In the aftermath of the Mt. Gox. debacle, the Mastercoin Foundation and Humint have proposed a plan that would see the creation of "Goxcoins" that "would be issued on a one-to-one basis to trusted and verified accounts". Goxcoins, as envisioned by this plan, would serve as a claim by whoever owns these coins to any bitcoins which might one day be recovered. (http://www.humint.is/goxcoin) While I applaud the authors of this idea for their attempt to find a way to recompense those people- myself included- who lost bitcoins at Mt.Gox, I CANNOT accept the proposed plan for two reasons.

My first objection concerns the proposal to issue these Goxcoins to only those people who were "fortunate" enough to have their identity verified prior to Mt.Gox's implosion. Such an idea, if adopted,  would set a dangerous precedent which would ultimately undermine the entire premise of bitcoin.  To say that only those who have given up their right to privacy may collect on a debt owed to them is preposterous. If this idea is implemented then bitcoin may as well just roll over and die as it will become the very thing it was intended to combat. If only those who have a verifiable identity are included in this new world order of decentralized cryptographic currency then the whole reason for the technology to exist is pointless. This issue is an absolute non starter. No one should be punished for exercising their right to privacy.

My second objection to the Mastercoin Foundation/ Humint proposal involves the nature of these Goxcoins. As currently envisioned,  Goxcoins would constitute nothing more than a transferable claim to a percentage of any funds recovered.  The likelihood of any sizable recovery of bitcoins through bankruptcy or corporate rehabilitation proceedings is amazingly remote. In fact, the only thing I consider to be less likely is recovering those coins from whatever wallet they are now sitting in.  Given the astronomical odds against Mt. Gox customers ever recovering any significant portion of their coins,  I see the proposed Goxcoins as being nothing more than a bunch of outrageously priced lottery tickets. (If anyone can prove that my assessment of the likelihood of recovering the coins is wrong,  please show me otherwise.)

Let me be clear: My second objection concerns the nature of the proposed Goxcoins and NOT the general idea as presented by Mastercoin Foundation and Humint. In fact, I agree with the idea of creating a Goxcoin, that it should be distributed to account holders on a one-to-one basis, and that they should be tradable on an exchange. However,  Goxcoins must offer some real value to those who possess them, something more than a longshot chance at maybe someday recovering a fraction of one's investment.  


Since the assets of Mt. Gox are insufficient to cover any reasonable amount of the value of it's debts; and
Since ordinary legal actions are unlikely to result in a solution equitable to Mt.Gox's customers;  and
Since recovery of the missing bitcoin is completely unpredictable and uncertain; and
Since the only real value remaining in the corporation known as Mt. Gox is it's potential to generate revenue through an online cryptocurrency exchange, I propose the following:

Remodel the corporate structure using the Five Parties Model proposed by Ken Griffith. (http://bitcoinmagazine.com/10639/five-parties-model/) Institute a robust public auditing system for all cryptocurrency wallets and accounts. Mandate that all corporate expenses (wages, advertisement, equipment, utilities, etc.) be paid in cryptocurrencies to the fullest extent possible. Where traditional payment methods are necessary,  cryptocurrency destined for conversion to fiat currency must remain publicly visible up to the time of it's conversion and the quantity and conversion rate must be made public.  Crypto to fiat conversions should be tightly regulated by company policy with regards to the frequency, timing, and location of such conversions. Create a new asset called Goxcoin (GXC) and issue these to all Mt. Gox account holders on a one-to-one basis according to the last known bitcoin balance of each customer.  Ownership of GXC will provide at least two benefits.  The first benefit will be a percentage of the trade fees generated by the exchange as well as a claim on any stolen bitcoin recovered in the future. The second benefit will be voting privileges in corporate officer elections,  company policy, etc. An additional quantity of Goxcoin,  possibly with different attending benefits should also be issued and made publicly available as a way to attract the operating capital necessary to implement the new corporate structure and get the servers running again. Open the exchange for GXC/BTC and GXC/LTC trading. Establish a solid relationship with a willing banking partner able to handle the volume of fiat transactions this type of business generates. Comply with all national and international AML and KYC laws for any customer accounts seeking to deposit or withdraw fiat. Establish a sensible, swift, and secure means for processing customer verification requests.

I will stop here and let you the people debate these things.

Edit: It seems that a similar initiative is under way at http://projectgox.com.