Children and their delusions. Today, Jared Kenna and Ryan Singer

Tuesday, 19 March, Year 5 d.Tr. | Author: Mircea Popescu

This is a historical problem of BTC.

Two years ago a troop of children pretending they're adults doing srs bzns started something pompously called Bitcoin Consultancy, which was going to be the king and queen of all Bitcoin. The net result of trying to apply their imaginary "expertise" in the real world ? Bitcoinica crater #2. This is what happens when you have somebody famous for being mentally retarded team up with someone famous for having sent the entire userbase an email containing the emails of the entire userbasei and start doing "security" and "project development". The fact that there was already somebody doing Bitcoin security and real Bitcoin project development was obviously lost on them, seeing how if your betters don't talk to you it must mean they don't exist. Logic, no ?

One year ago a troop of children pretending they're adults doing srs bzns started something pompously called Bitcoin Foundation, which was going to be the king and queen of Bitcoin. To this day nobody cares and nothing was accomplished by it (if you exclude soiling Gavin Andresen's name slightly in exchange for collecting a few thousand BTC to allow Coinlab to float its otherwise dysfunctional business). Recently the same idiots came up frothing at the mouth about how they're going to "bring Bitcoin to Wall Street", in the sense of somehow getting all Wall Street to move to Silicon Valley Bank or somesuch. The fact that there's already somebody doing the Wall Street to Bitcoin bridge was obviously lost on them, and so the incoming bitchslap fell deafeningly on young ears.

Also about one year ago a troop of children pretending they're adults doing srs bzns started work the wrong way on solving problems too big for them to correctly represent. Predictably that went nowhere. A well, this is how children learn and grow, right ? By failing.

tradehill-dorksJust now a couple of dorks (pictured, right) that apparently live in a land where there's exactly one suit jacket and exactly zero shirt irons relaunched the "embattered" TradeHill "brand".

The TradeHill story is a sad one :

7 March 2012 Tradehill, at the time the second largest Bitcoin exchange closes down, claiming Dwolla stole its customer funds and threatens to sue. Dwolla demures, suit goes nowhere. Jared Kenna makes secret payments to select users. Partners with Jonathan Ryan Owens (see above) creating 20 Moves, which somehow magically has the capital to start real estate development in San Francisco.

Total loss : 200k BTC (estimate).

Basically these people ran off with 200k BTC, worth at the time about 2-3mn dollars. Meanwhile BTC climbed enough to make their loot worth closer to 10 mn. They claim they've repaid 5, which even if true leaves a pretty penny for paying for the sort of dumbassery Venture Beat publishes. To quote :

“We want to be the grownups in the Bitcoin space,” said chief operating officer Ryan Singer in an interview. “Our goal is to be the institution that other institutions turn to when they have needs related to digital currencies.”

Heard that before ? I kinda have, ever since MPEx came out and said plainly that the "average user" is not interesting I've been hearing it plenty from the sort of knuckleheads that think entrepreneurship happens at conferences and leadership is something you can learn sitting on a chair. No credit given, of course, because that's what children do : steal the car keys and then drive the car into a tree (if they manage to start the engine at all).

Let's do a side by side, I like those :

As stated in various other venues, MPEx does retain ample counsel. We’ve proactively prepared a defensive litigation plan and written as well as oral arguments in order to be able to defend our position as well as the interests of the larger Bitcoin community in multiple relevant jurisdictions.
~ The reasons why Bitcoin securities can’t be regulated by the SEC, 6 October 2012ii

“We have more lawyers than engineers,” said Singer, who stressed that the new Tradehill will be fully compliant.
~ DorkHill, in VentureBeat, 18 March 2013

Yes but 30 BTC for registering ? That's extortion!
That fee was waived for about a month during the beta, so at the very least it'd have to be a combination of extortion with laziness. Then it was 20 BTC. Now it's 30 BTC. The fee is projected to keep going up for the undetermined future.
~ MPEx FAQ, since March 2012.

