Bitcoin Buying Stays Strong Despite Bankruptcies and Topsy-Turvy Rates

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy

Future generations of Bitcoin billionaires may someday look back on 2014 with knowing smiles. Here was a year when thefts spread, exchanges collapsed, rates gyrated like a teenager’s moods. And yet the buying of bitcoins showed no signs of abating.

The past week was particularly extreme. The apparent suicide of an American business executive in Singapore was investigated for possible ties to her Bitcoin investments. A California man fingered as the currency’s mysterious inventor reacted to his sudden fame by asking that journalists buy him lunch. After finishing his meal at a sushi restaurant, he went on to deny any role whatsoever in Bitcoin.

Perhaps the most surprising development was that the virtual currency, despite wild fluctuations in value, continued to weather the mayhem. As the humans involved in the adventure looked increasingly vulnerable,Bitcoin looked comparatively solid, trading nearly 10 percent higher Saturday than a week before. Each bitcoin is worth more than $600 in recent trading.

“Bitcoin works really well,” said Matthew Green, a Johns Hopkins University cryptographer who is working to develop a different virtual currency. “All this craziness around Bitcoin isn’t around Bitcoin itself. It’s around the people.”

Bitcoin, first issued in 2009, has gradually gained acceptance as a digital currency that, unlike dollars or euros, can move through the global trade system with low fees, relative privacy and no regulation. That has helped it flourish among technology enthusiasts and libertarians, as well as on marketplaces for illicit drugs and weapons.

“It’s completely Wild West,” said Garth Bruen, a security fellow at the Digital Citizens Alliance, a Washington-based advocacy group that combats online crime. “There are a lot of people getting rich, and there are a lot of people stealing.”

Bitcoin enthusiasts like to point out that the currency has proved resistant to tampering. The total number in circulation can never go beyond a set amount, and each bitcoin is protected by a distinct cryptographic code. If that code is lost, as has sometimes happened, the bitcoin disappears forever.

But criminals have targeted the computers that store bitcoins in encrypted code, in depositories known as “hot wallets.” Over the past two weeks, it has become clear they have succeeded spectacularly in breaking those systems.

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SOURCE:   
The Washington Post

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