Neither a Meltdown nor a Mortal Wound: The True Context of the MtGox Situation
By Hayden Gill
In the midst of headlines involving the notorious collapse of a financial exchange, allow me to pose a question (or rather, a series of questions). Would you entrust your money to an institution which has a long history as a target of bombings and terrorist attacks and where 38 died and 143 were seriously injured in one incident? Or a platform selected for additional assaults (later thwarted by the FBI) by al-Qaeda, and an exchange immobilized by Hurricane Sandy and the subsequent flooding of data centers in Lower Manhattan?
Would you freely deposit your savings to an exchange which has had six crashes, one of which was so severe it serves as a marker of the worst economic despair America has experienced in more than a century?
Would you, to conclude the point, surrender your capital and suspend your disbelief on behalf of a trading exchange in which there is an extensive record of collusion and criminality? Collusion and criminality climaxing in the biggest act of fraud – a $276 million scheme – in the annals of the securities industry?
Would you, in other words, invest a single dollar in a company listed on the New York Stock Exchange (the "Big Board"), home to IBM, Coca-Cola, AT&T, FedEx, General Electric and Twitter?
And yet, the enemies of Bitcoin continue to sow chaos by citing the closure of MtGox as proof of the death of all forms of digital currency. That assertion – that the end of Bitcoin is nigh – is both factually wrong and absurd.
But the idea itself – propaganda-disguised-as-economics – is invasive and noxious, a risk to the very individuals we need to reach. For context is the missing component to this discussion. It is this lack of context, in the case of the Big Board, which insulates the traders of fiat money from the lesser fallout (by degree and historical importance) of MtGox.
For, ensconced within a marble temple of capitalism, behind six massive Corinthian columns (draped by a giant American flag) and topped by symbolic statuary entitled Integrity Protecting the Works of Man – with these idols of Science, Agriculture, Mining, Industry and Invention standing athwart history – volatility pervades the trading floor, brightened by a curtain of glass and ornamental brass casings. In this setting, The Establishment is immune from scandal and beyond reproach.
I need not refer to paranoid theories or third-rate conspiracies to say there is institutionalized hatred – by members of the so-called mainstream media – against Bitcoin.
Liberal commentators such as Paul Krugman and conservative critics like Larry Kudlow regularly condemn Bitcoin. The Right Honorable Centenary Professor at the London School of Economics, who also serves as a Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, beside the radiant glow of his gold medallion from the Nobel Memorial Prize in Economic Sciences – in the seclusion of his digital domain, courtesy of the New York Times, Mister Krugman declares "Bitcoin Is Evil."
It is time for us to answer these foes, to correct their malicious accusations and add much-needed context to this discussion. Simply stated, silence is not an option and indifference (to this aggression) is not a luxury we can afford.
Adding Context to the Conversation: Making the Case for Bitcoin
By providing context to this conversation, by educating the public about the overall stability of alternative currencies, the world of fiat money appears as it should be: Shorn of all pretense and divorced from all articles of power – separated from a grand mahogany desk and a bank of microphones, in which oracular pronouncements now read like bureaucratic doublespeak – intellectually naked, and removed from the baroque fireplace and chandeliered Board Room of the Federal Reserve – the enemies of Bitcoin have nothing but paper, mountains of greenbacks and piles of pennies.
Our duty is to expose these enemies. When someone like Paul Krugman calls Bitcoin evil, and his allegations go unanswered, then our community suffers, the decency of the English language loses its own currency (to admonish, motivate, educate and inspire) and we sacrifice our own legitimacy with the public at large.
Consider the implications. Krugman uses a strong and condemnatory word which is the domain of tyranny, totalitarianism, fascism, concentration camps, the gulag, and the wholesale enslavement and murder of innocents. He takes a strongly negative word from our shared vocabulary of ethics to describe an alternative currency. And the supporters of Bitcoin, most of them, remain silent!
Again, context is everything. When extremists use extreme words to characterize us as extremists, irony abounds. Our responsibility, right now, is to reply – vigorously and eloquently – to this slander. For, when neo-McCarythism enters the rarefied world of economics, when we allow our enemies to categorize us as evil and we acquiesce before the bludgeons of barbarous rhetoric, we lose.
It is time for context, irrefutable in its truth and permanent in the record of history, to enter this battle. In this context, the only way for evil to triumph is for us to do nothing.