Bitcoin was invented just after the global financial crisis by a mysterious computer guru — or perhaps a group of gurus — using the pseudonym Satoshi Nakamotoby. It is a form of cryptography-based e-money obtainable — “mined” as it were — only via complicated, lengthy algorithmic computations by computer. Bitcoins can be stored either virtually or on a user's hard drive, and they offer a largely anonymous payment system favored my members of the “underground economy.”
Here are 14 images that reveal the world’s fascination with this strange global phenomenon.
1. Winklevoss Twins at a Bitcoin Investigation
Twin brothers Cameron, left, and Tyler Winklevoss, principals of Winklevoss Capital Management, share a word during a hearing called "The Investor Perspective: The Future of Virtual Currencies" in New York on Jan. 24, 2014. The hearing was held by the New York Department of Financial Services to shed light on new currencies and their impact on the modern financial system.
2. Sydney Bitcoin Pub Crawl
The Old Fitzroy Pub owner Garry Pasfield serves a customer using Bitcoins on September 19, 2013, in Sydney, Australia. Using a smartphone and a QR code scanning application, customers are able to purchase beer and menu items at the bar. The Old Fitzroy is the first Australian pub to accept Bitcoin payment.
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3. Mike Caldwell, Master of the (Bitcoin) Mint
This series of images shows software engineer Mike Caldwell as he creates physical Bitcoins. In the first image, he applies a sample key. In the second photo, Caldwell removes holograms he’s printed from a sheet of paper to apply to Bitcoins he is minting in his shop. In the third photo, Caldwell applies the holograms to the Bitcoins. Finally, he shows the finished product of the front (at right) and back (at left) of a Bitcoin.
4. At the Inside Bitcoins Conference, Berlin
In the top photo, Aaron Koenig, managing director of the Global Bitcoin Alliance, poses for a picture at the Inside Bitcoins conference in Berlin on Feb. 12, 2014. The Global Bitcoin Alliance describes itself as an umbrella group for nonprofit organizations that promote the currency at a national level.
In the bottom photo are Bitcoin buttons displayed on a table at the Inside Bitcoins conference, which brought together entrepreneurs and enthusiasts of the virtual currency to discuss business opportunities and recent developments.
5. Bitcoin Bust
Self-described “Bitcoin evangelist” Charles “Charlie” Shrem, 24, exits Manhattan federal court on Jan. 27, 2014, in New York. Shrem, the chief executive officer of the Bitcoin startup company BitInstant and vice chairman of the Bitcoin Foundation that promotes the Bitcoin currency system, was arrested the previous day at New York's Kennedy Airport on money laundering charges and operating an unlicensed money transmitting business.
Prosecutors allege that Shrem and another defendant, Robert M. Faiella (a virtual currency trader known as BTCKing), conspired to sell more than $1 million in Bitcoins to users of the black market website Silk Road, who allegedly used the site to buy illegal narcotics anonymously. (In October 2013 the FBI shut down Silk Road.)
Founded by Shrem and Gareth Nelson in 2011 with a $10,000 loan from Shrem’s family, BitInstant was to become the “go-to site” to quickly and easily turn conventional currencies into digital bitcoins, and vice versa. The BitInstant website shut down in 2013, in the wake of a class action lawsuit by three people asserting that BitInstant made false claims about the speed of its service and the refund of fees. One of the investors in BitInstant — to the tune of $1.5 million raised in a round of seed funding —was Winklevoss Capital, the tech investment company owned by twins Tyler and Cameron Winklevoss who famously sued Mark Zuckerberg claiming that Facebook was their idea.
6. Bitcoin ATMs
In the upper photo, the world's first Bitcoin ATM is seen at a coffee shop in downtown Vancouver on Oct. 28, 2013. The ATM, which was officially unveiled the following day, allows consumers to exchange Canadian cash for digital cash.
The middle photo shows the first ATM machine dispensing Bitcoin digital currency in the Slovak capital of Bratislava in November 2013. While Bitcoin has great interest among Slovaks, the ability to pay with the currency is still very limited in the country. The photo of the ATM was taken Dec. 27, 2013.
In the bottom image, Kyle Powers (left) and Chris Yim of Liberty Teller install a Bitcoin ATM at South Station on Feb. 20, 2014, in Boston. The ATM was placed by Liberty Teller to help inform people about the digital currency, which can be bought and sold anonymously, and can be used at a number of online retailers in place of cash or credit cards. Additional ATMs will appear this month in Seattle and Austin, Texas.
