Math

"Because it’s math. You can’t kill math," explained one of the Bitcoiners manning the Shirtoshi booth, which sold T-shirts with slogans like, "Bitcoin Billionaire," "RUN BTC," and "Bitcoin is the future."

Math, or the underlying ingenuity of the Bitcoin protocol, is a big part of the reason for its resilience. Bitcoin is basically a ledger system in which every transaction in the economy must be logged in a central public record called the blockchain. New transactions are checked against the blockchain to ensure that a specific user hasn’t tried to spend that Bitcoin before, eliminating the "double-spend" problem. The system depends on users to provide the computing power to do this logging and checking. These users are called miners because they’re rewarded for their work with new Bitcoins; this also means the money supply will gradually increase until it hits a cap of 21 million. Once that happens, miners will be compensated with transaction fees just like those charged by PayPal or Visa.

Satoshi Nakamoto, the pseudonymous programmer (or programmers) who invented Bitcoin and organized the original community must have agonized over its economic and technical features. Bitcoin is deflationary, which is extremely rare for a currency — the only analogues would be gold and silver. Bitcoins can be divided down to eight decimal places, so a single Bitcoin may eventually be like a $1,000 bill, with most transactions done in smaller denominations. A one hundred millionth of a Bitcoin, the smallest unit, is called a "satoshi."

If Bitcoin were a person, it would be "really solid, really powerful. Just like, a natural-born leader."

Bitcoin was born on January 3rd, 2009, at 6:15PM Greenwich Mean Time, which is when Satoshi Nakamoto mined the first 50 coins, known as the "genesis block." One attendee at Bitcoin 2013 offered to read the currency’s astrological chart for me. Bitcoin’s sun sign is Capricorn, which means it is an innovator. Its Mars sign is also in Capricorn, which means people love it. The sun and Mars were close together in the sky on the night of Bitcoin’s birth, which gives it energy and strength. If Bitcoin were a person, she said, it would be "really solid, really powerful. Just like, a natural-born leader."

Bitcoin’s design had flaws, but the original code was good enough to entice programmers like Jeff Garzik, a coder at Red Hat, and Gavin Andresen, a software developer at University of Massachusetts, to work on it for free. The fundamentals were strong: transparency created trust; a network of users substituted for a central authority; and built-in deflation canceled out any circumstantial inflation that might devalue the currency. Whenever a problem arose, members of the community worked together to fix it. Everyone who has tried to find a fatal flaw in Bitcoin, including renowned security researcher Dan Kaminsky, has failed.

Garrick Hileman, who is working on his PhD and teaching at the London School of Economics, gave a talk at the conference about the history of alternative currencies and why they fail. He thought Bitcoin was done for after the big crash last year, but now he’s bullish (though he hasn’t bought any, in order to preserve his academic neutrality).

"There is something really special about the fundamental protocol, and also the people who are working on it, and the ethos of the Bitcoin community," he said. He pointed to the most recent crisis, in which an upgrade to the Bitcoin software was not universally adopted, creating a "chain fork" with two conflicting versions of the blockchain. This was potentially disastrous, because it negated the safeguard against spending the same Bitcoin twice. Leaders at the Bitcoin Foundation, the closest thing Bitcoin has to a government, corralled miners into using the "correct" chain.

"It reminds me of the headline of this hotel review for The Bowery, where I’m staying in New York next week: ‘Tried to hate it, couldn’t hate it,’" Hileman said. "You can’t keep Bitcoin down."