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The Bitcoin Bugle: Mark Karpelès Had a Dream

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And it wasn’t to transform a role-playing card exchange into the vanguard of a financial future without fiat currencies or central banks. That was incidental.

Or, rather, it was a means to an end, the end being a much more prosaic, conventional business: a coffee house that would help one lonely French fat kid in Tokyo make friends.

As Mt. Gox, once the pre-eminent exchange for buying and selling bitcoins, sank deeper into trouble late last year, a 28-year-old Frenchman in jeans and a T-shirt was busy focusing on coffees and pastries for a bitcoin cafe he planned to open in the same building where his company rented space….

One of the people said that for some of this time in early 2014, the CEO sat in his office watching anime or episodes of "Breaking Bad," and complained he was gaining weight. At a time when Mt. Gox needed to tightly seal its systems and find new banks, Mr. Karpelès concentrated on what to serve in the planned bitcoin cafe, consulting with French chefs and coffee experts, the person said. "He had more meetings about the bitcoin cafe than about getting banks or doing business," said the person.

Karpeles was planning to serve quiche and apple pies he'd made himself in the cafe, which would also showcase a point-of-sales system he had spent hours tinkering with, a former employee said. The cafe never opened.

Now that Mt. Gox has gone the route of Karpelès’ other business ventures, and with it presumably the café, we can turn to psychoanalyzing the young man full-time. And boy oh boy, is there a lot to analyze.

Interviews with people close to the exchange, as well as company documents and Mr. Karpelès's comments on blogs and social media, paint a picture of the Mt. Gox chief as a geek—fascinated with trading cards and anime—who fell into his central role in the burgeoning bitcoin world but was unable to cope with the ballooning size and importance of his company….

The challenges tested Mr. Karpelès's management skills. At Mt. Gox's peak, it had no more than 35 to 40 employees. Mr. Karpelès often micromanaged, preparing his own Federal Express packages or ordering bottles of water, according to a person close to Mt. Gox.

In June 2011, when customers of now-bankrupt bitcoin exchange Mt. Gox agitated for proof that the Tokyo-based firm was still solvent after a hacking attack, CEO Mark Karpeles turned to the comedy science fiction novel "The Hitchhikers Guide to the Galaxy"….

By moving 424,242 bitcoins, Karpeles, then 26, evoked the random number, 42, described as the "meaning of life" in Douglas Adams' sci-fi novel. "Don't come after me claiming we have no coins," Karpeles said, according to a transcript of that online discussion. "42 is the answer…."

Karpeles, who has said he is reluctant to appear in public because of safety concerns, relieves stress by driving around Tokyo at night in a Honda Civic he bought as a company car at Mt. Gox, people close to him said. He lives alone with his cat, Tibane, whose exploits he used to chronicle on now-deleted Flickr and YouTube accounts….

Shy and fearful of confrontation, the self-proclaimed "geek" felt comfortable in Japan, where he could also indulge his love of manga, video games and cosplay - a combination of "costume" and "play", where people dress as characters from Japanese anime, graphic manga novels and video games. Karpeles found solace in online communities, where he was known as "The Magical Tux", a reference to the penguin mascot of open-source operating system Linux.

Good stuff. But what kind of office-chair psychologists would we be without a long talk with his mother?

Recalling Karpeles' early days in Dijon in the Burgundy region of France, his mother said: "Difficult, never. Too conciliatory for a few things. Someone who is extremely nice and who has a tendency to let himself get taken for a ride by others. People who took advantage of him, who asked him to do their homework."

"He was a terrible student. Terrible. Most subjects didn't interest him. He took a Mensa test, passed it and was admitted into Mensa ... during his teenage years. Prodigies understand things straight away, but you don't learn without repetition, without exercises. But that he didn't understand," she said….

Slipping between calling her son Mark, and his family name of Robert, Anne recalled his difficult childhood….

"He didn't go to university. He failed badly in his second-last year of high school and decided to quit. I told him that if he was going to do that he should become a plumber, so he got an electrician's diploma. Then one day, I saw him walking around with a huge book, called "PHP". He told me he had become a doctor in PHP," a computer programming language….

As mother and son drifted apart, Karpeles married without telling her and only let her know she was a grandmother after his son was born.

"(Mark's) communication at a personal level is catastrophic. It's always been difficult to get him to speak. We tried to get him to be more extrovert... Sometimes I wonder whether it's not some kind of trauma linked to my mother. I had the same problem when I was younger."

But let us not dwell too deeply in the past: Bitcoin remains, incredibly, a thing—an intangible thing, to be sure, but one with enough thingy-ness to finance these strange bedfellows’ political campaigns, maybe.

The Federal Election Commission will review a request Wednesday to allow political campaigns to accept bitcoin donations in the 2014 midterm elections….

Contributions would be limited to $100….

Because bitcoin is treated as property rather than currency, donors could be confused about whether the FEC's donation limits apply. On top of that, its ever-fluctuating value could lead someone to donate a higher or lower dollar amount than they actually intended—including a possible limit violation if the dollar value goes up soon after a donation.

Tracing a Bitcoin Exchange’s Fall From the Top to Shutdown [WSJ]
At Mt. Gox bitcoin hub, ‘geek’ CEO sought both control and escape [Reuters]
Bitcoin boss Karpeles easily led, not dishonest: mother [Reuters]
FEC Will Consider Allowing Bitcoin Donations to Political Campaigns [National Journal]
Politician Ossian Smyth in Ireland Embrace Bitcoin [NewsBTC]