15 ms·

It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, a

by blhack 13y ago

It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. -- MtGox was (past tense is probably appropriate here, but for the sake of anybody who had coins there, I hope not) a startup that failed spectacularly, and publicly, and took a TON of peoples' money with it. The transaction malleability thing was poor programming on the part of gox. Remember that we have ALL fucked up at some point, just luckily for most of us, "fucking up" doesn't mean losing than much of other peoples' money. Mark, I doubt you read hacker news, but if you do: it's alright, dude. You bastard.

dnautics 13y ago
Still, anyone who didn't think that bitcoin is incredibly risky (with a high upside) was living under a rock, There are best practicies when dealing with a risky asset such as BTC, and they're really not that hard. Speaking of which, I should probably get around to implementing those best practices myself =D
- deleted 13y ago
  [deleted]
- naiyt 13y ago
  Yeah...the only money I've personally put into any cryptocurrency has always been with the understanding that it may either be worth nothing tomorrow or could be lost in an instant. (But I also don't store my coins in an exchange, so that helps.)
  - dnautics 13y ago
    I just set up a complex series of recurring draws to btc to reconcile being paid weekly with paying bills monthly. This could either be really awesome or really catastrophic!
bdc 13y ago
No, at some point between $0 and $400,000,000[1], negligence is no longer an acceptable excuse. [1] The current market value of the claimed 700k BTC loss in USD.
- nradov 13y ago
  Oh please. Saying that bitcoins are worth $400MM is like saying that a collection of "limited edition" Beanie Babies is worth $400MM.
  - deleted 13y ago
    [deleted]
  - streetnigga 13y ago
    So very true if you have to peg that 400mm to a specific exchange rate for another currency. You can ascertain the value of 1 BTC in your favored currency rather easily given a choice of marketplaces. Less so with 100, or 10000+. Most market-places couldn't handle the volume without a substantial shift in price before your 400mm mark was hit for say, USD. That said BTC seems to want to reach the type of ubiquity that allowed USD to be a universal currency of sorts during it's heyday. With means to convert in and out being varied from the strictly regulated to the strictly unregulated. Now let's see how long the blockchain can live.
  - efuquen 13y ago
    Well, considering the price has been pretty stably above the current point (not stable in general but definitely above this point for months), I think it's safe to say if you had that Bitcoin you lost a potential opportunity to have made a lot more money. The worth is simply what people have been willing to buy at, and that price has recently been quite high.
    - number_six 13y ago
      I think it is safe to say people lost "a potential opportunity to have made a lot more money?" in 1000s of cases. Things are only ever worth what people are willing to pay for them. Just because that price has been high recently doesn't mean it's stable. Someone paid $4,500 for a Beanie Baby once.
angersock 13y ago
It's not that big a deal...it's just internet funbucks anyways, right? :D
- deleted 13y ago
  [deleted]
  - dnautics 13y ago
    probably for the better. Everyone wins!
citricsquid 13y ago
A couple of years ago a server management application called HyperVM had a 0day due to some questionable programming, hundreds of thousands of websites were lost along with a lot of money... the next day the creator took his own life. A lot of people are going to be in a very bad position right now (both customers and people inside mtgox), let's hope it doesn't come to that.
- kyrra 13y ago
  According to this[0] the HyperVM guy may have had a family history of suicide. [0] http://www.itwire.com/business-it-news/security/25559-hypervm-boss-hangs-himself-after-exploit-damages-100000-websites http://www.itwire.com/business-it-news/security/25559-hyperv...
  - blazespin 13y ago
    oh, well, that's alright then.
  - napoleond 13y ago
    I'm having trouble understanding what you think the relevance of that might be. Obviously, when someone commits suicide, that decision ultimately rests on their shoulders and is borne of their experience/history/state/what-have-you. GP was trying to make a broader point about the difference in levels of significance between a catastrophic business fuck-up and the wasting of human life, a conflation that people without family histories of suicide make all the time.
    - kyrra 13y ago
      On the general point my original parent was trying to make, I totally agree. People throwing away their lives over a business fuck-up is a waste. I just wanted to search on the story and saw that point was made in the article I linked, and thought it was an interesting point to that specific case.
  - pekru 13y ago
    > HyperVM guy may have had a family history of suicide. Seems so. http://www.theregister.co.uk/2009/06/09/lxlabs_funder_death/ http://www.theregister.co.uk/2009/06/09/lxlabs_funder_death/ But more than that, in his own words, he was a "man of excesses." Here is his archived blog (http://echoreply.us/ligesh.com/ligesh.com/about/index.html http://echoreply.us/ligesh.com/ligesh.com/about/index.html)
haberman 13y ago
Yes, if I have any schadenfreude here it's not for him. It's for all of the people who smugly told us for years that Bitcoin is superior to our "legacy" fiat managed and regulated monetary system system in every way, and anyone who can't see that is an idiot.
- panarky 13y ago
  Don't equate Bitcoin the protocol with dodgy websites. Unlike cash, radical transparency is entirely possible with Bitcoin. Bitcoin the protocol is as strong as ever, but customers of other sites should demand proof that their exchanges and online wallets actually control 100% of the BTC they claim to have in their custody.
  - haberman 13y ago
    Yes, I think my schadenfreude is for you.
    - panarky 13y ago
      Were you that guy in 1989? "My schadenfreude is for all of the people who smugly told us for years that ARPANET is superior to our 'legacy' post office and ham radio in every way"
      - ceol 13y ago
        That would be a good analogy if we couldn't transfer money online. But, you know, we can. The whole point of Bitcoin that's been touted in pretty much every thread, hoisted up by Libertarians like a giant flag, is that it's unregulated. And now, they're all discovering why we regulated in the first place.