7. Mining Bitcoins, Chinese Style
In the upper photo, Chinese Bitcoin miner Feng Yupeng shows a chip-integrated mainboard he and other investors developed for mining Bitcoins at their office in Chongqing, China. In the lower photo is an assembled Bitcoin mining machine in Yupeng’s office.
Yupeng, a professional Bitcoin miner in China, claims to have made a big fortune from the digital virtual currency. Risking his wealth, Feng teamed up with other investors and Bitcoin miners to share the risk and gains of Bitcoin mining. They established one of China’s biggest Bitcoin mining orgazinations, Lande Mining Bureau.
To save time and speed up mining efficiency, they developed their own mining machines, a kind of customized personal computer with multiple chips and mainboards, instead of buying such machines from foreign countries. They were also planning a mining plant and decided to build it at an abandoned plastic factory. All the mining machines to be installed at the plant will have a total power of 200kw, which costs more than 80,000 yuan (US $13,180) for electricity per month. The plant was scheduled to open in in early 2014 and will be the biggest calculation capacity Bitcoin plant in southwest China, Yupeng said.
8. Living on Bitcoins
In June 2013, Austin Craig and Beccy Bingham of Provo, Utah, said they wanted to see if they could live their first 90 days of wedded bliss by using only Bitcoin to pay for things. The experiment started when they came back from their honeymoon on July 23. They traveled across the U.S. and arrived in New York on Oct. 17, then flew to Stockholm, Berlin, and Singapore before returning to Provo on Nov. 1, 2013, 101 days after their departure, having paid for everything with Bitcoins.
9. Bobby Lee, a Chinese Bitcoin Luminary
Chinese investors have poured billions into the virtual Bitcoin currency, driving its price to almost the level of an ounce of gold, but stoking fears of a huge and unsustainable bubble.
In December 2013, the central bank, The Peoples Bank of China, said Bitcoin was not a currency with real meaning and could not be accorded the same legal status. The bank and four other government agencies that regulate finance issued a joint announcement banning Chinese financial institutions from dealing in Bitcoin transactions.
Although customers can no longer use payment processors to fund accounts, BTC China (China's Bitcoin exchange co-founded and run by Bobby Lee, seen here) now uses a voucher system enabling people to sell their BTC-China dollars as vouchers on eBay-like websites. To fund a BTC-China account, they enter their voucher code on the exchange’s website. Other exchanges such as Huobi and OKCoin let users wire money directly into exchange bank accounts.
10. Las Vegas Embraces Bitcoins, Sort Of
An LED sign seen Jan. 22, 2014, outside the D Las Vegas advertises that the property now accepts Bitcoin. The D Las Vegas and the Golden Gate Hotel & Casino in downtown Las Vegas accept the digital currency, except for use on the gambling floors, and process Bitcoin purchases through BitPay.
11. Bitcoin: A Currency or a Commodity?
A sign announces a proprietor's loyalty to Bitcoins, where they are also accepted for payment, at a pub on April 11, 2013 in Berlin, Germany. The Bitcoin digital currency is traded on the MTGox exchange, and its value fluctuates like that of a commodity.
12. America’s Bitcoin Pow Wow
In the upper photo, Eric Martindale, left, and John Dreyzehner from BitPay, a world leader in Bitcoin business solutions, demonstrate a transaction using an iPad to charge a customer who is using his phone to transfer Bitcoins for the purchase. The demo is at the North American Bitcoin Conference being held in the Miami Beach Convention Centre on Jan. 25, 2014, in Florida. The convention brings together more than 500 Bitcoin community members for a direction-setting conference aimed at driving the currency from speculation to mainstream.
In the lower photo, Adam Schiffman uses his phone to transfer Bitcoins to Paul Moscatt as he buys a T-shirt from his Cryptoanarchy store at the North American Bitcoin Conference in Miami Beach.
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13. Have a Happy Chinese Bitcoin New Year
A promotional model distributes “lai see” packets filled with Bitcoin coupons to pedestrians to mark the Chinese New Year in Hong Kong on Jan. 30, 2014.
14. Future Currency or Latest Bubble?
Is Bitcoin really a currency? A commodity — because its value is volitile? A stock — because there are a fixed number of Bitcoins? A form of payment? Or all of these things?
European banking regulators, the Bank of France and the Chinese central bank all warn consumers about hacking and other risks associated with online currencies such as Bitcoin, adding pressure to calls for the sector to be regulated.
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