The main Bitcoin exchange, Mt. Gox, is still down after an epic hack that drove the currency’s price below a penny. You can now file a request to recover your account, Mt. Gox says, but they’re still working to repair the security breach that allowed a hacker to break in to their database via a third party who had access to it. But competing exchange TradeHill is back up, and there the currency has resumed its bumpy movements after having flatlined since Sunday. The currency is trading at about $14 right now.
How deep does this Bitcoin rabbit hole go? The virtual currency is looking less and less like videogame money and more and more like real world money. The BTC exchange Mt. Gox shut down over the weekend after a miniature version of Wall Street’s famous “flash crash,” in which high-frequency trading caused the Dow to drop 600 points. The BTC crash was caused by a massive sell-off that sent its value spiraling down to $.01 and then, somehow, into the negative, within minutes.
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.