> Perhaps the real Satoshi has a 5 year old kid and doesn't waste too much time on his pseudonymous accounts anymore.

The original Satoshi disappeared when Gavin Andresen, now lead programmer for bitcoin, mentioned he was going to talk to the CIA about the project. Satoshi immediately stopped posting on forums and hadn't been heard from until yesterday on any of those accounts. Either he was spooked by getting three letter agency spooks involved, or he *worked* for a three letter agency and thought his cover might be blown.

Analysis of the text of the original bitcoin paper (word choice, spelling, punctuation) points to Nick Szabo as the likely main creator of Bitcoin. Szabo had been working for several years before that on an idea called "bit gold", a direct technical predecessor of bitcoin. His website ( http://szabo.best.vwh.net/ ) has papers on many of the same topics that bitcoin is involved with. Japanese names are written last name first, so "Satoshi Nakamoto" and Nick Szabo both share the initials "NS". That's not proof, but it is suggestive.

Hal Finney may have made significant contributions. He developed the "proof of work" method by which bitcoin reaches consensus on the transaction history. Finney is a well known cryptography developer (he works on the PGP software). He started mining bitcoin the day after the software went live, and was the recipient of the very first bitcoin transaction, from "Satoshi" to him. Finney and Szabo are known to have met and communicated before bitcoin was created, and him starting to mine so early and getting the first transaction makes sense if they worked together on the project.

Examining the programming style of the first versions of bitcoin (before other open-source developers got involved) may help point to who created it, but I have not seen any analysis of that.

Bloomberg LLC is. They invested in venture company Andreessen-Horowitz, who in turn put $25 million into Coinbase, a company that processes merchant payments in bitcoin and deposits local currency to their bank account. They also have 1 million online wallets and sell bitcoins to individuals. Bloomberg TV does a lot of stories about bitcoin these days.

My analogy is "Bitcoin exchanges are like having sex with an alligator. You want to withdraw as soon as you are finished, or else you might get bitten."

Well, my copy from BitcoinQt is 17.2 GB, but that's because it has indexes so it can search the actual transactions faster. Still, that's only $0.65 of hard drive space, not a big deal. What will happen eventually, when it gets too big, is a bunch of people subscribe to a dedicated server with lots of storage, and pay for it with bitcoin. They can load the software themselves, and then compare it to other copies of the block chain to make sure they are identical

> If the blockchain is pruned, what is to keep someone from creating duplicate/counterfeit BitCoins that descend directly from the prune section?

Bitcoins can only be created when you find a hash for a new block. You would only prune transactions which have spent all their outputs. Therefore they have no balances left, and counterfeit balances descended from the pruned transactions would be zero. The block chain prevents double spending because you have a full record of where every balance currently is. Pruning doesn't change that, it only drops the transactions that are zeroed out by later transactions and thus no longer matter. You can check the pruned total against the latest block number, from which the current total of issued coins can be calculated. If they differ, your data is invalid.

Bitcoin "addresses" are unique. They are derived from several rounds of hashing functions on the private key of of a public-key encryption pair. Addresses hold some bitcoin balance amount, which is recorded to 8 decimal places. Bitcoin transactions move some amount of balance from one or more input addresses to one or more output addresses. The private key is required to digitally sign a transaction, so whoever knows that key, can spend the coins they control. Bitcoin "wallets" are files that contain as many keys as needed. Since they are 256 bit keys, one file can hold as many as you need.

Transactions are broadcast across a peer-to-peer network. They are collected by "miners" into "blocks" who attempt to find a low-valued hash for the block by varying the random number, where the data being hashed is [hash of previous block + hash of current block's transactions + random number]. How low the hash value needs to be is adjusted so the whole network finds one every ten minutes on average. Whoever finds the hash value first broadcasts the new block to the network, and everyone running the software updates their copy of the "Block Chain", the set of all blocks containing all past transactions.

Thus everyone has a complete history of all transactions, and every bitcoin amount can be tracked across all the transactions it has been involved with. Each block has a special "coin generation" transaction, which creates 25 new coins, and sends them to the miner's own address. Those 25 coins are worth $14,000 at today's rates, which drives the whole mining operation. Miners compete to find the next block, and claim the 25 new coins.

Since blocks are hard to create, and each block contains the previous block's hash value as data, they form a chained history which is effectively impossible to edit. Any change to any data invalidates the hash recorded in the next block, and every one after it. That is the innovation contained in bitcoin: digital data you can't edit. It is highly useful for recording financial transactions, but it can also be used for any other kind of data you don't want to change.

So not only does everyone have a copy of all past transactions, nobody can change them, because that would take all the computation power consumed since the point you want to change, and all the computation power is busy writing new blocks to earn the rewards of new coins.