        foxhill 13y ago
        yes, and regulated banks/exchanges have never been the centre of financial disasters.
aegiso 13y ago
If the rumors are true and Gox is tanking, I don't think Karpeles can ever adequately feel the aggregate pain that his incompetence in his role has caused MtGox customers. He deserves much worse than nasty internet comments. There are plenty of entrepreneurs on HN alone who given the resources Gox had could manage to not (unknowingly) lose half a billion dollars due to broken programming in the timespan that Gox did. And I say this as someone with no dog in the fight.
- peterwoo 13y ago
  ... they didn't lose half a billion dollars.
- carbocation 13y ago
  That's too outcome oriented. Probably a less useful train of thought than focusing on the motivations, victories, and failures along the way to the outcome.
- pikachu_is_cool 13y ago
  Karpeles is as much at fault as his customers. I remember back in March 2013 there was some serious DDoSing happening to Mt. Gox (which they couldn't handle). I decided right then and there to take all of my funds out because I knew that if they were not competent enough to successfully stop a DDoS with the resources they had, then they clearly would fuck up at a later time. And the time has come. Seriously... all of you people are acting like Bitcoin is the world reserve currency or something. This thing didn't even exist 4 years ago. If you're gonna invest in something like Bitcoin, then you better know your shit; cause shit happens.
- smellelderberry 13y ago
  > He deserves much worse than nasty internet comments. Yeah, thanks for fanning the flames of a vigilante lynching in the making.
  - Nursie 13y ago
    Why would you assume violence? If he has covered up massive losses like this for a while but still taken deposits then he may be criminally liable.
jamesaguilar 13y ago
On some level, if you lose many life savings worth of wealth through what I can only assume was gross negligence and incompetence, you should expect the hatred. It's not like you can lose hundreds of millions of dollars -- or even tens, for the pedants who want us to take the integral of the value through the buy side of the order book -- through an honest mistake. He deserves the infamy he's getting.
- pbiggar 13y ago
  The point is that these people are people - have some compassion. I failed in my last startup, fairly publicly, and got a fair amount of internet hatred, and suffice to say I was not a happy bunny. But I didnt fail with remotely the publicity this got - I can't even imagine what the mtgox people must be feeling.
  - jamesaguilar 13y ago
    If you misled people into thinking you were solvent and kept taking their money when you knew you wouldn't be able to pay it back, or if you took grossly unacceptable risks with that same money, I'm glad you were unhappy. I doubt that's what you actually did though, and you are reacting to this story out of a kind, admirable, but entirely misplaced sense of compassion for someone whose wrongs are entirely unlike your own.
  - gnaritas 13y ago
    People who commit fraud deserve no compassion. Failing and stealing are vastly different things. Gox didn't just fail, they tried to hide it and have done nothing to deserve a single lick of compassion.
- erichurkman 13y ago
  I dearly hope no one invested their life savings into Bitcoin. That said, I'm sure many did, as they tend to do into any investment that has potentially huge upswings.
  - A_COMPUTER 13y ago
panarky 13y ago
There is no fucking way 700,000 BTC disappears with nobody noticing. This must have been building for a long time. Was there never any attempt to compare BTC in wallets to customer balances? Or did MtGox know about this problem, and hope to cover it up over time? Either case is at least gross negligence if not criminal fraud. Yes, we all fuck up at some point. But I don't pretend to be a surgeon and perforate a patient's aorta. Pretending to be competent to gain people's trust is fraud. I sympathize with those who lost money in this clusterfuck. No sympathy for Karpeles.
- sheetjs 13y ago
  > There is no fucking way 700,000 BTC disappears with nobody noticing. The history of Barings Bank is interesting, primarily because the main trader Nick Leeson was in the position to mask hundreds of millions of pounds of losses. In that case, no one noticed the roughly $1.3B loss because he was in a position where the internal controls didn't apply
  - panarky 13y ago
    At Barings, Leeson was trading futures contracts and he was also responsible for accounting for his own positions. There was no segregation of duties, no mark-to-market. At MtGox, it should be much simpler to (1) add up all customer balances, (2) add up all BTC in hot and cold wallets, and (3) compare those two numbers. If the numbers differ by more than timing differences, shut it down, debug it, and prevent a small problem from becoming a big problem. The Barings backstory is that the billion-dollar loss started with a 20k bad trade, Leeson tried to cover it up, and it snowballed. It wouldn't be surprising to learn that MtGox followed a similar trajectory.
    - FireBeyond 13y ago
      Which is just another aspect of the travesty - that someone responsible for routinely trading tens of millions of dollars per transaction should feel the need to cover up a $20,000 loss.
kevinthew 13y ago
This is whitewashing because this isn't the same thing as a company failing. They (likely) stole millions of dollars (equivalent) from a huge base of customers. That's not the same thing as losing money for your investors, which is effectively what happens when a business actually fails.
345723 13y ago
Today it's transaction malleability. Tomorrow it's something else. Bitcoin is an experiment. Those seeking to turn it into a ponzi scheme are pretending as if it's a reliable currency or investment. Their is no accountability in the Bitcoin ecosystem. If you transfer your coins anywhere you should consider them gone. The only "safe" coin is a cold storage coin. The second it goes hot it's at risk. The second you send it somewhere it's at risk. Whether it's Silk Road or MtGox or whatever comes next, this will happen over and over again. People will spend their time either trying to exploit someone else's system or creating the illusion of trust in a system which they plan to exploit. The next MtGox is already out there. This happens with dollars all the time too. But we hold people accountable. We have a number of ways to reverse transactions. We have insurance.
