Gavin Andresen, technical lead for the Bitcoin project, speaking in New York on Saturday.

Bitcoin, the sophisticated three-year old digital currency that recently spread from hackers and programmers to a less-technical set, continues to fascinate.

Bitcoin enthusiasts headed to New York this weekend for the first Bitcoin World Conference and Expo in east Midtown, an event comprised of networking; workshops on mining and coding; showcasing of Bitcoin start-ups; announcements of future Bitcoin conferences in Thailand, Amsterdam as well as a Bitcoin cruise in 2013; meals at restaurants that accept Bitcoin; and talks by e-currency luminaries including Gavin Andresen, the technical lead for the Bitcoin project.

About 75 people, all but a handful of them male, gathered this weekend in east Midtown at the Roosevelt Hotel and at the studios of OnlyOneTV, which produces the web show The Bitcoin Show and organized the conference.

Attendees included representatives from Mt. Gox, the largest exchange which is based in Japan; TradeHill, the second-largest exchange; CampBX, a Georgia-based exchange, who lost their luggage on the flight; along with a host of other Bitcoin businesses. About a third of the audience were miners; about a fourth said they'd heard of Bitcoin before it was cool since November. Attendees wondered if the mysterious Satoshi Nakamoto, the purported and potentially pseudonymous inventor of Bitcoin who last contacted Mr. Andresen by email in April, was among them.

Mr. Andresen, the keynote speaker, talked about the need for volunteers on the Bitcoin project, especially a quality assurance manager, which would be a paid position. He said he hopes that in five years, Bitcoin "will be boring." As in, no calls from reporters, no hype and no drama. Just a niche currency with a robust community--possibly administered facilitated by institutions as mainstream as Bank of America.

Highly-active Bitcoin developer Jeff Garzik spoke next on "The State of the Coin," emphasizing that the economy is still very, very young--about $81 million USD--and that it's a "start-up currency" that could still fail, but the fundamentals of the Bitcoin economy are strong. He also spoke about the need for a Bitcoin public relations effort, as the complicated e-currency has occasionally been mangled in translation. "I predict there will be a Bitcoin-specific law," he said. "Hopefully it's not banning."

Developer Stefan Thomas, who traveled from Switzerland, spoke next about using node.js to build Bitcoin applications.

The conference came after another eventful week in the land of Bitcoin, with Mt. Gox, the largest Bitcoin exchange, acquiring Bitomat.pl, the third-largest exchange which recently suffered a technical failure that resulted in the permanent erasure of roughly 17,000 Bitcoins, or more than $191,000 USD at this moment's price of $11.29. Mt. Gox will compensate Bitomat.pl users for their lost deposits in "an effort to restore confidence in the Bitcoin economy." Additionally, second-largest exchange TradeHill announced the purchase of the domain Bitcoin.com, where it plans to roll out an easy-to-use wallet service, tools for merchants that want to accept Bitcoin, as well as mobile apps.

In less happy news, some users are still out the Bitcoins they had stored at MyBitcoin.com prior to an incident the site is calling a cyber attack but many speculate was a heist. MyBitcoin announced it would be refunding 49 percent of user deposits, but some say they have yet to receive their refunds. (This reporter got hers right away.)

But the biggest news in Bitcoin world is the deluge of Bitcoin start-ups filling in every gap in the nascent economy. BitInstant, a New York-based start-up that provides credit on the spot in order to speed up Bitcoin transactions, is launching this week. At the conference, Betabeat met a representative from Bitspend.eu, a payment processor for merchants that plans to launch integration with Western Union soon.

The official conference t-shirt, "I AM SATOSHI," was immensely popular. Organizers were kind enough to give Betabeat a small.

UPDATE: Full list of Bitcoin start-ups that were there as vendors:

• Paul from CryptoAnarchy.us & hampdenwireless.com
• CampBX
• BitcoinsolutionsLLC.com
• bit-pay.com
• BTCinch.com
• Andrew Lee of Mt. Gox
• ExchB.com
• Flexcoin.com
• Zareason.com
• Fastscanning.com
• Bitbar.co

Many other start-ups were in attendance, including the popular bitcoin-otc.com, however Betabeat did not meet them all and hesitates to attempt to compile a comprehensive list.

