Benjamin Wallace, for Wired:

In the public’s imagination, overnight the bitcoin went from being the currency of tomorrow to a dystopian joke. The Electronic Frontier Foundation quietly stopped accepting bitcoin donations. Two Irish scholars specializing in network analysis demonstrated that bitcoin wasn’t nearly as anonymous as many had assumed: They were able to identify the handles of a number of people who had donated bitcoins to Wikileaks. (The organization announced in June 2011 that it was accepting such donations.) Nontechnical newcomers to the currency, expecting it to be easy to use, were disappointed to find that an extraordinary amount of effort was required to obtain, hold, and spend bitcoins. For a time, one of the easier ways to buy them was to first use Paypal to buy Linden dollars, the virtual currency in Second Life, then trade them within that make-believe universe for bitcoins. As the tone of media coverage shifted from gee-whiz to skeptical, attention that had once been thrilling became a source of resentment.

A really fascinating read. Long.

Bitcoin, for the uninitiated, is a form of online currency not linked to “real world” money, so supposedly is less traceable – it rose in public awareness along with a service called Silk Road, a server that lets people buy and sell narcotics – where bit coin was the preferred currency.

Wallace’s piece examines the history of bitcoin, the forces behind its creation and ascension, and what has ultimately led to its downfall as well (bitcoin’s value has dropped precipitiously).