- mcantelon 13y ago
  Fiat currency can disappear as well. You can't get blood from a stone. http://www.reuters.com/article/2014/02/11/us-mfglobal-corzine-idUSBREA1A1QS20140211 http://www.reuters.com/article/2014/02/11/us-mfglobal-corzin...
- baddox 13y ago
  > This happens with dollars all the time too. But we hold people accountable. You mean like the bank bailouts, and all the money that "went missing" from that?
  - pmorici 13y ago
    My thought exactly, why don't we call up Jon Corzine and ask him what kind of accountability he was held to after losing all MF Global's customers money.
  - ceol 13y ago
    You mean like how we made a profit from them?[0] [0]: http://projects.propublica.org/bailout/list http://projects.propublica.org/bailout/list
    - baddox 13y ago
ubersync 13y ago
You are ignoring the fact that he has been straight up lying the last few weeks, and in my opinion, he still is. He said that they were aware of the bug for quiet some time, and yet had enabled automatic re-issuing of failed withdrawals. Do you think that is what really happened? They just got an excuse to steal coins on a massive scale!
deleted 13y ago
[deleted]
Aqueous 13y ago
I sympathize with him and sincerely hope that he comes through this and he finds some redemption. This was a combination of criminal theft and not merely neglect. We must remember that the loss of these BitCoins themselves (quite possibly) wasn't malicious, while the theft of these coins is most certainly malicious. If you leave your house door open is it morally or legally right for someone to take the opportunity to raid your house and rob it blind? In such a situation both parties are at fault, one for neglect but the other for immoral (and illegal) home invasion and thievery. But since in this case Mark Karpeles is the only visible figure in this saga, and the thieves will almost certainly never be known, the majority of the vitriol is going to be directed at him. I've criticized him too, and I think this amounts to criminal neglect, but I think that there is a way forward for both Karpeles and BitCoin. I think we (myself included) should tone down our vitriol.
gst 13y ago
People aren't hating Mark Karpeles because he messed up, but because of the completely absurd response to this situation. Optimal response: A message to the customers as soon as the issue is noticed: "Due to a technical problem we lost X amount of Bitcoins, which means we currently can't cover all of the deposits. Trading has been disabled while this issue is investigated. [Some external financial company] is in charge of coordinating withdrawals of existing customer funds." Actual response: Blaming the issue on the Bitcoin protocol. Trading stays active althought the price tanks. Customers can still deposit funds although it's clear that they won't be able to withdraw it. Released announcements try to hide information about insolvency and try to give hope to the customers. I didn't have any deposits at MtGox. As a customer I would probably have forgiven them losing the funds (if it was a technical issue), but I wouldn't have forgiven them they way how they handle public communication. Such a behavior is not acceptable.
- ProAm 13y ago
  > People aren't hating Mark Karpeles because he messed up I think they are hating Mark for losing their money, clearly a 'mess up'.
  - MildlySerious 13y ago
    He's being ignorant about it and tries to blame others for the mess MtGox caused. On a speculative note, he'll propably walk out of this with millions in his pockets, while his customers lost tons of cash due to this mess.
    - smoyer 13y ago
      I don't know much about Japanese law, but in the US, there are times when it's deemed necessary to "pierce the corporate veil". If he's got assets, I suspect people will go after them ... though it might take him 3 years to notice his personal accounts are empty. The other possibility is that he's incompetent in his personal life too ... maybe his paychecks have all been spent? (I hear gaming cards are collectible!)
znowi 13y ago
MtGox has been lying and scheming all the way, showing complete lack of respect for either their users or Bitcoin community at large. They should have been gone and prosecuted a long ago. I have no sympathy for Mark Karpeles. He's a shady character and I'm glad to see his shady "startup" finally crumble.
_pmf_ 13y ago
> Remember that we have ALL fucked up at some point, just luckily for most of us, "fucking up" doesn't mean losing than much of other peoples' money. Most of us also don't get filthy rich losing other peoples' money.
coldtea 13y ago
>It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. Fraudsters are real human beings too. As are people who are incometent but go ahead and build stuff risking other people's money and providing false assurances.
joering2 13y ago
I respect your position on HN but I cannot disagree more with you on this one. You sound like you just finished watching "thank you for smoking". The point that "he is a humanbeing" sounds like "what difference does it make" or other distraction that we are supposed to buy in order to feel less angry for his choices. Yes we are all human beings and im not sure how that helps in this instance. Maybe he should have thought of clients coins where platform continued to deliver slappy code and as a result, crashed? I took all my coins out long time ago after seeing multiple red flag. But nothing pisses me more than this perfect situation. Any gov burocreat from a three letter agency is happily partying right now because there were waiting for something like this to happen. Mtgox will go down in the history, i dont care. Hope those sloppy pogrammers wont find their way into rocket engineering, traffic systems programming, airplains software programming or similar. But sure the gov will make a perfect example out of it and that gives them ammunition to try to regulate the market again. You say "we all fucked up at some point". And you right. Just like one could assume most of us dui at some point. I did. Once. I drove very carefully, nothing happened and i hated myself for it for many weeks afterward as of how stupid i was. But still, i wont have much respect for someone else who drink and drive continuously and one day crashes and kills someone.
downandout 13y ago
