Two-Bit Idiot: A Cautionary Tale

dunce two bit idiot bitcoin
Copyright 2009 Candie N.

My Dad always liked to compare life to poker, "you got to know when to hold 'em, know when to fold 'em," he would say.

Sure, maybe I'm thinking of Kenny Rogers.

Either way, the lesson is one everyone could benefit from learning.

In case you are already familiar with Two-Bit's recent episode, I believe it to be a symptom of a larger issue within the Bitcoin ecosystem.  This drama is barely surprising considering the long history of public high-stakes meltdowns that have been a part of the Bitcoin community for a long time.  Allow me to elaborate.

Two-Bit Idiot (Ryan Selkis) made a grave, and very public, mistake this weekend when he misplayed his hand in a gambit to force a change in leadership at The Bitcoin Foundation.  Demanding the resignations of Chairman Peter Vessenes and Executive Director Jon Matonis, Two-Bit threatened to release evidence demonstrating systematic neglect by two leaders.  Many criticized his egocentric style, or called Two-Bits ultimatum "extortion," but from the foundation there was nothing but silence on the subject.

You may remember Two-Bit as the blogger/writer who leaked the documents that exposed Mt. Gox's plan to defraud customers while the company recouped bitcoin it had lost.

"I believe Bitcoin has a moral imperative to succeed," Two-Bit replied to those who accused him of trying to manipulate prices during the Mt. Gox scandal, "and that things which harm the ecosystem hurt me financially."

As Mt. Gox filed bankruptcy, Two-Bit saw another threat to the ecosystem - the leadership of The Bitcoin Foundation.


The single declarative word at the beginning of Two-Bit's blog last Friday set the tone for the weekend.

According to Two-Bit:

Only a swift and thorough overhaul of the Foundation’s leadership can preserve Bitcoin’s image with regulators, legislators and the general public.
Peter Vessenes and Jon Matonis are not scapegoats.  They are not innocent bystanders.  And they are not ethically entitled to remain in their board seats through later this year.

He then states that unless the two resign in 72 hours, a full length article will be published exposing facts that show the leadership at the foundation complicit with the meltdown at Mt. Gox, among other conflicts of interest. I encourage you to read and consider his points, they are valid concerns and have been echoed here at CryptoCoinsNews.

Of course, there was no response from The Bitcoin Foundation, and Two-Bit eventually came clean that he was not prepared to publish the evidence he had.

I started a “war” on Friday that I never should have waged alone.  I did so recklessly, and now I’m eating humble pie.

Two-Bit Idiot conceded the battle, but maintains his stance, and has assured me that his article will come out "eventually."

The Larger "Problem"

This public drama is not unfamiliar to us Bitcoiners, who have been desensitized by the arrests of both legit and outlaw figures, more major "hacks" than anyone can count, and 50% price swings that depend on the phrasing of one Chinese official.  I believe this incessant drama to be merely a symptom of rapid growth of a decentralized economy.  The rapid expansion of Bitcoin endeavours coupled with the incredibly narrow segment of the population that is involved with Bitcoin has put a lot of people in positions they are not prepared to handle.

Basically, when the price of Bitcoin exploded last year, many "hobbyists" were suddenly starting careers.

Countless exchanges have been exposed as lacking adequate security, companies supplying specialized mining equipment have been crushed under demand, and most trading analysis is best summed up as, "Price moved, WTF?"  All around amateur hour.

It's not a bad thing entirely; one of the beautiful things about Bitcoin is that its economy does not depend on monolithic companies to homogenize products and people.  Also, as greater levels of venture capital move into Bitcoin we should see greater investment in organizational structure and all around professionalism.

I'm not insulting Two-Bit, because he isn't a "journalist" and has never claimed to be.  He is passionate, but miscalculated his leverage in the short-term.  However, he is a good example of how easy it can be to take a position for granted, and there is a lesson to learn from that.

Unfortunately, I don't think this is the last time we will have to learn this lesson as a community.

This article is protected by copyright laws and is owned by CCN Markets.

About the author

Jonas Borchgrevink
Jonas Borchgrevink

Founder of and Passionate about how technology can empower people to create a more just and sustainable world.

Do NOT follow this link or you will be banned from the site!