Energy has flagged in the hunt for the people behind MyBitcoin.com, the popular e-wallet service that disappeared with, according to them, 154,406 Bitcoins back in early August. After days of silence, a spokesman emerged for the site and a claims process was initiated to refund users 49 percent of their deposits, which in today's prices shakes out to $861,755.

But that still leaves 78,747 BTC ($896,929 USD at today's prices), which MyBitcoin's spokesman says were taken by hackers, unaccounted for.

The community effort to find the people responsible for MyBitcoin--or the hackers who broke into it, if that explanation is true--seems to have lost verve due to the pacifying effect of MyBitcoin's 49 percent refund, which many users reported receiving quickly (although there are some who say they have not gotten it yet) and the lack of actionable information. The spokesman for MyBitcoin, "Tom Williams," has been missing in action since about two weeks ago when he appeared in the #bitcoin-police IRC channel.

#Bitcoin-police was a fast-moving information hub at the time of the MyBitcoin incident, but has been dead of late. "Police is quiet because there's no new info coming in. The internet side seems to have been 'mined out,'" a user told Betabeat, referring to the detective work--looking up hosting providers, examining server set-ups, hunting for personal information on the people suspected of being involved--performed by members of the community. "Now it remains for someone who lost enough BTC to spend effort to actually file a report with real actual authorities," he said.

Vocal Bitcoin evangelist Bruce Wagner, who lost 25,000 BTC in the incident, is a likely candidate. He's told Bitcoiners to file complaints with the FBI in the past, as he believes there was foul play involved, but could not confirm whether there is an active investigation. "They stole (denied access) to EVERYONE's money," Mr. Wagner said over Gchat. "They later--after MUCH COMMUNITY INVESTIGATION AND FBI INVOLVEMENT --- suddenly re-appeared. NO ONE who understands ANYTHING about bitcoin believes their lies about ... being hacked."

Mr. Wagner plans to produce four episodes of his Bitcoin web show today where he will talk about MyBitcoin.

In other BTC news, the exchange Mt. Gox took over Bitomat.pl, an exchange that lost 17,000 BTC in what the owner is claiming was a technical mistake, combining the users of the first-largest and third-largest Bitcoin exchanges to solidify Mt. Gox's position as the dominant exchange.

People are flying in from all over the world to attend, Mr. Wagner says, including keynote speaker Gavin Andresen from the Bitcoin Project; Jed McCaleb, founder of MtGox, the founders of TradeHill.com and other Bitcoin start-ups. The agenda includes meals at Bitcoin-friendly eateries, breakout sessions on mining, trading and merchant solutions, as well as time set aside for networking.

"All the biggest names in the world of Bitcoin are going to be here," the conference site says. "People have announced that they are flying in from China.... from Europe... from South America... even chartering private jets to get them here."

Some members of the Bitcoin community suspect foul play (more about that later). But as promised, there is now a claims form for users who lost Bitcoins in the debacle: "Claims are manually reviewed and will be processed within 48 hours of being filed. This claim form will remain online for 30 days."

And as of Saturday night, the historically-reticent MyBitcoin has a voice: "Tom Williams," who stepped forward to field questions from the Bitcoin community via the #bitcoin-police channel on IRC, where he verified his association with the site by moving Bitcoins from the MyBitoin IP to a pre-specified address and providing the same encrypted signature that was used to sign the official statements posted on MyBitcoin.

After passing muster with the tech-savvy denizens of #bitcoin-police, a loosely-organized group of Bitcoin enthusiasts who investigate various issues in the Bitcoin community, Mr. Williams got down to tacks. "Listen: what did you think we did after the hack happened? We got shitfaced for many days. What would you do? Fuck."

MyBitcoin had half its deposits in "cold storage," he said, so it will be refunding all users 49 percent of their deposits. But he advised patience. "Cleaning up the mess takes time," he said. "We can't just start transmitting coins all over the bloody place."

