And another one bites the dust :

Friday, 21 December, Year 4 d.Tr. | Author: Mircea Popescu

Straight from the horse's mouth :

Hello all. I'm terrible sorry for not responding to this earlier. A mix of personal issues with searching for a solution prevented me from it.

It's always those danged personal problems, isn't it.

Unfortunately, I have very bad news. I cannot currently proccess your withdrawals. The situation is very complicated and it's all my fault, that's why I feel terrible about it. I tried to make this up, to keep the site afloat and somehow recover the funds, but it's not possible anymore. Right now there are 1786 BTC pending withdrawal, which I can't honor...

That's roughly speaking a drop in the bucket, but given how full that bucket is... no drops allowed.

Earlier this year, I had this "genius" idea which led me to making a fatal mistake. I thought I could provide a hedge fund service for Bitmarket users. There were other sites providing this service so I guesses that it could be successful.

This right here is the crux of the matter. People with no experience, no ability and barely qualified enough to drive a truck, people we normally call "stupid", because that's what they are, people to whom we normally refer to as "idiots", because that's what they are, Dunning-Krugerrands if you will constantly make this mistake.

This is how spam works. Spam itself is not a business, in the sense that it does not come with a positive Expected Value. It comes with a negative EV. Sure, it is argued, but without proof and mostly by parties that are both directly interested in the argument and well known to straight out lie in similar circumstances - such as various US District Attorneys - that there exist some entities and some methods that actually allow spamming with a positive EV. I suspect even this claim is false, but obviously we won't be able to prove it.

So, if this is true, how come and where from all this spam ? Well, idiots, stupid people, Dunning-Krugerrands notice there exists spam, decide that because it exists it must be making money (because if it weren't beneficial the other sheep in the herd wouldn't be doing it, no ?) and start doing it themselves. A few months to a year and a half later, after having spent large amounts of their own worthless time as well as a few dollars here and there (for hosting, for "surefire" tools, for what have you), and after having caused untold thousands of dollars in damage (to the brands that still take affiliates, to the people trying to run the Internet, to random users, blogs, forums and whatnot) they finally give up.

But that does not matter, because during their few months to a year and a half some other idiots, some other stupid people, some other Dunning-Krugerrands in their formative years picked up the idea and are soon going to start spamming themselves. There's an SEO expert born every minute, as the old adage goes.

This is how the various "companies" offering ASICs for Bitcoin mining killed themselves. Some idiots picked a bridge too far : we'll make ASICs! They had not the human capital to make those, they had not the business clout to make those, they had not the financial capital to make those. None, not by a long shot. I doubt they ever were within 1% of average - average! - requirements. But due to the complete popcult bastardization of "the start-up market" none of these considerations matter. They can do anything!

Once some idiots, some stupid people, some Dunning-Krugerrands announced that they set out to do the impossible, a half dozen or so of their peers, failed human beings that have no place in human society and no business being alive, announced the same thing. Why ? Well! Because if those other idiots "can do it", then "why couldn't we ???".

So there you have it. The "market" of idiocy reinforces itself through social proof, which is pretty much the only sort of proof the idiots, the stupid people, the Dunning-Krugerrands of this world are equipped to digest. Before you know it, thousands of their peers have expended a few million dollars into "investments" of the nature of watering the Sahara out of a garden hose.

I had experience in trading before, all I needed is a platform.

There is a category on this blog called "3 ani experienta", which is Romanian for "three years' experience". The name comes from an incident about four years ago, when I came out of nowhere into the Romanian-language web space and made a digg-sort of thing. At the time, there existed a cardboard cut-out of this, made by a collection of the local idiots, stupid people, Dunning-Krugerrands. I was promptly informed that their product is better (in spite of not actually working) because it was made by people with "over three years' experience".

The disconnect of having twenty-something year old cocks telling me about their three years' experience was particularly shocking to me, because Romania had been behind the iron curtain, and so one of the first hundred personal computers to exist at all in this entire 20something million country was to be found in my living room. One of the two at that time in the whole town.

But you see, twenty years or so later random kids born at night yesterday "have experience". All they need is a platform, to plant themselves face down on.