Every client will receive a $75 credit to test trading and can activate an account with a deposit of at least $10,000, 200 Bitcoins, or $5,000 in Mt. Gox codes.
~ DorkHill, in VentureBeat, 18 March 2013

Welcome to MPEx
The only Bitcoin service that has never been hacked.
Established August 2011.
~ MPEx main page.

Tradehill claims to be the first institution in the Bitcoin market to hold over $5 million in user funds and process full payouts. “Every other Bitcoin company that achieved scale either lost money in a hack or went insolvent,” a press release states.
~ DorkHill, in VentureBeat, 18 March 2013

The difference, of course, would be that some of these quotes are true and then some of these quotes are lies. (And no, PR does not consist in telling lies, whether they be flaterring or unflattering. PR consists in telling the truth.)

Here's the cold facts of the matter, bois : claiming you're me doesn't make you me. Pretending to be what you think I am doesn't give you a leg to sand on. Stop embarassing yourselves, it's ridiculous. You are starting as underdogs, as humble failures, as noobs yet to prove yourselves in the best case. The Bitcoin space has authority present and hierarchy extant. Learn to show respect to your betters and deference to your superiors and maybe, just maybe, one day you'll amount to something.

PS : Comment section on that article is instructive.

Kurt Durjan • 11 hours ago
They may have refunded investors when they went offline, but they didn't refund all the depositors and I have been unable to reach them. They should finish cleaning up the mess from the first go around before starting another.

Ryan Singer • 11 hours ago
Hi Kurt,
Please email us at and I will put you in touch with the person doing payouts for the old company. Nearly all of the funds have already been claimed, and we would like to make you whole today if possible. The only information we need is the email address you had registered with. We will send an email to that address to verify, and then process the payout.

"The person doing payouts for the old company", you see. Which isn't the dorks in the pic nor anything named TradeHill. Just... some persons and some old company.


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.
~ And another one bites the dust :

  1. True story. Strateman aka phantomcircuit. Because python. []
  2. And let us note for the benefit of the various nobodies that had oppinions on this subject at that time : FinCEN just confirmed our position. MPEx was right, except MPEx was right six months before you figured it out. []
Category: Bitcoin
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10 Responses

  1. Mircea Popescu`s avatar
    Mircea Popescu 
    Tuesday, 19 March 2013

    Meanwhile, on irc :

    {pgp} the 'hill is back up...
    {assbot} [MPEX] [O.BTCUSD.P750T] 999 @ 0.49193244 = 491.4405 BTC [+]
    {pgp} i wonder, do you think that they are just running a gox shadow book?
    {pgp} when the connection to gox dies - so does their "prime" order book
    {mircea_popescu} pgp now this is an interestinfg observation
    {kakobrekla} stabinthefacehill
    {pgp} either they are the worst technologists ever or they are relying on third party
    {kakobrekla} its prime, ya know.
    {mircea_popescu} certainly the 2nd seems plausible.
    {mircea_popescu} 1st being a certainty.
    {pgp} lol
    {pgp} that is exactly what they are doing... they are showing the gox book $.55 worse... lol...
    {mircea_popescu} lmao
    {pgp} I'd call that a scam, unless, of course, it's "free" to trade with them, in which case they are embedding the gox commission in their prices. In any case, their pathetic relaunched "website" has no information on fees...
    {mircea_popescu} pgp im quoting this.

    Seriously now...

  2. Influencere care esti.

  3. TH seems to be following a bit of a cargo cult mentality. Having some lawyers around might be associated with having a compliance program, but it does not in and of itself lead to effective compliance.

  4. Mircea Popescu`s avatar
    Mircea Popescu 
    Wednesday, 20 March 2013

    Talking about "having lawyers around" is part of the general plan of "displaying good intentions". Actually having lawyers around actually shows.

    Obviously the crowd doesn't know where to look and so the usual moral hazards ensue if we take the crowd's judgements into account. We blessfully don't.

  5. Tatarel`s avatar
    Tuesday, 2 April 2013

    Te felicit pentru blog, nu multi gasesc in folosul lor sa sa posteze in engleza si sa fie asa de bine targetate.

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