4 ms·

Nah, Enron's prominence is purely political, it was useful for various narratives. There are far worse examples, and Mt. Gox sounds like it's in the running.

by hga 12y ago

Nah, Enron's prominence is purely political, it was useful for various narratives. There are far worse examples, and Mt. Gox sounds like it's in the running. E.g. there's cheating on your general ledger (which at 50,000 feet might be the sort of thing Enron did), then there's not keeping a general ledger at all, which is being posited in this discussion. Even I, who's never run a company, but did watch my parents run some while I was growing up, know how essential it is to keep a general ledger. Otherwise you have no real idea what your financial state is.

gaius 12y ago
not keeping a general ledger at all To be fair, you don't need a general ledger if you are setting up a website to trade playing cards. Say an Online eXchange for Magic the Gathering. Every time an Mt Gox story comes up, the most incredulous thing to me is, why was anyone even expecting these guys to act like a bank? Why did anyone even consider trusting them with actual money?
- s_kilk 12y ago
  Because bitcoiners were willing to believe anything which fit their narrative, logic and diligence be damned.
  - gaius 12y ago
    LOL Bitcoin fanboys have shown up on this thread I see judging by our down votes...
- hawkice 12y ago
  You'd probably still want a ledger there, if you're trading physical goods. That way you can correlate confirmed receipts on both ends of whatever cards were traded.
  - hga 12y ago
    No probably. Presumably you're doing this for a cut of the action, so that's income on one side, then there's your out of pocket costs to run the system etc. Knowing how these two compare can tell you all sorts of things, including how much you can safely take out for yourself if things are going well enough, vs. knowing you'll have to pay next month's co-lo fees out of your pocket. Now, of course, at that level something as formal as a general ledger isn't quite required, but you still need to do the same things in e.g. watching the organization's bank balance.
    - hawkice 12y ago
      I am admittedly a bit of an accounting fanboy, and may jump to more rigorous tracking of things I control or are accountable for than is needed. For instance, upon discovering a large portion of the intelligence funding in the United States is "off-budget", I was concerned about their financial rigor (your budget should include all the things you spend money on -- it's odd to think the US Government is quite a few steps and security clearances away from being able to answer "How much do you spend on pens a year?")
- dragonwriter 12y ago
  It wasn't an online exchange for MtG cards, it was an exchange for MtG:Online cards (digital collectibles), and, IIRC, other than buying the name, the bitcoin exchange didn't have much in common with it.
- krapp 12y ago
  Mt. Gox was popular. In an environment without some sort of central accrediting authority or standards body for Bitcoin businesses (the very idea would be abhorrent), popularity confers legitimacy, and convenience confers popularity. I also suspect there were also more than a few people who trusted it implicitly because it wasn't a bank, they just assumed it worked because Bitcoin. When you begin from the premise that the models followed by the financial world are at best obsolete and at worst a criminal facade, of course you might not bother referring to them if you start a business, or care to find out if an exchange follows the best practices of an industry you consider corrupt and useless. I'm not saying this describes all bitcoin holders or Mt. Gox customers by any means, but the politics around Bitcoin do seem to lend themselves to an unwillingness to hold third parties up to any sort of standard.
quattrofan 12y ago
Bigger than Enron? Not even close: http://usatoday30.usatoday.com/money/energy/2002-01-22-enron-numbers.htm http://usatoday30.usatoday.com/money/energy/2002-01-22-enron...
- jacquesm 12y ago
  And that's just the primary, don't forget about the fall-out (Arthur Andersen implosion, for one (miraculously, they survived)).
  - hga 12y ago
    Only in a technical sense; Arthur Anderson is in a line of business where a criminal prosecution is pretty much a death sentence, a conviction absolutely so, even if later reserved. Per Wikipedia: In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an energy corporation based in Texas, which had filed for bankruptcy in 2001 and later failed. The other national accounting and consulting firms bought most of the practices of Arthur Andersen. The verdict was subsequently overturned by the Supreme Court of the United States. The damage to its reputation, however, has prevented it from returning as a viable business, though it still nominally exists.

by hga 12y ago

gaius 12y ago

not keeping a general ledger at all To be fair, you don't need a general ledger if you are setting up a website to trade playing cards. Say an Online eXchange for Magic the Gathering. Every time an Mt Gox story comes up, the most incredulous thing to me is, why was anyone even expecting these guys to act like a bank? Why did anyone even consider trusting them with actual money?

s_kilk 12y ago
Because bitcoiners were willing to believe anything which fit their narrative, logic and diligence be damned.
- gaius 12y ago
  LOL Bitcoin fanboys have shown up on this thread I see judging by our down votes...
hawkice 12y ago
You'd probably still want a ledger there, if you're trading physical goods. That way you can correlate confirmed receipts on both ends of whatever cards were traded.
- hga 12y ago
  No probably. Presumably you're doing this for a cut of the action, so that's income on one side, then there's your out of pocket costs to run the system etc. Knowing how these two compare can tell you all sorts of things, including how much you can safely take out for yourself if things are going well enough, vs. knowing you'll have to pay next month's co-lo fees out of your pocket. Now, of course, at that level something as formal as a general ledger isn't quite required, but you still need to do the same things in e.g. watching the organization's bank balance.
  - hawkice 12y ago
    I am admittedly a bit of an accounting fanboy, and may jump to more rigorous tracking of things I control or are accountable for than is needed. For instance, upon discovering a large portion of the intelligence funding in the United States is "off-budget", I was concerned about their financial rigor (your budget should include all the things you spend money on -- it's odd to think the US Government is quite a few steps and security clearances away from being able to answer "How much do you spend on pens a year?")
dragonwriter 12y ago
It wasn't an online exchange for MtG cards, it was an exchange for MtG:Online cards (digital collectibles), and, IIRC, other than buying the name, the bitcoin exchange didn't have much in common with it.
krapp 12y ago
Mt. Gox was popular. In an environment without some sort of central accrediting authority or standards body for Bitcoin businesses (the very idea would be abhorrent), popularity confers legitimacy, and convenience confers popularity. I also suspect there were also more than a few people who trusted it implicitly because it wasn't a bank, they just assumed it worked because Bitcoin. When you begin from the premise that the models followed by the financial world are at best obsolete and at worst a criminal facade, of course you might not bother referring to them if you start a business, or care to find out if an exchange follows the best practices of an industry you consider corrupt and useless. I'm not saying this describes all bitcoin holders or Mt. Gox customers by any means, but the politics around Bitcoin do seem to lend themselves to an unwillingness to hold third parties up to any sort of standard.

quattrofan 12y ago

Bigger than Enron? Not even close: http://usatoday30.usatoday.com/money/energy/2002-01-22-enron-numbers.htm http://usatoday30.usatoday.com/money/energy/2002-01-22-enron...

jacquesm 12y ago
And that's just the primary, don't forget about the fall-out (Arthur Andersen implosion, for one (miraculously, they survived)).
- hga 12y ago
  Only in a technical sense; Arthur Anderson is in a line of business where a criminal prosecution is pretty much a death sentence, a conviction absolutely so, even if later reserved. Per Wikipedia: In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an energy corporation based in Texas, which had filed for bankruptcy in 2001 and later failed. The other national accounting and consulting firms bought most of the practices of Arthur Andersen. The verdict was subsequently overturned by the Supreme Court of the United States. The damage to its reputation, however, has prevented it from returning as a viable business, though it still nominally exists.