MyBitcoin claims to have had 230,073 154,406 Bitcoins in its coffers at the time of the incident, which at the time translated to more than $2 million USD. The price has fluctuated considerably since then due to several high-profile incidents. At today's, or rather, this moment's prices, MyBitcoin's deposits would equate to $1.18 million USD.

MyBitcoin built its reputation by providing a free, user-friendly service targeted at newbie Bitcoin buyers. It collected scores of users, including Bitcoin evangelist and host of The Bitcoin Show Bruce Wagner, who says he had 25,000 Bitcoins--$192,500 at today's price of $7.70, but worth more than $250,000 at the time of MyBitcoin's disappearance. Mr. Wagner was also in the habit of recommending the service, especially to new users of Bitcoin. Betabeat also used the service to buy a few Bitcoins from a restaurant for the newsroom (and promptly lost all our co-workers' money).

MyBitcoin was simply the easiest and best-designed option available--and that's what has some Bitcoin users suspicious that perhaps the "hack" was an inside job. Mr. Wagner has spoken to the FBI's cyber crimes unit, which took enough interest in the case to give him a call back. He says the FBI has requested that affected users who suspect a crime report the incident online.

The counter-theory, as related by some users in the Bitcoin community--who are careful to hedge every word to avoid libel, retaliation and the chance that any action might discourage MyBitcoin's operators from refunding any Bitcoins at all--is that MyBitcoin was an elaborate hoax, designed to lure users into a false sense of security and then make off with their Bitcoins at just the right time.

Through the emerging science of Bitcoin forensics, some leads point to hacker aliases out of Canada. But clues are far from a smoking gun. For example, the #bitcoin-police hivemind concluded that the hacker collective Hack Canada registered its domain via PrivacyShark, the anonymized domain registrar that also registered MyBitcoin.com, among a long list of other domains including bitcoinreserve.com (empty), bitcoinia.com (expired), and pussyjuicegirls.com (active), which led them to name Edmonton programmer Dalin Owen as a person of interest along with five IRC handles and the owner of digital currency exchange nanaimogold.com.

"Dalin Owen is the one name that is linked to everything, and ppl have independently named him as the guy behind mbc," one Bitcoin user told Betabeat in a private message, but--"there is no hard proof yet." Dalinowen.com has been wiped and replaced with the message, "Yes, we sold a domain name to mybitcoin, but we have nothing to do with its operation. I also referred them to Morningstar Holdings as a professional courtesy as their corporate filing services have worked well for us in the past. All of the threats of bodily harm are being sent to the local authorities. I will not respond to any more threats or intimidation."

"Many of us think Tom Williams is TheMadhatter who used to sell prepaid credit cards bought in Canada," another said. Mr. Owen may well be TheMadhatter, he added.

On IRC, Mr. Williams denied that he was TheMadhatter or Dalin Owen. He also denied Betabeat an interview. "I'm not interested in the press. No offense implied," he said. HackCanada has not responded to an email inquiry.

The Bitcoin community has done some impressive sleuthing on the MyBitcoin incident. But whether collaborative auditing can keep Bitcoin crime in check is hard to say. Now that MyBitcoin is offering restitution, Bitcoiners are less vocal about their accusations. There also hasn't been much progress on another open investigation: the Polish Bitcoin exchange that shut down around the same time as MyBitcoin, claiming to have accidentally deleted users' 17,000 Bitcoins and declaring itself up for sale for that amount before resuming trading shortly thereafter.

We're not exactly sure what constitutes receivership in a system with no central authority, or why the site's anonymous operators would feel obligated to refund its anonymous users given the utter lack of accountability. Before the statement hit, word on the street was that MyBitcoin.com, the user-friendly Bitcoin wallet that was the go-to for most Bitcoin newbies, was an elaborate ploy set up by a group of (Canadian?) hackers who swindled naive Bitcoin users for the money and the lulz. At the time it went down, MyBitcoin.com had more deposits than the third largest Bitcoin exchange, Bitomat.pl. Bitomat.pl had 17,000 BTC on hand when it went down this weekend due to human technical error. But just one Bitcoin user, the vocal Bruce Wagner, had 25,000 BTC stored at MyBitcoin when it disappeared. Betabeat had 6 BTC there, and we're surely not the only ones. At today's prices, MyBitcoin had more than $250,000 in its coffers.