It doesn't matter how much hate we pile on. Prosecutors will pile enough hatred on Mark et al for us all. The fact that they just shut down and have vanished with hundreds of millions of dollars worth of assets that don't belong to them is going to bring the legal equivalent of hellfire and brimstone down on the heads of everyone involved. They could have handled this far better, and maybe avoided some of the major problems they are now headed for. Now, unless Mt Gox suddenly reappears with an explanation, they are in for a very rough ride.
madaxe_again 13y ago
Guys, let's not be angry with the bankers, they're only human. Now, somebody give this man a presidency. That's jwst you get for fraud on this scale.
smoyer 13y ago
That's pretty "touchy-feely". You can claim people should be nice, but most start-ups that fail spend investor's money and those investors KNOW their money is at risk. Nobody expects that their money is at risk when you put it into a savings account. Crypto-currency exchanges and wallets should be the same way ... perhaps it's not as safe as putting it under your mattress but close. So in the business world, you have a responsibility to your customers and most sane companies carry E&O insurance to cover the unforeseen mistakes that they might make. It doesn't cover incompetence or negligence in many cases, and I'd classify what happened with Gox as criminal negligence. Karpeles might in fact be sad, but I guess I just respectfully called him a criminal. Those with more "skin-in-the-game" are going to want to extract as much of their money as possible from him ... I'm afraid he's going to get sadder.
jackgavigan 13y ago
I have zero sympathy for Karpeles or anyone else who screws up like this. The reason this sort of thing happens is either because (a) the perpetrators deliberately set out to defraud their customers or (b) they got overconfident and sold a product/service that they simply weren't capable of delivering. Operating a financial exchange is a serious business. In purporting to do so, you're taking people's money and promising them that you will operate the exchange honestly and competently. From what I've observed and from the private conversations I've had with people who've had first-hand dealings with them, many of the current batch of hot Bitcoin startups are run by people who don't have a fucking clue but have managed to delude themselves that they can build the Next Big Thing in financial technology by faking it 'til they make it. It's like a bunch of kids acting at being grown-ups - maybe one or two might actually blunder their way to success but the vast majority are going to crash and burn due to stupid, idiotic mistakes that could have been avoided had they been willing to listen to advice from people with more knowledge and experience. Of course, the downside of actually doing things properly is that they don't get the growth/traction that attracts investors' attention. The corrollary is that the startups who do achieve the sort of growth curves that attract investors probably aren't doing things properly, whether by cutting corners, failing to balance the books properly, not focusing enough on security or the 101 other things that can lead to an implosion/collapse/insolvency. While the founders at least have the excuse of being young and foolish, I question the morals of investors who fund teams that clearly lack the appropriate skills/experience to provide proper financial products and services. It's the same type of one-way bet that contributed to the 2008 financial crisis. If the startup is successful, the founders and investors exit for millions/billions. If it fails, the founders and investors get to walk away unscathed while the customers end up suffering the losses of the founders' incompetence and the investors' failure to properly supervise their investment. I fully expect a Silicon Valley-based Bitcoin startup to implode at some point and I would not be at all surprised if the resulting clamour from customers who've lost money is loud enough that the authorities step in to begin regulating the space.
- celticninja 13y ago
  This is just life and death of a business and it is interesting to watch how these exchanges are being removed from the economy, by essentially a Darwinian survival of the fittest rule, the least secure get hacked and taken off line. We lost bitcoin-central, bitcoinica, mtgox on the way but BTC-E is going strong and so is Bitstamp, kraken are doing a good job and so are btcchina. The market does not need regulation. Gmaxwell has suggested exchanges provide an anonymised form of financial data to confirm their liquidity and I know BTC-E have suggested they will do something like that. Of course people may suffer losses along the way and that sucks but you can buy and store them locally and this sort of thing will never affect you.
sentenza 13y ago
What I wonder is this: Were any bitcoins actually lost during the meltdown? I mean in the sense that nobody can get at them any more. The blockchain should, sooner or later, allow the tracing of some of the coins, right? So if somebody still has access to them, there might be a chance to find out who? Or am I misunderstanding something here?
- pistle 13y ago
  No man. The blockchain man, the blockchain. It's out there. We got this. The question could be that once they find out the who or who's, and those people are riding pitchfork style, around Bittown, who's going to be in charge of liqudating assets and sending pennies on the dollar back to all those quasi-anonymous folks saying the fiat is theirs? Oh, and what about when we find out that suspect 1 might not actually be the culprit? Oops. YOLO. Is there not an interesting question in, assuming coins could be recovered, what laws, in what countries, will cover them, and what value would they have if the 'currency' has no value? Do people want their BC back? Looks like a bunch of people are praying to get out of bitcoin at 550 right now. If that aspiration thinking fails and people eat through the standing buys around 400, the next stop is 400, where panic will kick in and, maybe there's a pause at 100. Pins, needles, popcorn... Black Tuesday 2014?
  - pistle 13y ago
    I should totally invest all my savings into speculative stocks. A first wave of gried ate through 550 and accelerated into 500 which ran to 400, where a wall of buying kicked in. That triggered a run-up. Not enough selling to breach the support point there. Fare thee well bitcoiners. Fare thee well.
deleted 13y ago
[deleted]

