itcoin, a purely digital currency, is backed by no commodity and governed by no central bank, but it exists because a small number of humans have chosen to believe in its legitimacy.
Its pseudonymous creator (or, more likely, creators) “Satoshi Nakamoto” willed it into existence in 2009, not only describing how the so-called cryptocurrency would work but shipping a full working implementation. The original software had all the hallmarks of a gag or hack: a great, metastasizing practical joke played by clever cyberlibertarian coders upon all who put their faith in fiat (that is, government-backed) currencies.
Then came the believers. Today, there are thousands of people loyal to the ideology and opportunities that Bitcoin represents. They imagine a world where economies are less dependent on banks and governments, and they’re actually using Bitcoin, often in disruptive ways. The currency had a rocky start when it became the medium of exchange for illegal drug transactions on Silk Road, but that huge narcotics marketplace was shut down last October and its founder arrested. Indeed, the currency seems more or less respectable. Since Bitcoin is essentially a kind of transaction log, where past transactions are public and known to the world, it is of great interest to prosecutors, who have called the coins “Prosecution Futures.” Last year, even U.S. Federal Reserve chairman Ben Bernanke gave them his cautious endorsement.