizen that needs an easy way to convert BTC into USD. So I just don't get this line that if an exchange is run by amateurs, it's a sign of insolvency. We have evidence that demonstrates that's not true.
        tempestn 9y ago
        It's entirely possible that keeping your money out of Coinbase was the correct ex ante advice, despite their subsequent success. They may well have gotten lucky and succeeded (at least so far) despite their experience. I don't have any particular knowledge or experience with CB or BTC in general. Just pointing out that it's possible success was despite great risk, and the advice to avoid may have been entirely correct given the evidence at the time.
        eli 9y ago
        Yes, it's a warning sign. I don't think anyone should store more value in Coinbase than they are willing to lose.
        9y ago
throwaway613834 9y ago
>> I know people will say "Well, you should have known. The signs were all there." But there were no signs. > It was not impossible to tell this was going on. How do you tell, though? The comment you replied to was about the lack of signs, so claiming that signs existed doesn't really help anyone.
- patio11 9y ago
  How would one perform investigative journalism on a Japanese company? One way might be "write down everything they say", "identify the subset of these statements that an external actor has signal on", "identify the subset of those statements that the external actor would have a social or legal obligation to confirm or deny", and "write some on-dead-tree letters." Mt. Gox said lots of things, including some things which were, ahem, very effing improbable and yet which alleged very specific facts about people outside of the building. "We're totes solvent; all of our assets are on deposit at Mizuho", "All of our problems are due to banking partners", "The Financial Services Agency said we're compliant with all their regulations", "Japanese banks can't send more than 10 wire transfers per day; it's physically impossible because they're technologically backward", etc etc. This is sort of similar to "But how do you know that their application is vulnerable, $SECURITY_RESEARCHER?" The answer "I bothered to look" might be unsatisfying, but it is not inaccurate.
  - sillysaurus3 9y ago
    We understand you bothered to look. We're asking "What are the specific actions you took, so that in the future, we may take them? What did you discover that led to your tweet? Was it hard evidence, or was it more of a list of worrying signs?" Writing on-dead-tree letters is a flowery way of describing what you did, but it gives no actionable signal.
    - patio11 9y ago
      I'm sorry you lost money, sincerely. One of the reasons that I'm so vocal about my opinions on Bitcoin is that I think that, when it achieves its true value of 0, it will wipe out a lot of geeks of good will. I cannot agree that you had insufficient notice from me regarding my opinions of Bitcoin or operations in the Bitcoin economy. That tweet went as close to the line as I could without risking arrest, contemporaneously. It was preceded by probably a few hundred comments on HN and Twitter about Bitcoin and businesses in the ecosystem. I appreciate that you want a list of steps you can take in the future. I have described a way to reproduce the unpaid, unpublished original research project which I did, in sufficient detail for any competent researcher to reproduce it. You think that that series of steps is not actionable. I respectfully submit that you are not capable of reproducing it; these are two different things. You are illiterate in the language that the research was conducted in. I'm sorry; that is true, and it is the nicest possible way to phrase it unambiguously. You should, in the future, not make investments which you are incompetent to evaluate the risk factors of. If you must, you should secure the advice of competent professional advisors. If you believed yourself competent to evaluate the risks of doing business with Mt. Gox or believed the quality of the advice you had to be adequate, you should be skeptical of your self-assessments of your competence or your ability to evaluate competence in a professional advisor, and apply this skepticism to your reasoning process about future investments.
bgcallahan 9y ago
This looks like a completely generic tweet. I don't understand why there was any doubt about a libel suit. Really, memories of the alleged $20,000 per week consulting gigs which were miraculously abandoned surface again.

sillysaurus3 9y ago

Then why doesn't it say "Mt. Gox is probably insolvent"? It's also not very helpful to say "Told ya so" rather than "These are the signs to look for in general."

