In this week's bitcoin review, we take a look at MtGox's CEO's first interview since February and today's auction of seized Silk Road bitcoins.
"I learned a lot, but I lost a lot"
Mark Karpeles has remained relatively quiet since February after his bitcoin exchange, MtGox, went under and lost 750,000 customer-owned bitcoins (but then found some of them). Karpeles' silence seemed like a reasonable defense against the thousands of angry creditors that blame him for their loss of fortune, but the CEO has recently re-emerged on Twitter. While he does spend some of his time responding to tweets about the exchange, he also posts photos of his cat Tibanne and sunsets in Tokyo.
Now, he's also back talking with the press.
The Wall Street Journal on Friday published the CEO's first interview since MtGox collapsed in February. The Q&A portion of the interview is here, but here's what stood out to me:
- Karpeles said his two downfalls were security -- both on the network and physical guards -- and in not hiring other executives to help him manage the company.
- Despite finding 200,000 bitcoins during the bankruptcy proceedings, he doesn't believe there are any left to be found.
- The WSJ said Karpeles would prefer someone to take over the exchange, but suggested concern about Brock Pierce's plan to rehabilitate the exchange using customers' money.
- On the future of bitcoin: "I believe decentralized currency has the potential to change the world. But bitcoin itself must become much better. Right now, it is so easy to use it for illegal activities, such as money laundering and drug trading."
Karpeles' view on the future of bitcoin didn't sit well with many Redditors or fans of the currency who want to keep the focus of bitcoin on its potentially revolutionary blockchain and what it could mean for financial technology.
However it's still hard for bitcoin to shake its early connections with illegal activities. Today, after all, is the day of the U.S. Marshals Service auction of 29,656.51306529 bitcoins that were seized from the servers of the illegal marketplace Silk Road. (The bitcoins belonging to the marketplce's alleged founder, Ross Ulbricht, are not up for auction in this round.)
The online bidding runs today from 3 a.m. PST to 3 p.m. PST, but is only open to qualified bidders who have the $200,000 in cash for the down payment. The winner will be notified on Monday.
As to who is in the race for the approximately $17 million dollars worth of bitcoin? Well, the U.S. Marshals did the press a favor of accidentally leaking the list by hitting the wrong button on an email. From that list, it looks like many are already bitcoin investors or entrepreneurs from both the Valley and Wall Street looking to double down on their investment by snapping up these coins.
Bloomberg interviewed Barry Silbert, CEO of Secondmarket, whose name was on the leaked list of interested parties about the bitcoin auction below:
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As for what it's going to do to the price of bitcoin, we will have to see after the auction winner is notified on Monday and the coins begin to change hands. It's likely there will be an increased trading volume, but it's unclear if people will want to be buying or selling as a result. Either way, we saw tremors in the market on June 18th when the Marshals announced the auction, so expect an aftershock likely on Monday at the auction's conclusion.
The market this week
The price of bitcoin danced over $600 for a few hours on Sunday before falling as low as $560 later in the week. It closed last night up three percent at $579.38 and is up another one percent to $585.17 as of 10 a.m. PST.
For background on why we're using Coindesk's Bitcoin Price Index, see the note at the bottom of the post.
In other news we covered this week:
Here are some of the best reads from around the web this week:
- Bitstamp is one of the largest BTC-USD exchanges and is considered a 'backbone' of the bitcoin economy. Forbes' Kashmir Hill talked to the two young Slovenian founders about building their business.
- Bitcoin's developers possibly represent the "world's largest R&D community," said Andreessen Horowitz's Chris Dixon.
- GHash was heavily criticized after the mining pool's power reached a precarious 51 percent last week. Jeffrey Smith, CIO of the Ghash.IO, spoke with Bitcoin Magazine about the recent unrest in the mining community.
- Outside of bitcoin, Vox put together a list of five things you should know about bitcoin's competitors, namely altcoins.
Bitcoin in 2014
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The history of bitcoin's price
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A note on our data: We use CoinDesk's Bitcoin Price Index to obtain both a historical and current reflection of the Bitcoin market. The BPI is an average of the three Bitcoin exchanges which meet their criteria: Bitstamp, BTC-e and Bitfinex. To see the criteria for inclusion or for price updates by the minute, visit CoinDesk. Since the market never closes, the "closing price" as noted in the graphics is based on end of day Greenwich Mean Time (GMT) or British Summer Time (BST).
Photo from Pond5/Artist3d