by blhack 13y ago

dnautics 13y ago

Still, anyone who didn't think that bitcoin is incredibly risky (with a high upside) was living under a rock, There are best practicies when dealing with a risky asset such as BTC, and they're really not that hard. Speaking of which, I should probably get around to implementing those best practices myself =D

deleted 13y ago
[deleted]
naiyt 13y ago
Yeah...the only money I've personally put into any cryptocurrency has always been with the understanding that it may either be worth nothing tomorrow or could be lost in an instant. (But I also don't store my coins in an exchange, so that helps.)
- dnautics 13y ago
  I just set up a complex series of recurring draws to btc to reconcile being paid weekly with paying bills monthly. This could either be really awesome or really catastrophic!

bdc 13y ago

No, at some point between $0 and $400,000,000[1], negligence is no longer an acceptable excuse. [1] The current market value of the claimed 700k BTC loss in USD.

nradov 13y ago
Oh please. Saying that bitcoins are worth $400MM is like saying that a collection of "limited edition" Beanie Babies is worth $400MM.
- deleted 13y ago
  [deleted]
- streetnigga 13y ago
  So very true if you have to peg that 400mm to a specific exchange rate for another currency. You can ascertain the value of 1 BTC in your favored currency rather easily given a choice of marketplaces. Less so with 100, or 10000+. Most market-places couldn't handle the volume without a substantial shift in price before your 400mm mark was hit for say, USD. That said BTC seems to want to reach the type of ubiquity that allowed USD to be a universal currency of sorts during it's heyday. With means to convert in and out being varied from the strictly regulated to the strictly unregulated. Now let's see how long the blockchain can live.
- efuquen 13y ago
  Well, considering the price has been pretty stably above the current point (not stable in general but definitely above this point for months), I think it's safe to say if you had that Bitcoin you lost a potential opportunity to have made a lot more money. The worth is simply what people have been willing to buy at, and that price has recently been quite high.
  - number_six 13y ago
    I think it is safe to say people lost "a potential opportunity to have made a lot more money?" in 1000s of cases. Things are only ever worth what people are willing to pay for them. Just because that price has been high recently doesn't mean it's stable. Someone paid $4,500 for a Beanie Baby once.

angersock 13y ago

It's not that big a deal...it's just internet funbucks anyways, right? :D

deleted 13y ago
[deleted]
- dnautics 13y ago
  probably for the better. Everyone wins!

citricsquid 13y ago

A couple of years ago a server management application called HyperVM had a 0day due to some questionable programming, hundreds of thousands of websites were lost along with a lot of money... the next day the creator took his own life. A lot of people are going to be in a very bad position right now (both customers and people inside mtgox), let's hope it doesn't come to that.

kyrra 13y ago
According to this[0] the HyperVM guy may have had a family history of suicide. [0] http://www.itwire.com/business-it-news/security/25559-hypervm-boss-hangs-himself-after-exploit-damages-100000-websites http://www.itwire.com/business-it-news/security/25559-hyperv...
- blazespin 13y ago
  oh, well, that's alright then.
- napoleond 13y ago
  I'm having trouble understanding what you think the relevance of that might be. Obviously, when someone commits suicide, that decision ultimately rests on their shoulders and is borne of their experience/history/state/what-have-you. GP was trying to make a broader point about the difference in levels of significance between a catastrophic business fuck-up and the wasting of human life, a conflation that people without family histories of suicide make all the time.
  - kyrra 13y ago
    On the general point my original parent was trying to make, I totally agree. People throwing away their lives over a business fuck-up is a waste. I just wanted to search on the story and saw that point was made in the article I linked, and thought it was an interesting point to that specific case.
- pekru 13y ago
  > HyperVM guy may have had a family history of suicide. Seems so. http://www.theregister.co.uk/2009/06/09/lxlabs_funder_death/ http://www.theregister.co.uk/2009/06/09/lxlabs_funder_death/ But more than that, in his own words, he was a "man of excesses." Here is his archived blog (http://echoreply.us/ligesh.com/ligesh.com/about/index.html http://echoreply.us/ligesh.com/ligesh.com/about/index.html)

haberman 13y ago

Yes, if I have any schadenfreude here it's not for him. It's for all of the people who smugly told us for years that Bitcoin is superior to our "legacy" fiat managed and regulated monetary system system in every way, and anyone who can't see that is an idiot.

panarky 13y ago
Don't equate Bitcoin the protocol with dodgy websites. Unlike cash, radical transparency is entirely possible with Bitcoin. Bitcoin the protocol is as strong as ever, but customers of other sites should demand proof that their exchanges and online wallets actually control 100% of the BTC they claim to have in their custody.
- haberman 13y ago
  Yes, I think my schadenfreude is for you.
  - panarky 13y ago
    Were you that guy in 1989? "My schadenfreude is for all of the people who smugly told us for years that ARPANET is superior to our 'legacy' post office and ham radio in every way"
    - ceol 13y ago
      That would be a good analogy if we couldn't transfer money online. But, you know, we can. The whole point of Bitcoin that's been touted in pretty much every thread, hoisted up by Libertarians like a giant flag, is that it's unregulated. And now, they're all discovering why we regulated in the first place.
      - foxhill 13y ago
        yes, and regulated banks/exchanges have never been the centre of financial disasters.