patio11 9y ago
The adjective I would have chosen was not "probably", but being any more explicit than I was might have earned me a "What did you know, when did you know it, and what was your part in this?" from either of two government agencies who could deport me by either pressing a button or failing to press a button.
- sillysaurus3 9y ago
  Now that no one has the power to deport you, do you mind if we pose those questions? The answers would be informative for anyone who has to weigh which exchange to be using at any given time.
  - jerf 9y ago
    I'm not patio11, but in all seriousness, it is true that just the inexperience and immaturity of the people building these exchanges is sufficient evidence on its own. Here's me telling someone not to build a BitCoin trading platform on September 11th, 2011: https://news.ycombinator.com/item?id=2974770 https://news.ycombinator.com/item?id=2974770 Here's how that went over the next couple of years: https://en.bitcoin.it/wiki/Bitcoinica https://en.bitcoin.it/wiki/Bitcoinica https://www.dailydot.com/business/bitcoin-exchange-bitcoinica-hack/ https://www.dailydot.com/business/bitcoin-exchange-bitcoinic... In a way, the issue here is that if you want to operate in this space, you do need to take the discussion about BitCoin being money seriously. (Even if you don't think it's "money", it's still definitely a money-like asset.)
    - sillysaurus3 9y ago
      Wouldn't that have disqualified Coinbase? Also it's not really responsive to "What are some signs an exchange is insolvent?"
      - eli 9y ago
        Being run by obvious amateurs is a sign of insolvency.
        sillysaurus3 9y ago
        Again: That would identify Coinbase as insolvent, right? Why or why not? I remember how amateurish Coinbase was in the early days, and you can look up a lot of the controversy on HN. People have been coming out saying they haven't processed $5k deposits, that they haven't responded to support claims in months, and on and on. If you're looking for "This exchange is run by amateurs," look no further than Coinbase. Yet it's not that simple. Coinbase has somehow managed to become the #1 exchange to go to if you're a US citizen that needs an easy way to convert BTC into USD. So I just don't get this line that if an exchange is run by amateurs, it's a sign of insolvency. We have evidence that demonstrates that's not true.
        tempestn 9y ago
        It's entirely possible that keeping your money out of Coinbase was the correct ex ante advice, despite their subsequent success. They may well have gotten lucky and succeeded (at least so far) despite their experience. I don't have any particular knowledge or experience with CB or BTC in general. Just pointing out that it's possible success was despite great risk, and the advice to avoid may have been entirely correct given the evidence at the time.
        eli 9y ago
        Yes, it's a warning sign. I don't think anyone should store more value in Coinbase than they are willing to lose.
        9y ago

throwaway613834 9y ago

>> I know people will say "Well, you should have known. The signs were all there." But there were no signs. > It was not impossible to tell this was going on. How do you tell, though? The comment you replied to was about the lack of signs, so claiming that signs existed doesn't really help anyone.

patio11 9y ago
How would one perform investigative journalism on a Japanese company? One way might be "write down everything they say", "identify the subset of these statements that an external actor has signal on", "identify the subset of those statements that the external actor would have a social or legal obligation to confirm or deny", and "write some on-dead-tree letters." Mt. Gox said lots of things, including some things which were, ahem, very effing improbable and yet which alleged very specific facts about people outside of the building. "We're totes solvent; all of our assets are on deposit at Mizuho", "All of our problems are due to banking partners", "The Financial Services Agency said we're compliant with all their regulations", "Japanese banks can't send more than 10 wire transfers per day; it's physically impossible because they're technologically backward", etc etc. This is sort of similar to "But how do you know that their application is vulnerable, $SECURITY_RESEARCHER?" The answer "I bothered to look" might be unsatisfying, but it is not inaccurate.
- sillysaurus3 9y ago
  We understand you bothered to look. We're asking "What are the specific actions you took, so that in the future, we may take them? What did you discover that led to your tweet? Was it hard evidence, or was it more of a list of worrying signs?" Writing on-dead-tree letters is a flowery way of describing what you did, but it gives no actionable signal.
  - patio11 9y ago
    I'm sorry you lost money, sincerely. One of the reasons that I'm so vocal about my opinions on Bitcoin is that I think that, when it achieves its true value of 0, it will wipe out a lot of geeks of good will. I cannot agree that you had insufficient notice from me regarding my opinions of Bitcoin or operations in the Bitcoin economy. That tweet went as close to the line as I could without risking arrest, contemporaneously. It was preceded by probably a few hundred comments on HN and Twitter about Bitcoin and businesses in the ecosystem. I appreciate that you want a list of steps you can take in the future. I have described a way to reproduce the unpaid, unpublished original research project which I did, in sufficient detail for any competent researcher to reproduce it. You think that that series of steps is not actionable. I respectfully submit that you are not capable of reproducing it; these are two different things. You are illiterate in the language that the research was conducted in. I'm sorry; that is true, and it is the nicest possible way to phrase it unambiguously. You should, in the future, not make investments which you are incompetent to evaluate the risk factors of. If you must, you should secure the advice of competent professional advisors. If you believed yourself competent to evaluate the risks of doing business with Mt. Gox or believed the quality of the advice you had to be adequate, you should be skeptical of your self-assessments of your competence or your ability to evaluate competence in a professional advisor, and apply this skepticism to your reasoning process about future investments.

bgcallahan 9y ago

This looks like a completely generic tweet. I don't understand why there was any doubt about a libel suit. Really, memories of the alleged $20,000 per week consulting gigs which were miraculously abandoned surface again.