Mr. Wagner, one of Bitcoin's most vocal advocates on Twitter and via the Bitcoin People Google group and The Bitcoin Show, had been encouraging others to use the service because it was the simplest Bitcoin wallet available. But he had started voicing suspicions about the service after reports from some users that their Bitcoins stored at MyBitcoin were going missing. Not long after, MyBitcoin vanished, provoking speculation that some dodgy characters were running the show and decided to cut and run before Mr. Wagner told his devotees to pull their BTC out of MyBitcoin.

The question of whether MyBitcoin's disappearance was evidence of foul play became a test of the Bitcoin hivemind. Volunteers started crowdsourcing information in the freenode #bitcoin-police IRC channel and compiling a dossier. Mr. Wagner was encouraging people to report the case to the FBI via the agency's online complaint form (not holding our breath).

MyBitcoin is based out of the popular off-shore banking hub of St. Kitts and Nevis, but vigilantes have fingered a group of Canadian hackers and the handles 'dalin,' 'nanaimogold,' and "themadhatter" have been identified as entities of interest by members of the Bitcoin community who are collaborating via IRC and other methods to get to the bottom of the story. The group has not responded to an interview request as of yet.

While operators of other Bitcoin services frequently appear on camera and do interviews with journalists, Mr. Williams offers no contact information or evidence of his existence:

On Friday of last week we noticed that one of our pooled holding servers was missing a large amount of Bitcoins. After a prompt investigation we realized that the security of our SCI (Shopping Cart Interface) system had been breached by an unknown attacker.

Our response was rash, but necessary. We simply switched the system off until we could have system-wide forensics performed. The forensics took some time, as the system is quite complex by nature.

After weighing all of our options, we have realized that we have no option but to go into receivership. We will settle all accounts with a online claim process that we are currently in the process of working out.

We will release more detailed information about the security breach, the claim process, and our balance sheet in the next few days.

There are also more than 1,600 people named "Tom Williams" on LinkedIn.

Meanwhile, the Bitcoin Police also harbor suspicions about Bitomat.pl--but there isn't as much information available about the Polish exchange.

Clarifications: This post has been updated to reflect the concerns of some members in the Bitcoin community, who make the good point that hard facts are hard to come by in Bitcoin world and it's best to hedge one's words.

BTC sign at Meze Grill in Hell's Kitchen.

Meze Grill, a tasty Mediterranean lunch spot on 8th Ave. and 55th St. in Midtown, was the first Manhattan restaurant to blaze the Bitcoin trail; since then, others have followed suit. The latest is Hudson Eatery, at 601 W. 57th. Beware, their website autoplays trance music.

The reason there are two restaurants accepting Bitcoin so close together is The Bitcoin Show host and general Bitcoin evangelist Bruce Wager, who also sells Bitcoin himself, no fee.

Yesterday, Betabeat potentially flushed $89.04 down the toilet by purchasing 6 Bitcoins at Meze Grill, which has started selling them alongside salads and smoothies:

• One was for this reporter
• One for Nitasha Tiku
• One for Ben Popper, who wanted more but "needs to stay liquid" in the event of a cyberattack inspired by his recent article on the term "hacking"
• One for The New York Observer editor Aaron Gell. ("What is it again?")
• Two for my little brother.

We asked the cashier if they were getting a lot of Bitcoin action. "Yeah!" he said. "There were like 14 people today."  He pointed at the "We accept Bitcoin" sign and QR code and noted that it was covering up the display copies of the book Clean Plates.

Meze Grill, a Mediterranean restaurant near Columbus Circle, was one of the first known brick-and-mortar establishments to accept Bitcoin due to evangelism by neighbor and Bitcoin enthusiast Bruce Wagner. Now the restaurant is going further down the Bitcoin rabbit hole by operating as a small-scale exchange. Hey, accepting Bitcoin already got the place on international television and into the pages of Daily Intel--adding the cryptocurrency to the actual menu only seems logical. Come in with cash; walk out with Bitcoin! Just don't go at lunch hour.

