Bitcoin is a digital currency launched in 2009. With it, the founders are trying to create a decentralised currency system, independent of governments. New electronic coins are issued according to a predetermined algorithm and can never exceed 21 million units. Virtual money is not yet widespread, but the authorities are already showing interest in it.
The community cheered. Now the villain was trapped and could not cash out on the exchange, as platforms capable of handling such capital would have required identification.
While some were figuring out how to find out who was behind the wallet address, others began to notice something amiss. Their own transactions began to go through the same addresses that the fraudster was using. The truth was dire - the detectives were on a false trail from the start. The Bitcoins that left the SheepMarketplace wallet had long since been cashed out in small, ID-free batches on the specialist cryptocurrency exchange BTC-E. The weighty wallet, on the other hand, turned out to be just its operating address.
The thieves eventually got away, but thanks to the bitcoin system, they didn't have to run and change passports. Some of them may even live in the neighbourhood of the defrauded customers, which neither of them will ever know. Bitcoin's creator promised complete anonymity and reliability of transactions within the system. And for good or ill, it is a promise that the system delivers on.
It is as if bitcoin came from another world and made programmers become traders, housewives become treasure hunters, and economists urgently enrol in cryptography courses. Bitcoin is not backed by states, central banks, gold reserves, or at least paper printed on a black and white printer. The only thing behind it is demand; it is the only thing it is backed by. Bitcoin is just a set of characters derived from the solution of a problem. Information that you have money, but not money itself. It is an idea, a dream and a tool of speculation. The banks' nightmare is a financial instrument built on the power of processors, software and human trust of the participants in the system to each other. A model of economic theory yet to be invented. An object of religious worship for millions and, for hundreds of millions, a cause for doubt.
Bitcoin is just a set of symbols derived from the solution of a problem. Information that you have money, but not money itself.
Bitcoin can pay for almost anything, from a sandwich at Subway and a joint at the Silkroad drug market to a contract killing and a flight into space with Virgin. Even hired killers accept it. Bitcoin can't be counterfeited, but it's easy to steal. It can be mined and it can be bought. It makes you a millionaire one day and a pauper the next. Its anonymity attracts criminals and fascinates anarchists. The CIA, the Fed and the IMF are interested in it. It simply cannot be ignored, for over the past three years it has gone the way that gold has gone for seven thousand years.
The madness began with pizza. Starving, Laszlo did not bother to cook himself or go to the nearest pizzeria. He didn't even bother to pick up the phone or go to the delivery website. Instead, Laszlo went to a Bitcointalk forum dedicated to the new cryptocurrency, then known only to a small circle of computer geeks.
PIZZA FOR BITCOINS?
Laszlo: I'll pay 10,000 bitcoins for a couple of pizzas... Like two big pizzas, so I have some left over for tomorrow. I like to eat crumbs in the morning, so to speak. You can make your own pizza and bring it to my house or order it wherever you like. I just want the food to be delivered in exchange for bitcoins on the condition that I am spared having to order or cook it myself. You know, it's kind of like in a hotel when you order breakfast to your room - they just bring you food on a trolley and you're happy!
I like onions, peppers, sausages, mushrooms, tomatoes, pepperoni and the like. Standard fillers and no weird fish toppings or anything worse. I also like plain cheese pizza, which would be cheaper to make too.
If you're interested in the offer, we can make a deal!
Thank you, Laszlo.
Laszlo Hanich, a computer programmer from Jacksonville, Florida, had to wait three days before he received two pizzas from Papa John's. As promised, he wired 10,000 bitcoins to his benefactor and posted pictures of the snack as proof of the transaction.
The pizza was forgotten about for months, although Laszlo wrote that the offer remained open. It was forgotten until the bitcoin was traded on online marketplaces and its exchange rate began to rise little by little. Laszlo's 10,000 bitcoins suddenly gained real value.
Bitcoin was originally conceived as a means of payment, but in fact it is now more commonly used as an investment tool. Interest in the cryptocurrency from government institutions and large companies has grown significantly, so Citi expects bitcoin to become the world's reserve currency.
Bitcoin soared 6 percent to $47,862 today after days of decline.