So this week I did something I havent done in probably a year: I went digging through an old external hard drive looking for a wallet.dat file. Not because I suddenly need cash, but because Bitcoin decided to lose its mind again and it reminded me I might actually still have some.
If you havent been watching, heres the short version. Bitcoin spent the first part of April climbing like crazy, from around $100 up past $260, and on April 10th it hit a peak somewhere around $266 on Mt. Gox before falling apart completely. Within hours it was back down under $105. Mt. Gox, which is still basically the main exchange everyone uses even though its run out of what looks like a small office in Tokyo with a UI from 2009, got so overloaded with trading volume (and reportedly a DDoS on top of it) that they had to halt trading for something like twelve hours just to let things cool down. Twelve hours! In any other market that would be a scandal. In Bitcoin land its just Tuesday.
Ive been half-following Bitcoin since 2011, back when I mined a tiny amount on my desktop's GPU for about a week before deciding the fan noise wasnt worth whatever fraction of a coin I was accumulating. I dont even remember what I did with the wallet file after that, which is probably going to be a fun problem later if it turns out to be worth anything, or a complete non-issue because I definitely reformatted that drive at some point. I havent found it yet. Ill update if I do, though dont hold your breath, this computer has moved houses twice since then.
The bigger story here isnt really the price, its how badly the infrastructure buckled. Mt. Gox handles something like 70-80% of Bitcoin trading and its been held together with duct tape for years, this is not exactly news to anyone whos used it. People have been complaining about withdrawal delays and janky API behavior since at least last summer. So when the price started moving fast and everyone tried to buy or sell at once, the whole thing basically fell over. Theres something almost funny about a currency built around the idea of not trusting centralized institutions being completely at the mercy of one janky centralized website whenever things get interesting.
By the time I'm typing this the price has settled down some, its been bouncing around in a much calmer range the last day or two compared to the chaos of last weekend, though "calmer" for Bitcoin still means moves that would get a stock halted. Ive seen people on forums saying this is exactly the kind of shakeout that happens before a real currency matures, and other people saying its proof the whole thing is a toy that cant survive real trading volume. I dont think its either, honestly. I think its a small market with not much liquidity and one dominant exchange with bad engineering, and both of those things are separately true and separately fixable, or not.
What I keep coming back to is how much attention this got outside the usual crypto forums this week. My roommate, who has never mentioned Bitcoin to me once in two years of living together, asked me about it at breakfast because it was on some morning show ticker. Thats new. A year ago this would've been a story on three blogs and a subreddit. Now its apparently breakfast television material, which either means its becoming a real thing people care about or means we've officially hit peak hype and the next stop is everyone forgetting about it again for six months. Given the last week, Im not ruling out both happening in the same month.
Anyway. If anyone has advice on recovering an old Bitcoin wallet file from a drive you're 60% sure you already wiped, my inbox is open. Otherwise I'll just keep half-watching the charts like everyone else and pretending I have some grand theory about where this goes next.