MPEx (S.MPOE) Closing Statement

Tuesday, 05 April, Year 8 d.Tr. | Author: Mircea Popescu

When I started MPEx back in February 2012 the world was a very different place. The announcement is actually in Romanian, for one thing. Let us quote a few words.

In the grand tradition of European multiculturalism, comments in any and all languages are welcome.

Currently no way of investingi bitcoins exists. This state of affairs seems to me (together with the difficulties John Q. Random faces trying to buy bitcoins with his cc/pp) the foremost drag on the growth of the bitcoin idea.

Seeing as MPOE has by and large come out of beta, I find myself in the most delightful position of being able to do something about it. As such, starting right now, you will be able to purchase stocks in MPOE and MPOE bonds, or in other words invest bitcoins in the proper sense. I will explain the details below, but first, a run-down of the financial results of MPOE for the past six months:

Oh how things have changed. Bitcoin, far from being "an idea", is today the currency of an independent Republic, powerful enough to compete with the fiat nations of the world, and hold its ownii. It's not yet where it builds nukes and carriers, it's not altogether clear it even wants to do such a thing, but certainly on the list that includes Holland and Kiribati, Dominica and Germany, Brazil and The Gambia, Samoa and Nigeria, B,TMSR~ does not come out last.iii This is significantly more than any five-year plan has ever achieved, which I suppose says a lot about the virtues of planning.

Back in 2012 the "community" of idiots and imbecilesiv saw pirateat40 as their fixed-income expert and nefario & friends as the equity experts (let's not even get into Bitcoin "banking") ; saw MagicalTux and Jared Kenna as their FX experts ; saw Gavin Andresen and Mike Hearn as their developers Power Rangers and so on and so forth. The "community" of idiots and imbeciles is alive and well today, of course, but as an anonymous, seething blob of nothing. Relegated to the depths of retarddit and tardstalk - much like their fiat counterparts dwell in the hallowed halls of yahoo finance "discussion boards"- there's exactly no chance and plainly no possibility of one from their midst ever rising again to cause any sort of trouble for anyone. This is a significant change, because four years ago it seemed not merely possible, but outright probable that Bitcoin will raise some of the common people into positions of relevancy in the world. It tried.v It failed.

Five years ago my intentions were, and I quote,

I do not intend to hold on to my controlling interest indefinitely. Once the above is complete, and if I consider the general Bitcoin community is both strong enough and competent enough, I will sell S.MPOE controlling interest (50% + the voting share) to a group of credible investors, with a credible plan in place, through a proper auction much like what you'd see if the Russian government sold its Gazprom (minus, of course, all the graft). Should this ever occur (and to look at the forum digests I receive you'd think it absolutely never will) I will consider this little experiment a complete success, as far as I'm concerned (not that there's much to complain as it is). A closed deal, a second retirement for me personally.

Then again, five years ago the projection re Bitcoin's evolution were, and again I quote,

Yet another one of them is that consumers revolt, entrepreneurs intervene, before the end of 2015 there's about a thousand to a million different Bitcoin forks, each with its ten million-ish monetary base worth about a dollar, on global average. The size of the inter-Bitcoins market, the complexity and confusion ensuing makes pretty much everything unmanageable for the "ordinary person". Hedge funds and banks (the ones a little ahead of using Excel) that trade in this murky complexity make a killing and become the principal driver of economic growth worldwide. Not only is the consumer about as screwed as is currently the case, but to everyone's benefit he has just been clearly proven yet again that revolt = being fucked in the ass harder, longer, with a thicker implement with sharper barbs on it. Also conveniently, the thing to revolt at has become much more vague and intangible. On the balance of probabilities this would seem the most likely outcome, strictly because history unerringly flows in that direction which most cruely rapes the "average person".

This is exactly what has happened, of course. The idiots did what they do best, and for that matter do always : they demured. Because it's always easier, and cheaper, and that's the whole of their law. Far from being the open exercise in community building and opportunity-for-everyone fiesta, the history of Bitcoin turned slowly but inexorably towards excluding the common man. This was not deliberatevi, mind you, and to understand why in 2012 anything anyone wanted to do was make mining rigs "for the people" whereas in 2016 common people simply can not buy new miners, no matter what happens and how much money they're willing to spend, all you have to do is read the bloviation of "the public".

