An Open Letter to Mark Karpeles

Hi Mark,

Let’s not sugar-coat things, your position is bad. Super bad. MtGox, in its current incarnation at least, is dead or dying and you were the guy holding the wheel when it wrecked. People are calling you “Kerbopples” and making jokes about your sugary desert coffees. Old pictures of you being a dork have surfaced – the kind every geek has, I would remind this community – and the attacks have gotten personal. I know that you feel responsible for more than Gox, you feel like Gox and Bitcoin are so intertwined that if you kill one you kill both. You won’t, so stop worrying about killing Bitcoin – this wound is far from fatal, we will recover, but your next moves determine how much damage we have to recover from.

Gox is not Bitcoin in the same way that our “too big to fail” banks are not the dollar. You have to remember that this community was founded by outrage over bank bailouts and we explicitly and intentionally want business in our space that perform poorly to actually have the chance to fail. It will hurt us, but if you think it will kill us you’ve underestimated the resilience of this technology. Bitcoin is anti-fragile, just getting started and we the users scoff at the idea that this is the end.

It is still, however, quite bad. You lost a lot of peoples’ money and there will be headlines decrying “The Death of Bitcoin.” There’s nothing any of us can do to stop that, those headlines come every time something bad happens – but you’re in a unique position in that you alone can determine what the honest and decent half of the media writes. If you really do care about Bitcoin, if you really want to minimize the damage, control the spin.

The bad stuff has already happened. The facts of the case are what they are and that won’t change. What will change is the headlines and what will change them is the content of your next public statements. If you come out blaming Bitcoin again – even if you legitimately feel it’s Bitcoin’s fault (it’s not, but you’re allowed to have feelings) – every headline will read “The Death of Bitcoin” and most of the community will likely come to hate you for the damage that causes. At best you slip into obscurity, at worst you are near-universally reviled. If, however, you fall on your sword, prove that you care more about Bitcoin than saving face, there is a large portion of the community that will at least respect you for doing the right thing – and far more importantly, the headlines will read “The Death of MtGox” instead.

It’s a shitty thing to have to ask someone to do, I know. It’s not fun to take the abuse and it will come. What you need to realize is that it will come whether you do the right thing or not, and it will come harder and faster if you don’t. At this point I’m not sure you can pull yourself out of this one – you probably don’t have the option of fully saving your good name. I could be wrong, but in my eyes you’re left with the choice between bad and worse and I don’t think I need to tell you which is the smarter choice.

It’s also worth noting that this doesn’t have to be the end for Gox. Other companies, other exchanges even, have survived insolvency (for a time) in this space. Remember BitFloor? It may not have worked out in the long run, but they had a decent idea: Convert your debt to equity, re-launch under new management and start paying dividends until your customers are made whole. This community will respect Gox a lot more if it can at least try to pay its debts. Even if it doesn’t work, Gox at least has the opportunity and the responsibility to try.

This is a terrible moment for everyone in Bitcoin and a worse one for you and your company. Our task is to survive this, no matter what you do. That’s our legacy. History will remember this movement by what we’re able to survive and what finally takes us down, these are our defining moments – and this is one of your defining moments. History will remember you by the choices you make today.

One day in the distant future, you, me, Gox and Bitcoin will all be dead – there’s no stopping that – but that day is not today. Today is the day we choose our legacies. Choose wisely.

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  1. its "Kerbopples". I thought of it seeing him on the bosu ball.

  2. Good and balanced post. Tipped 0.00111111

  3. What exactly do you expect Mark Karpeles to do? He is out of the game.

    • He's technically not out of the game until he's nominated a replacement. Chances are he will make some sort of a public statement when he does so, and his replacement will likely make statements too. I want him to think very carefully about those statements, because as shallow as it seems that will determine a large percentage of tomorrow's headlines and we just don't need more bad press.

  4. Good statement and advice for Mark. I would only say that I don't think this is as bad for Bitcoin as you make it seem. It was pretty easy to tell from a long time ago that Gox was fishy and smart (not emotional, lazy, or greedy) money got out quite awhile ago. Gox dying was the proverbial ripping off of the Band-Aid, the gangrenous amputation, the tooth pulling that we've all been waiting to happen for some time now. Bitcoin is stronger now.

    The only real damage is to users that got burned by Gox and will be unable or unwilling to re-enter and the inevitable FUD in the mainstream news that may slow adoption. I got in after hearing about the $266 bubble last year, I was intrigued, not scared by the prospects. The community will have to work to spread knowledge of Bitcoin to overcome the fear spread by those who are scared or uniformed.

    • I agree that this isn't as bad for Bitcoin as Karpeles thinks it is, but I'll also say that the full damage of this hasn't been done yet. There is still more to come and Karpeles has it (somewhat) in his power to limit how much more hits us.

      As I said, Bitcoin is anti-fragile and I scoff at the notion that this is the end – but that doesn't mean we're not in damage control mode right now.

  5.… another letter with similar sentiments

  6. I am agree with David`s letter ,
    Lets contact Karpeles, to change model of gox business to be open to communiy, rent third party audit and share ownership of mtogox to users,
    proportionall amount of there Bitcoins. And return fiat money to customers, as if there is not enought fiat money in mtogox bank, then Mark will be in jail soon.

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