aegiso 13y ago

If the rumors are true and Gox is tanking, I don't think Karpeles can ever adequately feel the aggregate pain that his incompetence in his role has caused MtGox customers. He deserves much worse than nasty internet comments. There are plenty of entrepreneurs on HN alone who given the resources Gox had could manage to not (unknowingly) lose half a billion dollars due to broken programming in the timespan that Gox did. And I say this as someone with no dog in the fight.

peterwoo 13y ago
... they didn't lose half a billion dollars.
carbocation 13y ago
That's too outcome oriented. Probably a less useful train of thought than focusing on the motivations, victories, and failures along the way to the outcome.
pikachu_is_cool 13y ago
Karpeles is as much at fault as his customers. I remember back in March 2013 there was some serious DDoSing happening to Mt. Gox (which they couldn't handle). I decided right then and there to take all of my funds out because I knew that if they were not competent enough to successfully stop a DDoS with the resources they had, then they clearly would fuck up at a later time. And the time has come. Seriously... all of you people are acting like Bitcoin is the world reserve currency or something. This thing didn't even exist 4 years ago. If you're gonna invest in something like Bitcoin, then you better know your shit; cause shit happens.
smellelderberry 13y ago
> He deserves much worse than nasty internet comments. Yeah, thanks for fanning the flames of a vigilante lynching in the making.
- Nursie 13y ago
  Why would you assume violence? If he has covered up massive losses like this for a while but still taken deposits then he may be criminally liable.

jamesaguilar 13y ago

On some level, if you lose many life savings worth of wealth through what I can only assume was gross negligence and incompetence, you should expect the hatred. It's not like you can lose hundreds of millions of dollars -- or even tens, for the pedants who want us to take the integral of the value through the buy side of the order book -- through an honest mistake. He deserves the infamy he's getting.

pbiggar 13y ago
The point is that these people are people - have some compassion. I failed in my last startup, fairly publicly, and got a fair amount of internet hatred, and suffice to say I was not a happy bunny. But I didnt fail with remotely the publicity this got - I can't even imagine what the mtgox people must be feeling.
- jamesaguilar 13y ago
  If you misled people into thinking you were solvent and kept taking their money when you knew you wouldn't be able to pay it back, or if you took grossly unacceptable risks with that same money, I'm glad you were unhappy. I doubt that's what you actually did though, and you are reacting to this story out of a kind, admirable, but entirely misplaced sense of compassion for someone whose wrongs are entirely unlike your own.
- gnaritas 13y ago
  People who commit fraud deserve no compassion. Failing and stealing are vastly different things. Gox didn't just fail, they tried to hide it and have done nothing to deserve a single lick of compassion.
erichurkman 13y ago
I dearly hope no one invested their life savings into Bitcoin. That said, I'm sure many did, as they tend to do into any investment that has potentially huge upswings.
- A_COMPUTER 13y ago

panarky 13y ago

There is no fucking way 700,000 BTC disappears with nobody noticing. This must have been building for a long time. Was there never any attempt to compare BTC in wallets to customer balances? Or did MtGox know about this problem, and hope to cover it up over time? Either case is at least gross negligence if not criminal fraud. Yes, we all fuck up at some point. But I don't pretend to be a surgeon and perforate a patient's aorta. Pretending to be competent to gain people's trust is fraud. I sympathize with those who lost money in this clusterfuck. No sympathy for Karpeles.

sheetjs 13y ago
> There is no fucking way 700,000 BTC disappears with nobody noticing. The history of Barings Bank is interesting, primarily because the main trader Nick Leeson was in the position to mask hundreds of millions of pounds of losses. In that case, no one noticed the roughly $1.3B loss because he was in a position where the internal controls didn't apply
- panarky 13y ago
  At Barings, Leeson was trading futures contracts and he was also responsible for accounting for his own positions. There was no segregation of duties, no mark-to-market. At MtGox, it should be much simpler to (1) add up all customer balances, (2) add up all BTC in hot and cold wallets, and (3) compare those two numbers. If the numbers differ by more than timing differences, shut it down, debug it, and prevent a small problem from becoming a big problem. The Barings backstory is that the billion-dollar loss started with a 20k bad trade, Leeson tried to cover it up, and it snowballed. It wouldn't be surprising to learn that MtGox followed a similar trajectory.
  - FireBeyond 13y ago
    Which is just another aspect of the travesty - that someone responsible for routinely trading tens of millions of dollars per transaction should feel the need to cover up a $20,000 loss.

kevinthew 13y ago

This is whitewashing because this isn't the same thing as a company failing. They (likely) stole millions of dollars (equivalent) from a huge base of customers. That's not the same thing as losing money for your investors, which is effectively what happens when a business actually fails.