Meanwhile, the enemies of Bitcoin grew ever more numerous, ever more organised, ever more scared and ever richervii (as far as printed paper makes one richerviii). Under their pressure, ever more items have to be driven away from public discussion - because the educational value to the various John Q. Pointless and Suzy Q. Witless is far surpassed by the intelligence cost, and besides, Johnny and Suzy already have plenty of more valuable educational material available they're not reading anyway.

The intention throughout was to slowly open more and more of MPEx' inner workings to the public. The practice has been that MPEx became ever less transparent. By now its opacity verges on the ridiculous. Yes there are perfectly good reasons for which trying to privatize a supplier for a major defense contractor, with a view to expanding the process all the way to eventually privatizing the entire government is more likely to fail than to succeed. It is time to face facts and admit the simple truth : it failed. It makes no sense to maintain the pretense that MPEx is a public company. It is not. It can not be, try as we might.

Consequently, MPEx is going private, through a sale for 249`933.22034807 BTC in cashix. Each share has received a 50`000 satoshi disbursement, ~49`987 satoshi of which representing the value of this transactionx and ~13 satoshi representing unpaid dividends for February 2016. S.MPOE will be subsequently delisted, and holdings eventually deleted from accounts.

This transaction values MPEx at 499`866.44069614 BTCxi, enshrining MPEx' status as the most important thing to ever happen in Bitcoin finance up to this point, as well as for a good chunk of the forseeable future.

Throughout its lifetime, MPEx paid out 21`416.43794706 BTC in dividends, which dwarfs the cumulative profits of all the various fiat businesses purporting to have some sort of connection to Bitcoin combined, and further strengthens its unparalleled record of financial success.xii

As a privately owned entity, MPEx will continue its operations as before. I maintain majority ownership, as well as executive control.xiii I remain open to listing worthy companies, should any be found, and in general remain committed to the success of Bitcoin as the currency of the Republic, and to the supremacy of the Republic over all other groups and persons.

  1. This word is important. It does not equal "expend," even if we're talking about expenses that are theoretically able to bring future gains. For instance, money spent at the craps table could yield future gains but that still doesn't make them an investment. []
  2. There's little point (and little chance) we'll get into a discussion of that many specifics, but let's satisfy ourselves with a brief run down of its finances. Consider :

    pete_dushenski mircea_popescu: it's sorta incredible that the fiatists who need infinite growth all want to cut their own throats with reduced consumption while tmsr~, who doesn't want anything to do with infinite growth, is buying and consuming like it's going out of style
    mircea_popescu actually, best estimate i can get puts TMSR GDP growth for 2015 somewhere around 450-500%. that's not 4.5-5%. it's not 45-50% either. and by the looks of january, Q1 2016 might actually beat that. so... glhf, but never in the history of sovereigns has there been such a wonder etc.

    asciilifeform waiwut
    mircea_popescu to which part ?

    asciilifeform tmsr gdp...
    mircea_popescu apply common accounting standards to the work done, see what it adds up to. if you produce a mythical man-month's code for trb, that adds the accounting value of a man-month to the tmsr gdp whether you mean for it to or not. [Ask Naggum to explain all this to you. He knows.]

    asciilifeform denominated in what, martian bzortls ?
    mircea_popescu any currency of your choice. commonly usd, seeing how gdp is a usd thing.

    danielpbarron Eulora alone..
    mircea_popescu yeah but he wouldn't be familiar with that.

    asciilifeform humour me, show how to denote that man-month in usd.
    mircea_popescu admitting you're worth what sv pays for top talent, comes to about 60k or so. iirc the per-capital costs are in the 700-750k bracket pa. per-capita* i mean. AND, to add to the list of wonders, all that growth is financed purely through unbacked deficit spending! tmsr really is what usg aspires to be, funnily enough.

    asciilifeform what's an isis mujahed worth, per capita, in usd ? (how much must one pay on open market to get somebody to allah-snackbar)
    Jan 31 01:47:08 mircea_popescu i think that's undefined, in the general. in the narrow particular, iirc blackwater charges something like 1.2-1.5. depends on various factors, but thereabouts. if they gotta drone it tho, it gets a lot worse.


