Perhaps no Bitcoin story is more well-known to the mainstream — and most haunts Bitcoin evangelists — than the rise and fall of MtGox.
For about two years, Gox was the world’s largest Bitcoin exchange. Headquartered in Tokyo, the company at its height claimed it was processing $US3 billion-worth of Bitcoin, and was valued by some at $US1 billion dollars.
But cracks began forming in the Gox edifice just as Bitcoin demand began to surge: As early as Spring 2013, customers had begun complaining about delays in receiving transfers, and difficulties removing their fiat currency from their exchange’s wallets. A crackdown on Gox’s U.S. bank accounts that August further ratcheted up uncertainty about the fate of the exchange.
No one is still quite sure what happened to the missing Bitcoins — or how many are truly gone.
But for Daniel Mross, a Bitcoin software developer and the protagonist of the new documentary “The Rise and Rise of Bitcoin,” which premiered Wednesday at the Tribeca Film Festival, MtGox’s downfall was more tragic than malicious. And he put into perspective how much dominant they exchange could have been.
“I think MtGox had the potential of being a Google of Bitcoin, and to squander that is just really a shame,” Mross told BI in an interview Thursday. “It was the one,” he added.
The main problem, Mross said, was that CEO Mark Karpeles, 28, believed he was capable of taking on MtGox’s workload by himself. Karpeles took over the firm in 2011, and thanks to its seemingly sophisticated software and access — however short-lived — to American financial services, Gox’s popularity grew.
Gox’s payrolls failed to grow with it.
“He was the CEO, the CFO, he was the lead developer — there were only two other programmers at MtGox, and they were only doing front-end stuff — so he wrote all the software, installed all the servers, did all the infrastructure,” Mross said. “Just way too much, way in over his head.”
The filmmakers were given a tour of MtGox’s sterile, cubicle-less and seemingly windowless office, though Karpeles and chief marketing officer and fellow Frenchman Gonzague Gay-Bouchery come off as mostly upbeat, revealing no sign of the immense pressure their exchange is under.
That comes a bit later, when Karpeles gives a brief tour of his sparsely furnished apartment in downtown Tokyo, and tries and fails to play a one-handed version of “Fur Elise” on his electric keyboard.
“When we did talk to him when, we did finally get him on his own, then he opened up,” Mross said. “He was actually really friendly in a quiet kind of way, he seemed kind of a loner, had his personal life that he valued.”
“Definitely a quirky guy, a little bit off — in a good way, almost an endearing way,” Nicholas Mross, Dan’s brother and the film’s director added.
Daniel said Karpeles kept them waiting for hours at a time, causing their footage to be shot at night and rendering much of it unusable.
“That was definitely kind of an indicator of the bigger picture, how he dealt with things — ‘Oh, I’ll get to that whenever I’m ready to,’ ” Mross said.
Nicholas Mross said he tried to take a journalistic approach to Bitcoin’s booms and busts, though is mostly a celebration of the cryptocurrency and the culture that’s grown up around it.
Still, he does not omit the ultimate fate of another key protagonist, Charlie Shrem, who ran a U.S. exchange called BitInstant. Last fall, Shrem was indicted on money laundering charges. In fact, the film’s key strength is just how early it got in on the Bitcoin story: There’s a scene in which Shrem, only a few months after BitInstant’s launch, complains of how much he’s had to spend on lawyers.
“The first thought honestly was, ‘This is terrible,’ — we felt bad for the guy. But from a filmmaking perspective there’s the idea of our footage now becomes historic — this thing happened that we we captured at a time that can’t be recreated.”