When Mt. Gox Blew Up

I don’t understand Bitcoin. Never have, never tried too hard to either. The whole thing lives in some abstraction layer between code and faith that I couldn’t quite grab.

So watching Mt. Gox collapse was almost a relief. Mt. Gox started as a trading exchange for Magic: The Gathering cards—which really tells you everything about the early internet—and by 2014 it was the biggest Bitcoin exchange in the world. In February, it just locked everyone out. All the customer wallets froze. The price crashed from $900 to $130.

Mark Karpeles ran the thing and quit the Bitcoin Foundation right after. The other board members didn’t believe his explanation. It had that smell of a guy watching his operation implode and having no idea what to do about it.

Here’s what I kept thinking: if I had to choose between putting money into Bitcoin through some exchange on the other side of the world run by people I’d never met, or just buying a bottle of wine and forgetting about it, what would I actually pick? The wine. Obviously.

Maybe that’s not a fair comparison. Maybe Bitcoin works fine and Mt. Gox was just one bad operator, one guy in over his head. But the whole thing felt fundamentally rotten—the idea that you could create money out of code and trade it on an exchange that started as a Magic card shop, and somehow nobody would get hurt. Turns out somebody always gets hurt.