  3. I understand that this statement of fact is nevertheless very emotionally charged for very many people.

    Understand in turn that your personal approval or acceptance are neither sought nor in any sense necessary. Facts are facts, independently of your personal agency, be it exercised ineptly but directly or ineffectually through collective representation. Statehood is an objective matter declaratorily established, and not a conventional matter. []

  4. Hey, anyone remember necrodearia/miserydearia ? How about usagi ? How about aethero ? We could be here a while. []
  5. God knows it tried. Oh, how mightily it tried. But the problem with attempting to lift shit is not that you won't find a power source sufficient to get it up any hill, and into orbit, and into intergalactic freedom even. The problem with attempting to lift shit is that there's no way to attach to it the sort of fixture that'd convey that power. Africa isn't poor today as a millenium ago because nobody tried to lift it ; it is poor because it can't be lifted. Italy is not a failed state today, in spite of the EU's best efforts, after being a failed state in the 1940s in spite of the previous-EU's best efforts (known at the time as the 3rd Reich), after being a failed state in the 1900s in spite of the Habsburgs' best efforts, after being a failed state throughout the medieval period in spite of the Holy Roman Emperor's best efforts, after being a failed state throughout the classical period in spite of the Emperor's best efforts. Shit is shit. []
  6. On the contrary, we tried to prevent the outcome throughout. Let's quote :

    It is dishonest to claim that 10 times 10 is a thousand. It is dishonest to claim somebody is "unprofessional" because they're either not working for whoever's shilling you out or else you just don't like them. It is dishonest to deny the facts of the matter, such as they are.

    That MPEx is held to standards nobody else is held to is perfectly fine. That people ask "Hey, what happens in case your domain gets seized" is great, because it gives us the opportunity to answer. I can understand why we're the only exchange asked these things: nobody cares about the others. Asking questions is not the problem. Pretending questions were not answered just because the answer doesn't come out to be what you wanted or expected it to be, that's dishonest. Getting a good answer and pretending it's a bad answer, that's dishonest. Claiming to be insulted by "LOL" and using "fuck" as a form of address, that's dishonest.

    So, as far as "professional" goes, let me tell you a little about things you have no way of knowing, given that I work for the - so far only - people who professionally handle BTC securities. There are exactly two bitcoin companies listed in the bitcoin world so far. One is MPOE/MPEX. The other is SatoshiDICE! The reason both these exist as available investments for people in BTC is not the intrinsic strength or value of the investor market in BTC. Either owner could have had much better deals going to the established marketplaces.

    The reason both of these exist is that it just so happens that their owners simultaneously a. don't really need the money and b. would like to see BTC flourish and develop. That's it. No amount of ranting and raving about how 10% dividends a year is too close to real world's 2.5 dollars / 650 dollar share and not close enough to imaginary 7% a week returns is going to matter in that discussion, because it can't make the respective owners either poorer or less desirous to see BTC flourish.

    S.MPOE makes about half what S.DICE does, and is currently trading at a slight premium over what S.DICE is asking for. Thus the P/E multiplier of S.MPOE is closer to about 20x. That is what investors (the real variety, not the forum dweller variety) value it at. It is true that the owner there retained about 98% so far, and so that might have an impact, or else the growth potential is valued differently, or what have you. Either way that falls, based on actual experience as opposed to imaginary experience, S.DICE is a good buy.

    We have talked to numerous companies that have valid business models in order to offer their shares to the interested public. There are exactly two answers that we hear with inordinate frequency. One is that the owner doesn't need the money, so a listing doesn't make sense. The other - heard in general as a reply to the observation that BTC will go to shit in a bucket if serious businesses don't start offering real investor debuchees and actual financial instruments - is that the owner does not want or need the hassle of a bunch of drama from two penny investors.

    That is what you are doing, with your unwelcome and unwarranted delusions of self importance. You are, with every dishonest remark, with every goblet of bile, with every hateful and rude comment on this forum, you are making it more difficult for the actual professionals to close actual deals, and you are making it less likely for actual businesses to go BTC rather than traditional, and in short you are sticking nails in BTC's coffin. It's that simple: as long as BTC is perceived as "that currency in which they do Ponzis" we are, collectively and generally, going nowhere. We have a limited window of time to make BTC work, financially. If in 2020 all that's happening are still "investments" of the ilk we've seen offered all over this forum, the very notion of cryptocurrency might be too discredited to ever take off. If this insanity going on the lines of "bitcoin is for raising money to buy a toaster" is allowed to continue it might become our ceiling. As it is it will come to haunt us.