Meze Grill is charging a six percent fee and customers need to email ahead to make an appointment and submit your Bitcoin address. Then walk into the restaurant, hand over the money and the coins will be transferred to your account. Bitcoin is trading around $14 USD today.

Downtown, Vitaly is reportedly the second restaurant in Manhattan to accept Bitcoin; we've also heard you can buy crepes with it in Dumbo. Word that Mr. Wagner is setting up a third Manhattan eatery with the digital currency tonight.

True to the spirit of Bitcoin (recall: digital cryptocurrency that touched off a gold rush among geeks-turned-investors and speculation as to whether it's the financial sector's turn to feel the disruptive might of the internet), the seller wanted to remain anonymous. Our questions were relayed to him by email via Mr. Wagner, who facilitated the trade's one-day turnaround.

"Actually, I have never had ANYONE that I know... be UNABLE to sell them all in one day," Mr. Wagner typed over Gchat. "I know one guy who wanted to sell Bitcoins.  He tweeted it on Twitter, and one guy drove down to NYC from Boston within 2 hours.... just to buy them with cash."

The seller described himself as a "medical doctor" and surprisingly, he's not a geek. He was able to unload his cache of coins in one day, all to the same person, found through BTCnearme.com. The quick sale isn't shocking; buying Bitcoins online can take weeks. The alternative is "mining," the process of creating your own Bitcoins, which can take months.

This is the third time the good doctor has sold BTC in bulk. He's going to do it again, he said.

How many Bitcoins (number of coins) are you trying to sell?

It was 480 Bitcoin. So that ended up being about $8,400 at $17.50 per Bitcoin.

When did you first hear about Bitcoin? What convinced you to acquire some?

I first heard about Bitcoin from a friend of mine around December of 2010. What convinced me to buy some was when I saw the first article in Forbes magazine about Bitcoin.

How did you acquire them?

I bought some from someone I met online. There is a very active Bitcoin forum online at Bitcoin.org.  And now there are even sites for finding local people to buy and sell from like BTCNearMe.com.

Why are you selling them now?

I have bought Bitcoin before, then sold them all, more than doubling my money. I sold them all to test out the system and make sure it really worked.

Then, right after selling them all, I bought more. Later, I sold them all again. I tripled my money again.

Do you know many other Bitcoin investors?

No. None. However, I have told many of my friends and they are now interested in investing in Bitcoin. I have referred many of them to the various educational sites about Bitcoin.

Did you meet the buyer like, at Starbucks with your laptop, or...?

Yes, since that time, I was able to connect with a young man who purchased all of my Bitcoins. I simply met him at a restaurant. He handed me an envelope of cash, and I transmitted the Bitcoins to his Bitcoin Address, using my iPhone's web browser and MyBitcoin.com. He verified that I had sent the Bitcoins to him by using his Android phone's web browser. It was so simple. It really is amazing.

Satoshi Nakamoto is the pseudonymous creator of Bitcoin. (Comic: Rasmus Rasmussen, Z1Xwitch ArtWork)

It was a tweet from a stranger that crystallized the concept of Bitcoin for Bruce Wagner. "I can explain the benefit of Bitcoin in four words," one of Mr. Wagner’s 12,000-some Twitter followers wrote. “Briefcases full of cash.”

At the time, briefcases full of pennies seemed more apt—one unit of the new virtual currency was then worth $0.06. Then, in one day, the price of a Bitcoin jumped to $0.22. Mr. Wagner, a former I.T. specialist who now produces and stars in his own web TV shows, became obsessed with the things. He sat at his computer, too excited to eat, reading the myriad white papers, trade blogs, technical analyses and forum discussions about Bitcoin. For five days, he hardly slept. He just kept thinking, This is amazing. This is going to change everything.

The last time he’d been this excited was when Windows came out. He got his hands on some Bitcoins and sold when the price doubled. It kept climbing. He invested more.

