Sometimes the virtual world is not as safe as we’re led to believe.

The past few years have been an interesting confusing mix of reality with cyber reality. The great financial collapse in 2008 was attempted to be ‘solved’ by an anonymous patent covering the concept known as Bitcoin.

Bitcoin is not issued by any nation state. You can ‘mine’ Bitcoin’s working on a math problem. In theory it’s quite an elegant design. There will only ever be so many Bitcoin’s ever created. The math problem is very complex. Just the cost of the electricity to run the computer in 2013 to create a Bitcoin is not covered by the value of the virtual currency. In finance speak, it is not fiat money (or backed by gold – you can learn directly about the benefits of gold-based currencies at  Bullionvault.com).

There is more than $1 billion worth of Bitcoin currently in circulation. And more than half its value was wiped out overnight on 14 MaBitCoin Icony 2013.

This occurred when and Iowa State start up Dwolla was served by a court order by the Department Of Homeland Security in the United States District Court in Maryland, suspending trading between the firm and majority Japanese space trader of Bitcoin, MtGox.

The reason for all this is not completely clear however the US Immigration and Customs Enforcement stated:

“In order not to compromise this ongoing investigation conducted by ICE Homeland Security Investigations Baltimore, we cannot comment beyond the information in the warrant which was filed in the District of Maryland earlier today.”

This is not the first time Bitcoin has seen a remarkable clash in its value. A denial of service attack on MtGox less than a month ago brought about a crash in the currency’s value exceeding $100 off of each crypto coin.

While I’m all for technology bringing good things to life, a for real precious metal securely stored with a reputable broker seems even today like the only way to sleep at night, come hell or high water.