    I haven't seen you explaining why ZIP is such a bad thing, back then. Why not? How's the honesty/dishonesty going there? I don't recall seeing you explaining why LIB.x were bad things, back in the day. Were you even around, in those times? Pirate uninsured bonds are trading in distress, 30-40 cents to the dollar. I was there saying it's dishonest, back then. Were you? Where were you? Were you being honest?

    So, please, take a step away from your computer, and take a step away from yourself. And think. Am I being intelligent, and am I contributing something useful? It's perfectly fine to not have the money to go in, it's perfectly fine to have the money and not want to go in. It's perfectly fine to not go in. It is perfectly unfine to be carrying on in this manner.

    Thousands upon thousands of billable hours went into trying to educate "the general public", that consumer who has come to expect. They'll all go on the Republican budget, I'm sure. []

  7. One example to stand for many : USG.MIT recently announced a plan to spend a billion imaginary dollars to try and counterbalance tmsr. They're resisting today like they were resisting in 2013, it just costs them more now. It will cost even more in the future. It will become untenable in the future. They will fail again, of course, as they've failed each and every time before - but that has exactly nothing to do with the general public - if we were to be defended by John Q. Random, we'd be in the position of "free & open source".

    Two degrees of magnitude in three years, what ten million might have bought back then one billion probably doesn't buy today. What other nation out there forces the USG to spend billions to defend its miserable means&ways from the light of day ? []

  8. By the way, did you know the US spends more on its military than everyone else combined, including all the numerous powers that regularly kick its ass in the field ? []
  9. The largest Bitcoin cash transaction to date, I might add, as well as the largest exit of a Bitcoin business, and on and on. []
  10. Considering that the only two S.MPOE public offerings to date closed for 9`085 and 2`433 satoshi respectively, for a volume-weighted average of (2`433 × 5`000`000 + 9`085 × 1`000`000) ÷ 6`000`000 = 3`541 satoshi, this sale represents a 1`411.38% gain for the investors, or about 194% per annum in the interval. Congrats to the winners. []
  11. Which is roughly half of its peak value in Bitcoin, and a little under a fifth of its peak value in fiat - ironically, S.MPOE lost less ground in the past couple of years than BTC did. []
  12. See for instance The best investments in the history of Bitcoin as well as The list of discontinued assets on MPEx. []
  13. To assuage any possible concern : neither MPEx nor myself personally are currently embroiled in any sort of legal dispute with any sort of soi-dissant "regulator" in any jurisdiction. The notion that some fiat pretend-sovereign or other has anything to do with this measure is significantly less sensible than the notion that 17 Bitcoin and change is what caused the closure of Bitbet, as ridiculous as that notion may be. I have yet to meet the fiat government that's worth 17 Bitcoin and change. []
Category: MPEx
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4 Responses

  1. Scalpel`s avatar
    Monday, 2 May 2016


  2. Maximian`s avatar
    Saturday, 14 May 2016

    Mircea - I'm glad that that you're keeping MPEX running. It's been the most reliable and trustworthy asset exchange in Bitcoinland, bar none. I made a shitload of money off it in the early days - here's hoping that it regains its former glory.

    (please erase my gimped earlier comment)

  3. Mircea Popescu`s avatar
    Mircea Popescu 
    Saturday, 14 May 2016


  1. [...] S.MPOE went private earlier this year, and was sold for 234,000 BTC – roughly $150mn at current prices. Given this is merely a single (albeit expensive) Bitcoin company, it isn’t unfathomable for a well connected and intelligent group of individuals to accumulate a Philosopher’s Legacy. A few hundred million dollars goes a long way, especially if held in a currency that is impossible to censor. Blood diamonds carry the same capacity, but for more sinister and aggressive militant causes. Despite the UN and the US attempting to restrict the export of blood diamonds from Africa, their fungibility and value still remains intact allowing for warlords to finance their child armies. Bitcoin will be a more moral and ethical fuel – a fuel to defend citizens from war, not provoke it. [...]

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