The virtual currency Bitcoin isn’t backed by any assets or central authority. It’s only three years old and its exact origin is a mystery. And yet, for some reason, tens of thousands of people have determined that a single Bitcoin — essentially a unique sequence of letters and numbers — hit $ 105 US dollars earlier today, the most in its short history. At a time when the euro seems increasingly unstable, financial publications like Businessweek are asking if Bitcoin may be the world’s last economic safe haven . In the early days of Bitcoin, the price was decided by a small community of users who traded the currency on forums. Today users use real-world currencies ranging from the US dollar to the Polish zloty to buy Bitcoin on real-time exchanges. These exchanges determine Bitcon’s price based on what people are willing to pay. The largest of these exchanges, by far, is Mt. Gox. “”If you want to buy Bitcoins, you need to find someone you can trust.”” Mt. Gox is based in a highrise office building in Tokyo’s hip Shibuya district. Right now, it’s processing about 76 percent of all Bitcoin currency trades around the world, which translates to around $6 million worth of Bitcoin trades per day. That means roughly $60,000 in revenue for the tiny company, minus salaries for its 18 employees, as well as the costs of site maintenance and fees paid to financial regulators. Mt. Gox serves as a reliable middleman that facilitates trades between users, just like a foreign exchange. “Bitcoin is a large economy, [and even though] people want to buy Bitcoins, it’s hard to directly find someone who has got whatever you want,” explained CEO Mark Karpeles. “If you want to buy Bitcoins, you need to find someone you can trust.” And as the promise of a utopian one-world internet currency endures , Mt. Gox is becoming a liaison between the neo-cypherpunk Bitcoin community and governments around the world. Origins Karpeles bought the site in 2011 from its founder, Jed McCaleb, also known for developing the infamous video-sharing site eDonkey. McCaleb originally started Mt. Gox as an exchange for Magic: The Gathering playing cards, which explains its odd name , but his growing interest in Bitcoin soon surpassed his affinity for Magic. Seeing the need for a central exchange where users could match buy and sell orders, he converted Mt. Gox to a Bitcoin exchange in 2010. The site grew astonishingly fast. McCaleb soon found he had neither the time nor the resources to keep it going. He passed the keys to Karpeles, a Frenchman who had moved to Japan in 2009 to become an internet entrepreneur. (McCaleb is now working on a new virtual currency called Ripple, set to be released later this year, which some have hailed as a potential Bitcoin competitor.) “Mt. Gox grew astonishingly fast” Soon after Karpeles took over, Mt. Gox suffered a massive attack. A hacker gained control of McCaleb’s administrator account, the sizable number of Bitcoins therein, as well as the entire user database, and attempted to sell off more than $7 million worth of Bitcoins , driving the price nearly to zero. Karpeles panicked and shut the exchange down. The Bitcoin economy has been plagued by high- profile heists. Before Mt. Gox, a service called MyBitcoin, which allowed users to store their Bitcoins online, lost more than $2 million worth of Bitcoins in what was either an attack or the culmination of a long con . Even before that, Bitcoinica, one of the larger Bitcoin exchanges, suffered two attacks and shut down; four deposit holders, including McCaleb, later sued over $ 460,000 worth of missing funds. Mt. Gox’s headquarters in Tokyo. But where other services apologized profusely and folded, Mt. Gox rebounded. The total damage was only 2,000 Bitcoins thanks to the rapid shutdown, which Mt. Gox pledged to replace at its own expense . Karpeles and his team issued a battery of public statements, made appearances in the Bitcoin media world, and pledged to make their customers whole. Establishment in an anti-establishment world The deft handling of its “mega-hack” public relations crisis set the stage for Mt. Gox’s role as a pillar in the fragmented, highly anonymous Bitcoin community. To Karpeles, that role also means Mt. Gox must surface from the Bitcoin underground and play by the global economy’s rules. The US Treasury’s Financial Crimes Enforcement Network recently declared that some Bitcoin businesses must register with the government , an edict that enraged many users and prompted a condemnation from the Bitcoin Foundation, the nonprofit that serves as the closest thing to a trade association . By contrast, Mt. Gox had already inked a partnership with a FINCEN- registered company in order to ensure that its North American transactions are all above-board. Mt. Gox estimates it costs $25 million in the first year to become fully compliant in the US. But considering a regulator could potentially swoop in and seize funds if a violation were found, it’s worth it. “We are the leader,” said Gonzague Gay- Bouchery, Mt. Gox’s chief marketing officer. “We have a huge responsibility to do things by the books.” “It costs $25 million in the first year to become fully compliant in the US” That attitude isn’t totally accepted by the Bitcoin community. Some use Bitcoin to buy drugs or launder money; others merely have libertarian tendencies. Either way, many people use Bitcoin precisely because they believe it is outside government oversight. “Lots of people in the Bitcoin community chafe at what they think are silly, designed-fifty-years-ago government regulations that tell you what you may or may not do with your money,” said Gavin Andresen, the lead developer on the open source Bitcoin Project that powers the currency. “I think it is almost always counter-productive for politicians to try to control what citizens do with their money. [But] when we’re talking about government-issued-and-controlled money, they get to make the rules, and businesses like Mt. Gox are obliged to follow those rules.” Market changes Bitcoin is in the middle of an insane rise in price that started at the beginning of the year. It may not continue. This kind of frenzy happened once before: after a slew of media attention in the summer of 2011, the currency spiked at $31.91 and then dove below $2 four months later. Bitcoin market cap. Source: blockchain.info , which uses public information about Bitcoin transactions. The little economy, which had a market capitalization of more than $1.03 billion at the time of this writing, endured through that crash and other challenges. Increasingly trustworthy entities like Mt. Gox, BitInstant, BitPay, and the Bitcoin Foundation are emerging, and major companies including Reddit and WordPress have started accepting Bitcoin. “”We are the leader. We have a huge responsibility to do things by the books.”” It’s been speculated that the European debt troubles and the bank crisis in Cyprus pumped up the demand for Bitcoins, but there is little evidence for this theory and Mt. Gox hasn’t seen any patterns that support it. It’s more likely that the currency’s deflationary design contributed to the price increase. In December, a safeguard built into the technology triggered a change that made generating new Bitcoins twice as difficult. Karpeles acknowledges that the Bitcoin price may dive again, but he believes the digital currency has a long-term future. His hope is that one day, users will buy and sell everything within an independent Bitcoin economy, reducing the need to trade it for other currencies on exchanges like Mt. Gox. But until that happens, he and Mt. Gox are committed to providing much-needed liquidity to the nascent economy. “We’re building a bridge between the current system and Bitcoin,” he said.