The Zimbabwe dollar no longer exists. They use US dollars as their currency now. By that standard, bitcoin is way ahead, it still exists, and is up 1,682% (17.2 times) over one year ago today.

> People who sold things for BitCoins (BTC) and haven't moved them into a hard currency

Pretty much every merchant prices their products in local currency (i.e dollars, euro, etc.) and uses a "payment processor" to provide an exchange rate via software, and convert the bitcoin payment on the fly to their local currency. So there is no currency risk. This kind of service is necessary until use of bitcoin is widespread enough to make it as stable as other foreign currencies. Foreign currencies do fluctuate against each other, and anybody that does international sales has to account for it.

The value of the Bitcoin Network (as distinct from the currency token) is in the ability to move money quickly, with low fees. To illustrate, when I buy bitcoins at https://coinbase.com/ it takes 4 days for the ACH transfer from my bank to clear, but 1 hour for the transfer of bitcoins from Coinbase to my PC wallet to clear. Coinbase paid 11.2 cents in transaction fees to send me my coins. PayPal would charge $4.52 for the same value transaction.

Since the only way to use the Bitcoin Network is to get some of the tokens, demand to move money drives demand to buy the tokens. The price of the tokens is set by daily supply and demand, because there are only a finite number of them (12.4 million now, 21 million eventually). They can be subdivided to the 10 nano-bitcoin level ( called a "Satoshi"), but the total number is limited.

On top of the intended use to transfer money, people do speculate on future demand, and hence future price. But that's like speculating on wheat in the commodities market. The primary use for wheat is to make baked goods, day trading is just froth on top of the actual useful purpose of wheat.

If you live in Cyprus, this statement is false. Depositors lost a lot.

The Earth is not a closed system, either materially or energetically. We can also leave it and utilize the resources outside the Earth. Communications satellites already do this. They tap a tiny fraction of the Sun's energy that misses the Earth.

This Senator is too dumb to properly define what a cryptocurrency is, so no, he didn't.

He played football in college, but had to quit because of injuries. My guess is one too many concussions from tackles in an era before proper helmets (he's 70 years old now). Just like Muhammed Ali, he can smile for the camera, but is a few cards short of a full deck.

> Makes me kind of wonder about the identiy of Satoshi Nakomoto.

Makes a lot of people wonder. Likely he was properly paranoid and used good security. Otherwise someone would have tracked him down and used rubber hose cryptography on him. He is estimated to hold ~1,000,000 bitcoins, from being the very first miner and it was trivially easy to mine back then. At today's rates that is worth $600 million. Definitely worth a criminal enterprise's time to figure out who it is. Since his original coins have never been spent (the Block Chain proves it), this has likely not happened.

You are quite wrong in this. The US Dollar is almost entirely backed by debt. In order to obtain paper money (Federal Reserve Notes), a bank must deposit adequate collateral, such as Treasury Bonds. When banks do fractional reserve lending, and increase the money supply, the additional book-entry dollars are now backed by loans from the bank. The exception to this are the gold certificates held by the Fed, which nominally are backed by Treasury vault gold. Since they are not allowed to exchange the certificates for physical gold, it is arguable that they are backed by nothing, and the gold was confiscated by the US government. Gold certificates at market exchange rates are worth $400 billion, which is only about 4% of the M2 money supply, so they are not a big factor either way. The rest is debt.

Of course, bankers like a system where money is backed by debt, since money and debt are their business, and they can make it a growth business. Money backed by precious metals would be the business of mining companies, and growth is limited by physical supply.

> For example, I think it has potential for a "free" way to do high volume B2B settlement among international entities... but I never hear anyone talk about this.

If you mean mainstream media, they are clueless about other uses for bitcoin besides speculation and buying drugs. The core innovation in bitcoin is using chained hashes with proof-of-work to create provably unaltered databases. Bitcoin happens to use it to record monetary transactions, but the same technology can be used to record *any type of data whatsoever*. Think about that for a minute. You can encode a business contract with a currency payment script included (bitcoin transactions are actually scripts, you can program them). Then when one party completes their side of the contract, they automatically get paid. No having to send an invoice, wait for the check in the mail, etc.

I'm working on distributed automated production (https://en.wikibooks.org/wiki/Seed_Factories/WWF), where different automated machines with different owners produce parts of a product. A method like the above would be an excellent low-overhead way to coordinate work across a network. But hubris and being brought low is a classic story, so the fall of Mt.Gox or Silk Road is a much more attractive story to the media (who are basically story-tellers). The work of making production more efficient doesn't make the news, and your basic bitcoin saving retailers 5% on sales barely rates a mention. That comes from reduced bank fees, fraud, and chargebacks.