When Karpeles admitted in February 2014 that he lost some, and also got robbed of a total of 450 million dollars, the resulting loss in confidence caused at least another one billion dollar to flee through the exit doors.
What went wrong?
One. Karpeles built something that looked like a WordPress site to manage half a billion dollars.
Two. Every attacker worth his salt was keeping his eyes on Mt.Gox in order to detect the slightest error in the setup to exploit it and to turn it into the most spectacular robbery of the century.
Three. Users, in contest of being dumb, dumber, dumbest, kept flocking to the largest single point of failure, ever built in the history of bitcoin.
Who is to blame?
Karpeles? No. He is not to blame. He probably did not know any better. It is the users who are to blame. You see. Karpeles could always have stolen the users’ money. That means that someone who successfully attacked Karpeles could also steal their money. With every new user and every new deposit, the likelihood that someone would manage to shake down Karpeles became larger and larger.
You can easily cause your own misery. If you, for example, believe what television tells you, you cause television to attract people who want to broadcast false messages, in order to mislead you. The larger the number of people who believe what television tells them, the more powerful the attack will be and the stronger the lies that television will eventually start broadcasting.
Every concentration of assets that can get stolen, represents the false belief that they are safe, and is therefore just an accident waiting to happen.
According to the theory of deception, if A is the truth and B is what you believe is the truth, it is the aggregate belief in the deceptive statement (B=A) that fuels the growth in the deception (B-A)².
The more users believed — and the stronger they believed — that Karpeles still had their money, the stronger the difference with the truth (he did not have their money) kept growing. Theory of deception predicted that at some point Karpeles could impossibly still have their money. It would have violated the laws of nature.
The same holds true for the money in your fiat bank accounts. The banks can impossibly still have your money. Furthermore, it is your own false belief that powers the difference between what you believe and the truth. The stronger you believe that your money is safe in the bank, the more impossible it becomes that this could ever be true.
The US dollar notes say: “In God we trust”. This belief is incomplete. The correct belief is: “In God we trust and in nothing else”. In the end, it is your disbelief of everything else that spares you from misery. Furthermore, dollars do not represent the belief in God but the belief that the United States government will refrain from engaging in quantitative easing.
Central points of failure represent the false beliefs of users, waiting to get punished for their unforgivable paganism.
You are allowed exactly one true belief. All other beliefs are false, and it is the strength itself of your false belief that will multiply the falsehoods that will backfire at you. In other words, you always create your own monsters. Karpeles did not create the Mt.Gox debacle. It is his users who did.