345723 13y ago

Today it's transaction malleability. Tomorrow it's something else. Bitcoin is an experiment. Those seeking to turn it into a ponzi scheme are pretending as if it's a reliable currency or investment. Their is no accountability in the Bitcoin ecosystem. If you transfer your coins anywhere you should consider them gone. The only "safe" coin is a cold storage coin. The second it goes hot it's at risk. The second you send it somewhere it's at risk. Whether it's Silk Road or MtGox or whatever comes next, this will happen over and over again. People will spend their time either trying to exploit someone else's system or creating the illusion of trust in a system which they plan to exploit. The next MtGox is already out there. This happens with dollars all the time too. But we hold people accountable. We have a number of ways to reverse transactions. We have insurance.

mcantelon 13y ago
Fiat currency can disappear as well. You can't get blood from a stone. http://www.reuters.com/article/2014/02/11/us-mfglobal-corzine-idUSBREA1A1QS20140211 http://www.reuters.com/article/2014/02/11/us-mfglobal-corzin...
baddox 13y ago
> This happens with dollars all the time too. But we hold people accountable. You mean like the bank bailouts, and all the money that "went missing" from that?
- pmorici 13y ago
  My thought exactly, why don't we call up Jon Corzine and ask him what kind of accountability he was held to after losing all MF Global's customers money.
- ceol 13y ago
  You mean like how we made a profit from them?[0] [0]: http://projects.propublica.org/bailout/list http://projects.propublica.org/bailout/list
  - baddox 13y ago

ubersync 13y ago

You are ignoring the fact that he has been straight up lying the last few weeks, and in my opinion, he still is. He said that they were aware of the bug for quiet some time, and yet had enabled automatic re-issuing of failed withdrawals. Do you think that is what really happened? They just got an excuse to steal coins on a massive scale!

deleted 13y ago

[deleted]

Aqueous 13y ago

I sympathize with him and sincerely hope that he comes through this and he finds some redemption. This was a combination of criminal theft and not merely neglect. We must remember that the loss of these BitCoins themselves (quite possibly) wasn't malicious, while the theft of these coins is most certainly malicious. If you leave your house door open is it morally or legally right for someone to take the opportunity to raid your house and rob it blind? In such a situation both parties are at fault, one for neglect but the other for immoral (and illegal) home invasion and thievery. But since in this case Mark Karpeles is the only visible figure in this saga, and the thieves will almost certainly never be known, the majority of the vitriol is going to be directed at him. I've criticized him too, and I think this amounts to criminal neglect, but I think that there is a way forward for both Karpeles and BitCoin. I think we (myself included) should tone down our vitriol.

gst 13y ago

People aren't hating Mark Karpeles because he messed up, but because of the completely absurd response to this situation. Optimal response: A message to the customers as soon as the issue is noticed: "Due to a technical problem we lost X amount of Bitcoins, which means we currently can't cover all of the deposits. Trading has been disabled while this issue is investigated. [Some external financial company] is in charge of coordinating withdrawals of existing customer funds." Actual response: Blaming the issue on the Bitcoin protocol. Trading stays active althought the price tanks. Customers can still deposit funds although it's clear that they won't be able to withdraw it. Released announcements try to hide information about insolvency and try to give hope to the customers. I didn't have any deposits at MtGox. As a customer I would probably have forgiven them losing the funds (if it was a technical issue), but I wouldn't have forgiven them they way how they handle public communication. Such a behavior is not acceptable.

ProAm 13y ago
> People aren't hating Mark Karpeles because he messed up I think they are hating Mark for losing their money, clearly a 'mess up'.
- MildlySerious 13y ago
  He's being ignorant about it and tries to blame others for the mess MtGox caused. On a speculative note, he'll propably walk out of this with millions in his pockets, while his customers lost tons of cash due to this mess.
  - smoyer 13y ago
    I don't know much about Japanese law, but in the US, there are times when it's deemed necessary to "pierce the corporate veil". If he's got assets, I suspect people will go after them ... though it might take him 3 years to notice his personal accounts are empty. The other possibility is that he's incompetent in his personal life too ... maybe his paychecks have all been spent? (I hear gaming cards are collectible!)

znowi 13y ago

MtGox has been lying and scheming all the way, showing complete lack of respect for either their users or Bitcoin community at large. They should have been gone and prosecuted a long ago. I have no sympathy for Mark Karpeles. He's a shady character and I'm glad to see his shady "startup" finally crumble.

_pmf_ 13y ago

> Remember that we have ALL fucked up at some point, just luckily for most of us, "fucking up" doesn't mean losing than much of other peoples' money. Most of us also don't get filthy rich losing other peoples' money.

coldtea 13y ago

>It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. Fraudsters are real human beings too. As are people who are incometent but go ahead and build stuff risking other people's money and providing false assurances.

joering2 13y ago

I respect your position on HN but I cannot disagree more with you on this one. You sound like you just finished watching "thank you for smoking". The point that "he is a humanbeing" sounds like "what difference does it make" or other distraction that we are supposed to buy in order to feel less angry for his choices. Yes we are all human beings and im not sure how that helps in this instance. Maybe he should have thought of clients coins where platform continued to deliver slappy code and as a result, crashed? I took all my coins out long time ago after seeing multiple red flag. But nothing pisses me more than this perfect situation. Any gov burocreat from a three letter agency is happily partying right now because there were waiting for something like this to happen. Mtgox will go down in the history, i dont care. Hope those sloppy pogrammers wont find their way into rocket engineering, traffic systems programming, airplains software programming or similar. But sure the gov will make a perfect example out of it and that gives them ammunition to try to regulate the market again. You say "we all fucked up at some point". And you right. Just like one could assume most of us dui at some point. I did. Once. I drove very carefully, nothing happened and i hated myself for it for many weeks afterward as of how stupid i was. But still, i wont have much respect for someone else who drink and drive continuously and one day crashes and kills someone.