And there was one - Bitcoinica. I was so convinced with this idea (and sooo wrong in hindsight) that for a while I kept majority of "offline" Bitmarket funds there. What I didn't expect was that one day it could just dissapear - taking all the money with it. What's worse, the funds were shorted when it happened (converted to USD and sold) - and after Bitcoinica dissapeared BTC price rose by about 250% until now. So while there is still chance to recover the funds (there is an appointed liquidator assigned to this case and I've already sent in claims) it will be not enough to cover all people's funds. For the record - there are 20161 19980 BTC missing (edit: I subtracted my funds that also were deposited on Bitmarket), and Bitcoinica claims total for around 50K USD (the exact amount is uncertain because the liquidators haven't yet stated at what rate they will liquidate positions).

At the time there existed two platforms : MPOE and Bitcoinica. They were both born within a week or so of each other (MPOE was first). Our idiot does not mention this because he does not know about it, as part of the job of being an idiot. The other part of the job of being an idiot is : Bitcoinica went under promptly, MPOE still trades, a year and a half later.

Sadly, I alone, I'm out of options. I don't have own money to pay for this loss (Bitmarket never made any real profit and I make up for a living by part-time web/mobile programming). The options for making this up for everyone as I see are:

- find an investor (or investors) that is willing to cover at least part of is debt. I would transfer all rights to the website software, servers and database to him and also work as a technician, possibly also implementing features he'd wanted. If you reading this have the funds necessary to make this work, PLEASE contact me on this.
- freeze all current funds and "start over" trading with explicit fees, implementing much-needed features like rating system and others. All profits from the fees would go directly to a fund for repaying the debt. I'm afraid that this option alone is not enough though - many people won't (and have full right to do so) trust the site again...
- something else?

That something else should be suicide. I am convinced that if in general society encouraged kids to take risks and at the same time encouraged them to kill themselves once their risk taking failed we would have much healthier youth (mentally especially), a much better education system, much nicer things, much less debt and pretty much no problems at all.

Again, I would like to deeply apologize to everyone involved with this. I'm really sorry . I made a fatal mistake and I have to deal with it now. If you thinking about sueing me about this - you have full right to do so, but I don't think it's a good idea - I don't have any money so winning a case will get nothing for you and possibly ruin my life . It also would prevent me from doing anything to alleviate this situation, and I really want to make this up for everyone and I'm willing to do anything in my power to do this. I had many sleepless nights thinking about how I can make this tight. I just need some help with this.

Leaving alone the fact that he fails to correctly identify his mistake (hint : no, it was NOT "going on Bitcoinica"), suing him into the ground would be a nice substitute for suicide, except it costs money. Money he isn't worth. Even if it hapens it's an anecdote rather than a structural solution to a structural problem.

On a more general note : the time of cowboy style, "one man and his hopes" fiat-BTC exchanges has passed. The exchange market is moving into a new phase. There is room on it for MtGox, on account of its old age and well known brand, and for people like the Frenchies doing that bitcoin-central partner-with-a-bank thing. All other exchanges are going out, and things being what they are the majority of them will be going out uncleanly.

Because of this, keeping money in any other fiat-BTC exchanges than those two is pretty much cruisin' for a bruisin'. Spot sellers may still be safe for a while, select ones may even be safe forever (as they're a subset of the OTC style marketplace), but for better or worse cowboy exchanges are a thing of the past.

Category: Bitcoin
Comments feed : RSS 2.0. Leave your own comment below, or send a trackback.

5 Responses

  1. [...] that while we’re very harsh - and rightly so! - on BTC site operators (and I am possibly harshest of all), our fiat counterparts are ordinarily doing a much worse job of it, on all scores. It’s just [...]

  2. [...] (And yes, this is my way of saying that no, you shouldn’t be starting yet another “exchange” just because you figure you can code [...]

  3. [...] quote an older article in relevant part, The time of cowboy style, “one man and his hopes” fiat-BTC exchanges has [...]

  4. [...] works, because hot damn! Ponzi schemes and email spam go together like the horse and carriage. So, spam : This is how spam works. Spam itself is not a business, in the sense that it does not come with a [...]

  5. [...] all day on the tube you might just make enough to keep going, maybe. Long enough at the stretch for it to look like a business, at any [...]

Add your cents! »
    If this is your first comment, it will wait to be approved. This usually takes a few hours. Subsequent comments are not delayed.