2014 Story of the Year: Mt Gox Finally Dies

This year's biggest story in Bitcoin actually predates the founding of Qntra. Back in February Mt Gox finally closed its doors. Since Jed McCaleb opened it for Bitcoin Trading in July of 2010, through its astounding three years of incompetence and mismanagement under Mark Karpel├Ęs Mt Gox had served as a central source of drama and uncertainty in the Bitcoin space.

Wounded in 2011 and further wounded again in 2013 prominent voices in Bitcoin had been warning of Mt Gox's grave prospects and deceit for months before the last pretenses that Mt Gox could have a future as an ongoing concern were dropped. That Mt Gox could pretend all of the way to February of this year that it just might be able to continue as a business concern of some sort is a testament to the sheer size of the institution and the enormous volume of wealth squandered through Mt Gox's spectacular incompetence.

That such an incapable institution was allowed to become so large and pretend for so long that it had successfully maintained its size and importance was a spectacular blow to lay sentiment concerning the Bitcoin space as a whole. When the Pirateat40 ponzi collapsed in 2012 forcing a redistribution of roughly half a million BTC in wealth the space was smaller, the absolute wealth squandered was smaller, and Bitcoin in general didn't merit much attention so when the value of BTC relative to other currencies rallied throughout 2013 most people hearing about and coming into Bitcoin were unfamiliar with the events of the previous year.

Mt Gox was different. By the time Mt Gox finally quit, Bitcoin had begun enjoying regular mainstream exposure and mainstream outlets that didn't care to know better almost always associated Bitcoin with Mt Gox, at least when they weren't too busy associating Bitcoin with drug markets. Because Mt Gox had managed to attach itself to Bitcoin so firmly traces of its stench still waft in some corners of the space. A number of people lost money speculating in Gox's last days. Some once notable names in the space like Roger Ver took serious blows to their credibility when their reckless actions kept people thinking that just maybe Gox might continue to be a thing. Eventually the stink will dissipate from Bitcoin, but for people involved in propping up the Monster that was Gox, the stench will likely stay longer.

The other impact has been in the redistribution of capital. Untold sums of dollars and other national currencies that flowed into Mt Gox under the impression Bitcoins could be bought when Bitcoin enjoyed its last all time high price ended up doing something other than buying BTC. Mind blowing amounts of Bitcoin that people assumed were with Gox simply weren't there. Assumptions many people held about what the space consisted of along with who was in it and where the actual wealth was were shaken. Even the 80,000 BTC moved in the United States Marshals Service auction pales in comparison to the sheer size of the reallocation of wealth following Mt Gox's end.

Certainly its age contributed to the size of the impact Mt Gox was able to have in its death. Hopefully as the lessons of Mt Gox are learned again in the failure of other mismanaged and incompetent services which scam while masquerading as businesses, none will approach the size in terms of the absolute Bitcoin denominated wealth lost. Almost certainly, just like with all currencies before it, the parade of scammers, parasites, and other malicious entities seeking wealth by deception will never end. Mt Gox though should be the last of the big ones.

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