Hey all,

Posted just a few hours ago at The Hub. Jaws dropped when we received this for publication.

Article here: http://hub.playerauctions.com/bitcoin-mtgox-ryanstraus/

Content:
The Mt. Gox situation is troublesome for the bitcoin industry as it exists today. However, the situation presents a bigger problem for the bitcoin industry than it does for bitcoin itself.  After all, this story is not about the squandering of trust by one party or the need to restore the community’s trust in other parties.  Rather, this story is about the continued bastardization of Bitcoin through the injection of the question of trust into a protocol that was designed to function without it.

Bitcoin was designed as a reaction to the inherent weakness in the “trust-based model” and was proposed as a purely peer-to-peer version of electronic cash to allow online payments to be sent directly from one party to another without a trusted third party.  In sum, the object was to dispense with the need for trust by designing a payment system based on cryptographic proof instead.

However, the joint statement issued by “industry leaders” seems to suggest a reversion to the trust-based system by noting the “hundreds of trustworthy and responsible companies involved in bitcoin” and suggesting that the “tragic violation of the trust of users of Mt. Gox” could be cured by an effort “to re-establish the trust squandered by the failings of Mt. Gox.”

It does not appear that the “tragic violation” was entirely the result of a single company’s actions but, rather, was the result of the industry’s apparent lack of commitment to the core mission of bitcoin: to replace trust with cryptographic proof.  Instead of attempting “to re-establish the trust squandered by the failings of Mt. Gox,” perhaps the “responsible companies involved in bitcoin” should work together to build companies that don’t rely on trust at all.