I had never heard of it before I saw a story about a man that was supposedly robbed of $500,000 of bitcoin!
Bitcoin, the decentralized virtual currency whose value has skyrocketed in recent weeks, faced a key test Monday as a veteran user reported that Bitcoins worth hundreds of thousands of dollars had been stolen from his computer.
Ars Technica was unable to independently verify the user's story, and he did not respond to our request for an interview. But whether the story is true or not, it highlights a major disadvantage of the currency's much-touted lack of intermediaries. Bypassing middlemen frees users from government meddling and bank fees. But it also deprives them of the benefits those intermediaries provide, including protection against theft and fraud.
As we reported last week, Bitcoin's key selling point is its clever peer-to-peer scheme for recording transactions. Rather than relying on a centralized database, the Bitcoin protocol allows any computer on the Internet to participate in the payment clearing process. At the end of each 10-minute round, one of the nodes is chosen at random to receive a payment for his contribution to the process. For this reason, participating in the clearing process is known as "mining" Bitcoins
Now seeing other stories:
Trojan goes after Bitcoins
Bitcoin - the digital currency that has lately become a point of contention between those that consider it a perfect way of handling payments online and those who said that its anonymous nature will be severely misused by criminals - has definitely caught the attention of said criminals.
Bitcoin: A guide to the future of currency
Bitcoin. You have undoubtedly seen this word as of late, but what is it? Where did it come from and why is it all the rage in the news right now? How does it work, why is it so complex to understand for the average person, and how is it that 1 BTC (shorthand for “bitcoin”) is currently worth considerably more than the USD and Euro? Why should anyone care about Bitcoin? Well, if the U.S. Government cares enough such that the Principal of Bitcoin, Gavin Andresen, was asked to give a presentation to the CIA about Bitcoin this week, then there is plenty of reason for care and concern.