downandout 13y ago

It doesn't matter how much hate we pile on. Prosecutors will pile enough hatred on Mark et al for us all. The fact that they just shut down and have vanished with hundreds of millions of dollars worth of assets that don't belong to them is going to bring the legal equivalent of hellfire and brimstone down on the heads of everyone involved. They could have handled this far better, and maybe avoided some of the major problems they are now headed for. Now, unless Mt Gox suddenly reappears with an explanation, they are in for a very rough ride.

madaxe_again 13y ago

Guys, let's not be angry with the bankers, they're only human. Now, somebody give this man a presidency. That's jwst you get for fraud on this scale.

smoyer 13y ago

That's pretty "touchy-feely". You can claim people should be nice, but most start-ups that fail spend investor's money and those investors KNOW their money is at risk. Nobody expects that their money is at risk when you put it into a savings account. Crypto-currency exchanges and wallets should be the same way ... perhaps it's not as safe as putting it under your mattress but close. So in the business world, you have a responsibility to your customers and most sane companies carry E&O insurance to cover the unforeseen mistakes that they might make. It doesn't cover incompetence or negligence in many cases, and I'd classify what happened with Gox as criminal negligence. Karpeles might in fact be sad, but I guess I just respectfully called him a criminal. Those with more "skin-in-the-game" are going to want to extract as much of their money as possible from him ... I'm afraid he's going to get sadder.

jackgavigan 13y ago

I have zero sympathy for Karpeles or anyone else who screws up like this. The reason this sort of thing happens is either because (a) the perpetrators deliberately set out to defraud their customers or (b) they got overconfident and sold a product/service that they simply weren't capable of delivering. Operating a financial exchange is a serious business. In purporting to do so, you're taking people's money and promising them that you will operate the exchange honestly and competently. From what I've observed and from the private conversations I've had with people who've had first-hand dealings with them, many of the current batch of hot Bitcoin startups are run by people who don't have a fucking clue but have managed to delude themselves that they can build the Next Big Thing in financial technology by faking it 'til they make it. It's like a bunch of kids acting at being grown-ups - maybe one or two might actually blunder their way to success but the vast majority are going to crash and burn due to stupid, idiotic mistakes that could have been avoided had they been willing to listen to advice from people with more knowledge and experience. Of course, the downside of actually doing things properly is that they don't get the growth/traction that attracts investors' attention. The corrollary is that the startups who do achieve the sort of growth curves that attract investors probably aren't doing things properly, whether by cutting corners, failing to balance the books properly, not focusing enough on security or the 101 other things that can lead to an implosion/collapse/insolvency. While the founders at least have the excuse of being young and foolish, I question the morals of investors who fund teams that clearly lack the appropriate skills/experience to provide proper financial products and services. It's the same type of one-way bet that contributed to the 2008 financial crisis. If the startup is successful, the founders and investors exit for millions/billions. If it fails, the founders and investors get to walk away unscathed while the customers end up suffering the losses of the founders' incompetence and the investors' failure to properly supervise their investment. I fully expect a Silicon Valley-based Bitcoin startup to implode at some point and I would not be at all surprised if the resulting clamour from customers who've lost money is loud enough that the authorities step in to begin regulating the space.

celticninja 13y ago
This is just life and death of a business and it is interesting to watch how these exchanges are being removed from the economy, by essentially a Darwinian survival of the fittest rule, the least secure get hacked and taken off line. We lost bitcoin-central, bitcoinica, mtgox on the way but BTC-E is going strong and so is Bitstamp, kraken are doing a good job and so are btcchina. The market does not need regulation. Gmaxwell has suggested exchanges provide an anonymised form of financial data to confirm their liquidity and I know BTC-E have suggested they will do something like that. Of course people may suffer losses along the way and that sucks but you can buy and store them locally and this sort of thing will never affect you.

sentenza 13y ago

What I wonder is this: Were any bitcoins actually lost during the meltdown? I mean in the sense that nobody can get at them any more. The blockchain should, sooner or later, allow the tracing of some of the coins, right? So if somebody still has access to them, there might be a chance to find out who? Or am I misunderstanding something here?

pistle 13y ago
No man. The blockchain man, the blockchain. It's out there. We got this. The question could be that once they find out the who or who's, and those people are riding pitchfork style, around Bittown, who's going to be in charge of liqudating assets and sending pennies on the dollar back to all those quasi-anonymous folks saying the fiat is theirs? Oh, and what about when we find out that suspect 1 might not actually be the culprit? Oops. YOLO. Is there not an interesting question in, assuming coins could be recovered, what laws, in what countries, will cover them, and what value would they have if the 'currency' has no value? Do people want their BC back? Looks like a bunch of people are praying to get out of bitcoin at 550 right now. If that aspiration thinking fails and people eat through the standing buys around 400, the next stop is 400, where panic will kick in and, maybe there's a pause at 100. Pins, needles, popcorn... Black Tuesday 2014?
- pistle 13y ago
  I should totally invest all my savings into speculative stocks. A first wave of gried ate through 550 and accelerated into 500 which ran to 400, where a wall of buying kicked in. That triggered a run-up. Not enough selling to breach the support point there. Fare thee well bitcoiners. Fare thee well.

deleted 13y ago

[deleted]