Sunday, February 3, 2013

The Ghosts of Bitcoin's Past

As Bitcoin makes the transition from awkward caterpillar to beautiful butterfly, I believe it's important that we take a moment to reflect on the personalities that have contributed greatly to Bitcoin's colourful history. You could say that the existence of these individuals was always a positive sign, as they would never have been drawn to Bitcoin if it hadn't had any value. Unfortunately, scammers scammed, and con-artists conned, and their most susceptible prey were often those most willing to trust.

Ironically, some of the greatest Bitcoin projects and partnerships developed because intelligent, well-meaning individuals were willing to put their faith in people they had never met, yet it was this willingness to trust that so often led to the swindling and theft that devastated so many wallets.

Now then, let's jump in the Bitcoin time-machine, and take things back, waaaaaay back, to 2011, when some of the most notorious members of the community first made their appearance.


Bruce Wagner

In April of 2011, Bruce Wagner embarked on a mission to inform the world about Bitcoin. His primary medium of choice was a drawn-out awkward TV format that often spent an hour covering topics worthy of five-minutes discussion. His viewers were subjected to Skype interviews over Bruce's consistently unreliable Internet connection, often giving the audience the impression that his guests were calling in from other planets.

While ignoring and cutting off, if not verbally abusing his co-host, Manny Mena, Bruce struggled to comprehend the techno-babble emanating from the legitimately brilliant minds of the founding fathers of some of Bitcoin's most successful projects.

Though it first began as a painful-to-watch yet innocent attempt to contribute to the Bitcoin community, over time Bruce Wagner's show was discovered to be a facade covering up a shadier history. His insistence on holding a Bitcoin conference in Pattaya, Thailand, a notorious haven for child molesters, combined with the discovery of a previous charge of mortgage fraud, led to his eventual downfall. While he was frequently suspected of being tied to the MyBitcoin scam, it was never proven, not that additional proof was needed to secure his position in the annals of Bitcoin's history.

Never passing up an opportunity for comedy, a member of the community threw together this wonderfully edited version of the famous episode of The Bitcoin Show where Bruce apologized to his friends and family who had deposited their Bitcoins with MyBitcoin, based on his recommendations.

The last episode of the show "aired" on February 24th, 2012 and his blog was last updated on June 8th, 2012, though the ghost of Bruce Wagner continues to tweet on a regular basis.


Zhou Tong

In September of 2011, at the ripe-old age of 16, Zhou Tong launched Bitcoinica, Bitcoin's first successful leveraged-trading site. After eight months of flawless operation that made Zhou Tong and his business partners rather wealthy, the site fell victim, in May of 2012, to a theft of over 38,000 Bitcoins, leaving the site permanently crippled.

A subsequent theft of 40,000 Bitcoins occurred in July of 2012, though the kind-hearted thief returned the Bitcoins to the victims; Bitcoinica's creditors.

An article on Forbes speculated that, before fate struck a mighty blow to the heart of the Singaporean boy-genius, the site was raking in on the order of $50,000/month. 

Zhou Tong still describes himself as independently wealthy, likely due to the fortunate (for him) fact that he sold Bitcoinica to the Bitcoin Consultancy / Intersango before all of this went down. In the end, Zhou Tong was found to be an innocent bystander as the walls of his vision crumbled around him, and he has since sworn himself off of Bitcoin, continuing to pursue other projects for the betterment of society.


Pirateat40

And we finish the story of our three ghosts with the most notorious of them all; a Pirate, at 40. Promising endless returns to those who had the fortitude to invest with him, he managed to lure in a large percentage of those looking to invest their Bitcoins. 

Though the 7% weekly returns that were promised by the "Bitcoin Savings & Trust" were obviously outrageous and unsustainable to anyone looking in from the outside, he managed to keep the ponzi scheme going long enough to convince even the skeptics that perhaps there was a method to his madness. 

By the time the curtain fell, a good portion of the funds listed on the Global Bitcoin Stock Exchange were deriving their returns from investments in the Pirate's bank. When all was said and done, an estimated 500,000 Bitcoins ($10,000,000 USD at current exchange rates) were missing. The Pirate has yet to be found, but you can rest assured that the hunt continues to locate the man behind the largest theft in Bitcoin history.

One thing is certain, from these events and encounters, the Bitcoin community has grown smarter, and a little more street-savvy; or at least one would hope. Is there another ghost lurking among us, ready to float off into the pages of Bitcoin history wearing sheets stained with the blood of a thousand days destroyed? Perhaps, but at least for the moment, we sleep, soundly.

8 comments:

  1. And then there is the occasional Zombie - like Matthew N Wright...

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  2. Associating Bruce Wagner with child molestation is unfounded and irresponsible.

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    Replies
    1. Unfounded?

      http://forums.somethingawful.com/showthread.php?noseen=0&threadid=3413928&pagenumber=442#post394978815

      Delete
    2. Please stop associating bitcoin with child molesting. You should delete this post. Unprofessional.

      Delete
  3. I disagree. I think that scandal is a legitimate part of the Brice Wagner story, and I think GW did a good job of not making it the focus of that entire section. Good article.

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  4. This comment has been removed by a blog administrator.

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  5. Doesn't Nefario deserve a spot on this list?

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