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Topic: Crowd-fund MtGox, a framework, request for comments (Read 907 times)

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I have been expecting someone to post an idea of crowd-funding MtGox, and there is one. See:
http://www.reddit.com/r/Bitcoin/comments/1z590j/a_discussion_on_how_to_salvage_mtgox_customer/

The picture said much and I thank its author (presumably coastermonger). There is one flaws and something missing.

The flaw: it entitles MtGox as a non-profit after the event. Most intended to profit by becoming MtGox customer, without profit, customers would wish to withdraw as soon as the assets reache the old value, this way it may never did, because once it did too much stakes will be drained out/ And in this setting, no one wants to plan beyond "repay all debt" stage, defeating the purpose of a non-profit. You see, 'non-profit' defined what new MtGox is not, but failed to define what it is. It's like saying "my life goal is not money but I don't know what it is". "Community-driven" or "community-owned", or "co-op" are better names.

The missing part: it focuses on the method getting the money back. If MtGox can be made community-owned, it means something bigger than dun for debts. And an organization framework to carry out the necessary steps was not mentioned. Typical complaint: why do I trust you to do this?  Companies are made of people, need organization/people to execute the plan.

I did the following draft framework. Take it as an idea, comment and develop it. Karpeles has been silent, some facts are missing. Edit: now they file bankrupt and we know a bit more. Some say don't do planning before we know all facts. But this way you are always one-step behind Karpeles: he acts, we receive action. The disadvantage of lacking a plan, is that the customers have demands but not control over the situation, the decision is still made by Karpeles and other investors Edit: now liquidator, all of them outside of the comunity. Besides, plan-ahead gives time to chew it.


Outline:

Each of the outline items are further explained later. What is already mentioned on the sketch are not repeated (e.g. customers can opt-out with a percentage of stuck fund). This plan assumes Karpeles' cooperation is secured.

  • Customers agree to convert credits to shares. The company is redefined a community co-op, by/of/for the community.
  • All customers vote for a team of supervisors. The supervisors appoint a CEO.
  • Transparency is achieved by: 1) if information can be made directly accessable, it should. 2) Otherwise, all information are accessible to the supervisors who are then inquired by the community. 3) regular audit by 3rd party.
  • Cost reduction and business development will be aided by distributed teams around the world.



On management and transparency

The community and customers demand transparency. This can be achieved by voting a team of supervisors, tasked to supervise the operation. Presumably, in order to get voted as a supervisor, one has to have existing reputation of honesty, responsibility and knowledge of bitcoin. CEO however have a different set of requirements, not only reliable but also having technology development and business skills. It is the responsibility for the supervisors to exam and appoint a CEO to execute the plans, so that a new CEO would not be the "Wizard of Oz" as Karpeles.

Since we urgently need a team to do the audit of existing record, exam existing situation, a short-term general manager can be appointed by the supervisor to conduct the process, before a formal CEO assignment.

Transparency can be done in layers, like existing public companies. Furthermore the most important and sensative information should be made available online directly. Supervisors works tightly with the team, they are burdened with monitoring the operation and can access all information.

All these management framework must be detailed in a charter

On cost reduction and business development

The new business has to be a global one, using comunity power everywhere and having teams in inexpensive countries like India and China.

Beating Bitstamp/BTC-e will no longer be the goal. Business development can be achieved by helping people having easier access to bitcoin. MtGox should extend from exchange market operator to community service provider, providing ease of access to bitcoin in every means. e.g. co-operation with currency exchange booths to let customers convert their money to accessible bitcoin wallets, and get cash from Bitcoin ATMs available in many countries (e.g. Spain), competing with banks instead of exchange markets. Reducing fee and risk for bitcoin buyers who are not speculating the market, and thus opens a door for new customers. The distributed teams can also seek opportunity in other countries to survive new-coming regluation scrutiny.

Managing a network of teams from everywhere will be a huge challange, but it comes together with the challange of managing a global community co-op. You just have to face it.

On technology

The gap that MtGox is out of business must be as short as possible.

The next-generation trade engine being developed in MtGox should made opensource for community patches and white-hat helps - such help may be rewarded with a share of the new business. If it is close to production use, in-time help to make it mature should be rewarded higher, in order to close the gap.

Opensource the software and opensource (made transparent) the management has to be done together.

On risk management

As the first community co-op, the new business can start an alliance of bitcoin service providers, or form a certain unions, with emergency coin stash collected from members, to aid emergency cases and offer a method of garantee for the public - on the condition that the protected partners should operate with a certain level of transparency.

A seperate team / project be started to pursue lost coins.

On procedure

The first step is to start a website, and invite MtGox users to register. The website owner and building team must clearly state they are not self-appointed to manage the transition. Instead, they are merely providing a platform where demands are heard, and aid the process of voting for a supervisor team, who are trusted to proceed on.

If MtGox is found extremely short of coins, a sum of money should be borrowed from reliable sources, with reasonable interest rate, much of them used to acquire coins to balance the coin/fiat ratio for a healthy start of the new business.

P. S.

Typical reply I expect is "Do you honestly believe Karpeles did lost the coins, and not hiding them?"
I doubt everything Karpeles said. Still, if we have a plan, when we know the truth we are prepared. And a test of willingness of forming a community co-op offer some insights even if turns out not needed.

Another typical reply I expect is "In your eyes, does MtGox look worthy business to buy?" (or "take a business of -740BTC is stupid").
Answer: Customer's fund is there (on the book), they could end up getting nothing. Why not use the opportunity to build something.
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