It's been a rough week for Bitcoin. You may have heard something about the largest exchange for the digital currency losing an estimated $350 million after more than 700,000 Bitcoins were stolen. Well, Jon Stewart is here to demystify what's going on with what he calls "the world's youngest money."
First, let's start with a basic description. Bitcoin exists exclusively on the internet – it is "the Tamagotchi of currency," in the words of Stewart. It has a strong foundation of ardent supporters, many of which believe Bitcoin is the "gold of the future," (Are Bitcoin grills the future of rap?, Stewart wondered) and it is slowly gaining more traction in the mainstream.
"I don't see what could go wrong. Nothing's more reliable and secure than the internet," Stewart said. Which means, of course, that something has indeed gone very wrong.
And that brings us to the Mt. Gox bust earlier this week. As we mentioned, the Bitcoin exchange based in Tokyo lost roughly $350 million, either because it was hacked and hundreds of thousands of Bitcoins were stolen, or it was committing some serious fraud.
Stewart had a suggestion for the internet currency: why not simply try restarting? Did Mt. Gox check its trash bin? What about pressing "control + alt + money?" That didn't work? Too bad.
How did something like this happen? "It's not like money that doesn't really exist can just disappear," Stewart said. Some experts suspect fraud on behalf of Mt. Gox. Which would be pretty bold, to do it all at once like this. "Listen, [Mt. Gox]. You got a lot to learn about being a financial player: You just don't commit brazen fraud in one fell swoop. You institutionalize and normalize systemic fraud," Stewart said. You know, just as the real financial institutions, like Credit Suisse and Goldman Sachs do it.
But we're forgetting the best part of this whole fiasco. What does Mt. Gox, the name of the Bitcoin exchange holding millions of dollars worth of digital currency, actually mean? That would be "Magic The Gathering Online Exchange." As in, the trading card game. Because Mt. Gox originally started as "a place for people to trade Magic cards." And now it's in the middle of a $350 million Bitcoin heist.
That right there is the beauty of the internet.
This article is from the archive of our partner The Wire.