Bitcoin is Internet gold, a digital currency developed by a community of programmers in 2009 that represents the first plausible manifestation of an unregulated global “cryptocurrency” first imagined by anarchist computer hackers in the late 90’s. Bitcoins are snippets of code that use encryption to prevent counterfeiting and double-spending. Complex algorithms control the money supply, in theory replacing the need for banks or a central regulator. Right now Bitcoins can be generated—or "mined"—by running a program on a powerful computer. This task requires exponentially more time and processing power as the number of Bitcoins grows, and the absolute number of Bitcoins is capped at 21 million, mimicking the scarcity of gold. There are now 6,539,450 in circulation; $2 million worth were traded on the main Bitcoin exchange Mt. Gox on Friday.

The price of a Bitcoin climbed slowly but steadily until May, when Gawker and the tech blog Launch published two big stories about the phenomenon. Prices started zigzagging up, hitting a high of $33.11 last week after three weeks of increasingly frenzied trading, and then fell a spectacular 30 percent Friday morning, what the blogs dubbed "Digital Black Friday." As of now—3 p.m. Tuesday—a Bitcoin can be had for around $18.

As with gold, the number of things one can purchase with Bitcoin is limited. There are 64 listings on BitGigs.com, a recently launched job board for buyers and sellers who want to do business in Bitcoins, and a few dozen more on Bitcoinclassifieds.net. Some programmers in New York created an app for Android phones that allows users to trade Bitcoins on the spot. A few start-ups have listed on the Global Bitcoin Stock Exchange, an experimental market for bonds and private companies. There are websites that allow you to purchase ground coffee or alpaca socks with Bitcoin. Meze Grill on 55th Street and Eighth Avenue, "where authentic Mediterranean food meets modern flavor," accepts Bitcoin, as does the Fetish Fortress, a bondage dungeon in Chinatown.

Bitcoin appeals primarily to computer geeks, who love it for its technical elegance. It has also found fans among libertarians and populists, because it circumvents banks and governing authorities; digital natives, because it simplifies peer-to-peer payments; and law-breakers of various kinds, because transactions are untaxed and difficult to trace.

Most of the activity around Bitcoin right now is pure speculation, however, due to the violent price fluctuations and limited adoption by merchants. The Wall Street Journal’s SmartMoney blog trumpeted "The Currency That’s Up 200,000%." One German coder who frequents Bitcoin forums claims investors gave him $500,000 to build a data center to mine Bitcoins; a programmer posting on Reddit emptied his bank account and maxed out his credit cards in March to buy $10,000 worth of mining equipment. (“Within three months of finding Bitcoins,” he wrote, “it has completely consumed my entire life, all of my ‘money,’ and I am loving every minute of it.") One college student sustained permanent minor brain damage due to heatstroke after he dozed off in his room next to four computers furiously mining Bitcoins. "I wish I was joking," he said in a forum post that was reposted on the website BitcoinMiningAccidents.com. Rick Falkvinge, founder of the Swedish Pirate Party, declared he was putting all his savings into Bitcoin. [Web bonus! Check out this video of an exhaust system built for a Bitcoin mining rig.]

According to Larry White, an economics professor at George Mason University who specializes in monetary theory and banking, Bitcoin is essentially "a floating exchange rate against other currencies." He added with some amusement, "It does seem to have some purchasing power, or at least some expectation of having some purchasing power, and so it seems to have lifted itself by its own bootstraps into having a positive value."

Bitcoin enthusiasts believe the currency will rival the dollar, so the fact that the ultimate supply is fixed makes it a sure bet.

Dr. White isn’t so sure. The currency simply doesn’t offer enough advantages over traditional currencies to compel the average person to switch. "I’m having trouble figuring out the practical business case for it going mainstream," he said, "unless the U.S. dollar becomes much more unstable."

Sounds plausible to us!

Under that scenario, if Bitcoin were able to present a more stable alternative, the cryptocurrency would be "healthy competition for the dollar," Dr. White said, adding, "This is, by the way, the same thing I said about the Liberty Dollar."

The Liberty Dollar was a private currency minted in Idaho and used by at most a quarter million people between 2007 and 2009, during which time its value doubled in relation to silver. It came to an ignominious end when the federal government arrested its creator, among others, and declared the operation a federal crime. E-gold, a digital currency backed by real gold, met a similar fate when the U.S. Department of Justice charged its creators with money-laundering.

