The Rise and Fall of Bitcoin ⇥

Benjamin Wallace, reporting for Wired Magazine:

From early April to the end of May, the going rate for a bitcoin rose from 86 cents to $8.89. Then, after Gawker published a story on June 1 about the currency’s popularity among online drug dealers, it more than tripled in a week, soaring to about $27. The market value of all bitcoins in circulation was approaching $130 million.

[…]

“People have the mistaken impression that virtual currency means you can trust a random person over the Internet,” says Jeff Garzik, a member of bitcoin’s core developer group.

In between these two pull quotes is a story of betrayal, experimentation and disaster. It’s what you should be reading.