February 9, 2018

Russian scientists working at a top-secret nuclear warhead facility have been arrested for trying to use one of the supercomputers to mine bitcoins, BBC reports.

To obtain bitcoin, so-called miners "use special software to solve math problems and are issued a certain number of bitcoins in exchange," Bitcoinmining.com explains. But "not just any old PC will do," Chris Gayomali explained at The Week. "Dedicated bitcoin mining rigs with the sole purpose of crunching through algorithms can cost you up to $6,000 on eBay."

That might explain why the crafty scientists decided to use one of Russia's most powerful supercomputers, located at the highly-restricted Federal Nuclear Centre in western Russia. The computer has a capacity of one petaflop, which means it can do 1,000 trillion calculations in the span of a second.

There was only one problem in this grand plan: For security reasons, the supercomputer is never supposed to be connected to the internet — and when the scientists tried to do so, the security department was alerted. "As far as we are aware, a criminal case has been launched against them," reports Russian news service Mash. Jeva Lange

January 17, 2018

Bitcoin plunged by 25 percent to a six-week low early Wednesday due to growing fears of a regulatory crackdown in South Korea. The cryptocurrency briefly dropped below $10,000. Rival cryptocurrencies also plummeted, some by even greater percentages than bitcoin. South Korea has walked back a vow to ban sales of bitcoin, but the country's finance minister, Kim Dong-yeon, said "the shutdown of virtual currency exchanges is still one of the options" open to the government. Reports last week said South Korea was working on discouraging speculative cryptocurrency trading behind their meteoric rise this year. South Korea said it wouldn't make a move until it had time for "sufficient consultation and coordination of opinions." Harold Maass

January 2, 2018

As banks and mainstream investors embrace bitcoin, helping fuel the heady gains of the world's best-known cryptocurrency in 2017, some of its earliest adopters — criminals — have started banking elsewhere, Bloomberg reports. The problem for the criminal underground is that bitcoin's blockchain — or transaction history for each virtual coin — is traceable, allowing law enforcement and researchers to follow the crypto-money.

Europol, the European Union police force, warned three months ago that "other cryptocurrencies such as monero, ethereum, and Zcash are gaining popularity within the digital underground," with online extortionists and other cybercriminals apparently favoring monero, which quadrupled in value in the final months of 2017, Bloomberg says. (Bitcoin merely doubled in that time period.) These so-called privacy coins use encryption and other tools to obscure the sender and receiver in online transactions.

"As a community, we certainly don't advocate for monero's use by criminals," monero core developer Riccardo Spagni told Bloomberg. "At the same time if you have a decentralized currency, it's not like you can prevent someone from using it. I imagine that monero provides massive advantages for criminals over bitcoin, so they would use monero." You can read more about bitcoin's new legitimacy problem at Bloomberg. Peter Weber

December 11, 2017

On Sunday evening, the cryptocurrency bitcoin began publicly trading on the CBOE Futures Exchange, and bitcoin futures quickly shot up as much as 26 percent, triggering two temporary halts to calm the market. Bitcoin has been on a tear, with its value rising more than 1,600 percent this year alone, but before Sunday's launch of a futures exchange market, technical difficulty and other concerns had left many investors on the sidelines. The CBOE exchange and coming futures markets from CME Group and Nasdaq aim to make betting on the world's most famous cryptocurrency open to a wider pool of investors in a more regulated market.

The CBOE futures are only a sliver of the global bets on bitcoin, with contracts nominally worth $40 million trading on the exchange in its first eight hours while some $1.1 billion traded against the U.S. dollar, Bloomberg says, citing Cryptocompare.com data. There are about 16.73 million bitcoin in circulation, collectively worth more than $260 billion, and about 40 percent of those are owned by maybe 1,000 people, Bloomberg reports, giving those "whales" a lot of influence over the price of the cryptocurrency.

There are a lot of unanswered questions and issues about bitcoin going more mainstream, including taxes, volatility, transparency, energy use, and whether bitcoin is in bubble territory. Bitpay's Sonny Singh and Bloomberg's Cory Johnson discussed some of the issues over the weekend.

Right now, investors should probably expect a roller coaster. "It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures," Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia, told Bloomberg. Peter Weber

May 2, 2016

On Monday, Craig Wright released evidence purporting to prove that he is "Satoshi Nakamoto," the pseudonymous inventor of digital currency Bitcoin. Wright, an Australian computer scientist and entrepreneur, told BBC News and The Economist that he was coming forward reluctantly. "I have not done this because it is what I wanted," he told BBC News. "It's not because of my choice." Wired and Gizmodo claimed Wright was the Bitcoin founder in December, though there has been a history of mispointed fingers: A March 2014 report in Newsweek wrongly identified Dorian S. Nakamoto, a California physicist, as the Bitcoin founder.

Along with the BBC and The Economist, Wright shared his evidence beforehand with GQ. It includes digital coins that only Satoshi Nakamoto would have, including "blocks used to send 10 Bitcoins to Hal Finney in January [2009] as the first Bitcoin transaction," Wright said, referring to a renowned cryptographer he says helped turn Bitcoin into reality. "I was the main part of it, but other people helped me," he added. BBC News spoke with Bitcoin experts who believe that Wright really is Nakamoto, but The Economist is a little skeptical.

"Our conclusion is that he could well be Mr. Nakamoto, but that nagging questions remain," The Economist said. "In fact, it may never be possible to prove beyond reasonable doubt who really created Bitcoin. Whether people, particularly Bitcoin cognoscenti, actually believe Mr. Wright will depend greatly on what he does next, after going public." Wright did tell The Economist where he came up with the name, citing the 17th century Japanese philosopher and merchant Tomonaga Nakamoto, a free trade proponent, though he wouldn't reveal where "Satoshi" came from ("Some things should remain secret," Wright said).

The Economist also points out that the Bitcoin community is enmeshed in a big debate about the direction the cryptocurrency should take, and that if Wright is accepted as Nakamoto, "his return from obscurity would most certainly change the dynamics of the debate about Bitcoin’s future direction." You can watch Wright talk to BBC News below. Peter Weber

December 16, 2014

The ruble has had such a horrible year that Russia's central bank just hiked interest rates to 17 percent to stem the currency's depreciation amid tanking oil prices and international sanctions. But at least as of Monday, one currency has done worse than the ruble's 46.5 percent slide against the U.S. dollar in 2014: Bitcoin.

According to Quartz's calculations, the virtual currency embraced by libertarians, the black market, and — at least at the start of the year — Wall Street investors, has lost 52 percent of its value versus the greenback. This chart from CoinDesk illustrates Bitcoin's drop against the U.S. dollar:

Bitcoin's bad year — Quartz calls it "the worst investment of 2014" — is due in part to government crackdowns on sites that used the cryptocurrency for illicit transactions, as well as shaken confidence in Bitcoin after the collapse of exchanges like Mt. Gox and Flexcoin. But the big lesson for "libertarian technologists," says Quartz's Matt Phillips, is that "money derives much of its value from its government support, in that the government has the power to make it legal tender. That is, the government says not only that currency can be accepted, but it must be accepted."

Still, Bitcoin enthusiasts and promoters are bullish for 2015. The currency will be volatile for a while, mostly because so few people use Bitcoin, Bobby Lee, head of Bitcoin trading platform BTC China, tells CNBC, "but theoretically, with wide adoption, the circulation value should be 100x or 1,000x what it is today." Peter Weber

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