As for Bitcoin, Senator Chuck Schumer began agitating for a crackdown on the currency after it was used to buy various illegal drugs on the underground website Silk Road. A Bitcoin ban would be tough to enforce for the same reasons music piracy has been impossible to stamp out. But the government has enough tools at its disposal to prevent Bitcoin from becoming mainstream, Dr. White says.

There are also concerns about the currency's technical integrity due to a story spreading about one Bitcoin investor who says he lost almost half a million dollars' worth of Bitcoins to a hacker.

Mr. Wagner.

Like most nifty ideas that germinate in the tech world, the odds are against Bitcoin ever achieving widespread use. Nevertheless, there are plenty of believers. "It’s only going to take one rich Arab sheik to throw some pocket change at it," opined Mr. Wagner, who has become an unofficial Bitcoin spokesman after creating a Bitcoin-for-dummies website, Bitcoinme.com. He also hosts The Bitcoin Show, a web TV series on his network; organizes the monthly New York Bitcoin Users Meetup, which has 62 members; and is planning BitCon 2011, the first Bitcoin conference "and world expo," which will take place in New York in August.

He doesn’t give investment advice, he’s careful to say. But he’s bullish.

"It’s a bubble, but it’s an unbreakable bubble, one that is just going to keep growing and growing and growing," he said. He had predicted Bitcoins would be going for $10 each by the end of May; the price hit $9.999 on June 1. He now says it will hit $100 by the end of the month and $10,000 within one year. That nutty-sounding forecasting recalls dot-com bubble boy analyst Henry Blodget’s famous 1998 prediction that Amazon’s pre-split stock would double to $400, which happened less than a month later. (The call earned him a job at Merrill Lynch, but his public cheerleading of tech stocks eventually led to a $2 million fine for securities fraud.)

"It’s kind of like the early days of the dot-com," Mr. Wagner said. "People heard about this thing called the Internet and they didn’t know what it was, didn’t know what to do, so they bought every [stock] that ended in a dot-com and of course they all lost their shirts. This is kind of like this, but you actually can buy a piece of it, like the Internet but you can own a piece of it."

We asked him how many Bitcoins he owned.

"That’s like asking me my bank balance," Mr. Wagner replied. "People have to realize that Bitcoin is money and in America it’s not polite to ask people how much money they have."

By this point in our reporting, Betabeat wanted in. "Can I have one of your Bitcoins?" we pinged a hacker friend we knew had accumulated a nice pile, worth almost two grand at today’s prices. "Hell no. You should have asked me two weeks ago. I was giving them out," he typed back from a start-up office in San Francisco. "Current plan is to hold out until they are $100 a coin, then sell 20 percent. After that I’ll wait till it hits $1,000 a coin and sell another 70 percent."

"I could have been doing this many years ago, and I would have had a billion dollars!" Alex Spitzer, a Boston-based programmer told us with wry regret. He read about Bitcoin in 2009, but didn’t get into mining until recently.

Even so, Mr. Spitzer is mindful of the groupthink that pervades his industry. "The problem with the Internet is that it’s too easy to find people like you—like-minded, high-minded kind of nonsense. The more you read these sites and these forums, the more people will tell you that Bitcoin is, like, the best thing ever."

In fact, hardcore Bitcoin enthusiasts believe the currency could change the world for the better. In some parts of the world, it’s impossible for small businesses to take electronic payments, said Jered Kenna, one of the founders of TradeHill, which launched last week as the first competitor to Bitcoin exchange Mt. Gox. With Bitcoin, businesses can start taking online orders immediately, no bank account, no credit cards, no transaction fees required. Micropayments also become practical, he told Betabeat from the office in Chile where he and his co-founder, Adam Stradling, a New York expat, had been working nonstop through the weekend to keep the site up despite massive trade volumes in the wake of Digital Black Friday.

"I grew up a computer nerd and I looked at it from a technical aspect and I said, wow, this could actually work, but the general population just won’t see it," Mr. Kenna said. "I underestimated people. Then I saw it growing. I said, you know, I could help this, and I could make a lot of money at the same time."

But Bitcoin is an experiment, he said. "Don’t bet the house."

Comic by Rasmus Rasmussen, Z1Xwitch ArtWork)