Flexcoin, which billed itself as a “Bitcoin bank,” has shut down after the theft of 896 Bitcoins, which were worth roughly $US622,000.
This is just one more instance of a Bitcoin company having to shutter its doors in recent weeks.
Mt. Gox was certainly the loudest to go, even seeing protests in front of its Japan headquarters.
But a string of Bitcoin-related companies closing up shop doesn’t mean Bitcoin is dead.
Brett Stapper is co-founder of Falcon Global Capital, a Bitcoin investment fund that’s currently offering to buy the Bitcoins seized by the FBI during the Silk Road shutdown. He gave us his take on why so many Bitcoin companies have said goodbye lately — he blames “poor business management.”
He also says these Bitcoin exchanges are volatile because they were first to market and not necessarily the best way to manage your Bitcoins.
Here’s his analogy:
Imagine if Gmail were to close down. Would we say, “The end of email has arrived”? Of course not.
People are mixing up a private company with an entire industry. Mt. Gox for example, began as a platform for trading Magic: The Gathering cards, [and] a few short years later they are holding hundreds of millions of dollars in customers’ money and became the number one [Bitcoin] exchange. Did they become the number one exchange because they were the best? No, [it’s] because they were the first.
This is a common trend when it comes to new innovations. The weak, poorly managed companies that reached the top will go down and the properly managed companies will battle each other for the number one position. So while it’s tragic this is occurring and so many people lost money with them, it is also important to note this is a key time for Bitcoin and other cryptocurrencies where the consumer stands to win when the exchanges begin to compete with one another.
Now that Bitcoin is much more an object of public consciousness, future Bitcoin companies will be able to learn from others’ past mistakes and concern themselves with customer service.
There is no yet word if the FBI has accepted Falcon Global Capital’s offer to buy its seized Bitcoins.