When You Suck at Doing What You Do

The big news circulating around the Bitcoin community is the apparent demise of Mt. Gox:

As of late Monday evening, the embattled Bitcoin site MtGox appears to have pulled the plug entirely in the wake of sustained DDOS attacks and the “transaction malleability” problem that has plagued other websites. The site is gone and the company’s Twitter account appears to have been erased entirely.

Several news outlets seems to be reporting this event as the death of Bitcoin. Anybody who understand the Bitcoin protocol knows this isn’t true since Mt. Gox didn’t have any control over the block chain, which is what determines who has which Bitcoin. Mt. Gox was merely one of several exchanges although it was the largest.

People who have kept an eye on Bitcoin related news know that the people behind Mt. Gox has consistently demonstrated incompetency. It always baffled me how it was able to maintain the status of the largest exchange when other exchanges did a better job and almost always had better prices. But Mt. Gox’s incompetency eventually caught up with it and it now appears to have gone under. This is an example of a free market at work. A company that sucked at fulfilling the desires of the market went away.

While it does suck for any individual who had Bitcoin or fiat currency in a Mt. Gox account it should also teach a valuable less: you cannot trust a person you’ve never met with your money. Bitcoin allows anybody to create a wallet. So long as you keep your private key private any Bitcoin sent to your public key are secure. I keep a little Bitcoin in online wallets for quick transactions but never more than I’m willing to lose. All of my other Bitcoin are sent to an account that I possess the private key for. This is something I encourage everybody to do since it’s the only way you can guarantee your Bitcoin won’t disappear if the online wallet provider disappears.