BitCoin

California's Department of Financial Institutions has issued a cease and desist letter to the Bitcoin Foundation for "allegedly engaging in the business of money transmission without a license or proper authorization," according to Forbes. The news comes after Bitcoin held its "Future of Payments" conference in San Jose last month.  (The license information is available on CA.gov and Forbes placed the cease and desist letter on Scribd.)

 Businesses that accept Bitcoins as payment risk making the transactions publicly traceable, which could get companies in trouble with government regulators, experts say.

The privacy weakness within the digital currency's payment network was reported on Wednesday by Wired, which found troubling possibilities related to transaction tracking. The problem is in the way the Bitcoin peer-to-peer network works.

Cryptocurrency technologies such as Bitcoin and Litecoin could be a double edged sword, warned a panel of hackers at the annual HackMiami 2013 Hackers Conference that took place last week in Miami Beach, FL. The panel concluded that the free market economic advantages of cryptocurrencies and the potential for transaction anonymity can be completely destroyed by improper use of the technology by the end user.

Why does Bitcoin work? Fraudsters should have left it in cinders years ago, and might have done, if it wasn’t for two things: spam and the Byzantine Empire.

A Bitcoin is basically an entry in a ledger that is distributed across a network of computers. Bitcoins are transferred between parties by noting the transaction in the ledger. This might sound just like any other banking system except there’s a crucial difference: no one is in charge of the ledger.

Sociologist, philosopher, computer industry pioneer and inventor of the term “hypertext” Ted Nelson is claiming that he knows the identity of Bitcoin inventor “Satoshi Nakamoto”.

In a rambling – and, let's face it, odd – 12-minute post on YouTube, Nelson spins out the suspense, throws in a dialogue with himself as Sherlock Holmes and Doctor Watson, and finally ends with the statement that the mystery developer of the cryptocurrency is Japanese mathematician Shinichi Mochizuki, research professor of mathematics at Kyoto University.

Bitcoin is not going away, the digital currency's developers say, and they're craving more technically savvy people to support its use.

"Our bottleneck is not new code, it's code review and testing," said Gavin Andresen , chief scientist at the Bitcoin Foundation, which provides most of the core backend development for the currency.

It might have passed you by, but an essential part of the Internet's infrastructure took a heavy knock last week. The Silk Road—you know, the website where you can buy any drug imaginable—was subjected to a series of distributed denial of service (DDoS) attacks.

Bitcoin, the four-year-old virtual currency that approximates cash on the internet, now powers an economy worth more than $1 billion and is widely admired for the technical sophistication that allows it to operate without a central authority. It got its own ticker on CNBC and inspired a legion of startups. And yet, we still don’t know where it came from.

Apparently, I'm a Bitcoin miner now, and it looks like I'm actually pretty good at it. Ars is currently in possession of one of the elusive but very real Butterfly Labs Bitcoin Miners. It's a tiny little black box that fits in the palm of my hand, and it contains a specialized ASIC adept at chewing through SHA-256 cryptographic functions—exactly the kind of calculations necessary to bring more Bitcoins into the world. Turns out, it's very good at what it does: it computes hashes at the rate of about 5.3 billion per second.

Here's a little-known quirk of cyber currency Bitcoin: There are coded messages hidden in the ledger that track bitcoin transactions. Most are innocuous, but this week, the discovery of a malicious transmission filled with porn links set the Bitcoin community abuzz.