In early February 2014, one of the largest bitcoin exchanges, Mt. Gox, suspended withdrawals citing technical issues. By the end of the month, Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen. Months before the filing, the popularity of Mt. Gox had waned as users experienced difficulties withdrawing funds.
^ Jump up to: a b c d "Statement of Jennifer Shasky Calvery, Director Financial Crimes Enforcement Network United States Department of the Treasury Before the United States Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on National Security and International Trade and Finance Subcommittee on Economic Policy" (PDF). fincen.gov. Financial Crimes Enforcement Network. 19 November 2013. Archived (PDF) from the original on 9 October 2016. Retrieved 1 June 2014.
^ Jump up to: a b c d Joshua A. Kroll; Ian C. Davey; Edward W. Felten (11–12 June 2013). "The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries" (PDF). The Twelfth Workshop on the Economics of Information Security (WEIS 2013). Archived (PDF) from the original on 9 May 2016. Retrieved 26 April 2016. A transaction fee is like a tip or gratuity left for the miner.
“These companies are using extraordinary amounts of electricity – typically thousands of times more electricity than an average residential customer would use,” a spokesperson for the New York State Department of Public Service told Wired. “The sheer amount of electricity being used is leading to higher costs for customers in small communities because of a limited supply of low-cost hydropower.”
"Satoshi Nakamoto" is presumed to be a pseudonym for the person or people who designed the original bitcoin protocol in 2008 and launched the network in 2009. Nakamoto was responsible for creating the majority of the official bitcoin software and was active in making modifications and posting technical information on the bitcoin forum. There has been much speculation as to the identity of Satoshi Nakamoto with suspects including Dai, Szabo, and Finney – and accompanying denials. The possibility that Satoshi Nakamoto was a computer collective in the European financial sector has also been discussed.
Investigations into the real identity of Satoshi Nakamoto were attempted by The New Yorker and Fast Company. The New Yorker's investigation brought up at least two possible candidates: Michael Clear and Vili Lehdonvirta. Fast Company's investigation brought up circumstantial evidence linking an encryption patent application filed by Neal King, Vladimir Oksman and Charles Bry on 15 August 2008, and the bitcoin.org domain name which was registered 72 hours later. The patent application (#20100042841) contained networking and encryption technologies similar to bitcoin's, and textual analysis revealed that the phrase "... computationally impractical to reverse" appeared in both the patent application and bitcoin's whitepaper. All three inventors explicitly denied being Satoshi Nakamoto.
It would seem even early collaborators on the project don’t have verifiable proof of Satoshi’s identity. To reveal conclusively who Satoshi Nakamoto is, a definitive link would need to be made between his/her activity with Bitcoin and his/her identity. That could come in the form of linking the party behind the domain registration of bitcoin.org, email and forum accounts used by Satoshi Nakamoto, or ownership of some portion of the earliest mined bitcoins. Even though the bitcoins Satoshi likely possesses are traceable on the blockchain, it seems he/she has yet to cash them out in a way that reveals his/her identity. If Satoshi were to move his/her bitcoins to an exchange today, this might attract attention, but it seems unlikely that a well-funded and successful exchange would betray a customer's privacy.
Third-party internet services called online wallets offer similar functionality but may be easier to use. In this case, credentials to access funds are stored with the online wallet provider rather than on the user's hardware. As a result, the user must have complete trust in the wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. An example of such a security breach occurred with Mt. Gox in 2011. This has led to the often-repeated meme "Not your keys, not your bitcoin".
An official investigation into bitcoin traders was reported in May 2018. The U.S. Justice Department launched an investigation into possible price manipulation, including the techniques of spoofing and wash trades. Traders in the U.S., the U.K, South Korea, and possibly other countries are being investigated. Brett Redfearn, head of the U.S. Securities and Exchange Commission's Division of Trading and Markets, had identified several manipulation techniques of concern in March 2018.
We will look at bitcoin as currency and bitcoin as a store of value. In order to place a value on bitcoin we need to project what market penetration it will achieve in each sphere. This article will not make a case for what the market penetration will be, but for the sake of the evaluation, we'll pick a rather arbitrary value of 15%, both for bitcoin as a currency and bitcoin as a store of value. You are encouraged to form your own opinion for this projection and adjust the valuation accordingly.