DAVID GREENE, HOST:
Congress is showing a lot of interest in virtual currencies. This week there were not one but two hearings on Capitol Hill. Lawmakers are exploring currencies that do not exist in the physical world, just on Internet. Senator Mark Warner acknowledged it's a complicated topic.
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SENATOR MARK WARREN: You know, I've been following this development with bitcoins for the last few months. And I think I'm only starting to wrap my head around the potential upside, downside.
GREENE: David Kestenbaum with our Planet Money team checked in with a computer programmer who works on bitcoin about those upsides and downsides. And about what it's like to have a project you've worked on suddenly become the focus of a congressional hearing.
DAVID KESTENBAUM, BYLINE: Gavin Andresen is chief scientist at the bitcoin foundation. I first talked with him back in 2011. He had fallen in love with the idea of bitcoin. It was cash for the Internet, for the whole world to use. And he told me and my colleague Jacob Goldstein, the bitcoin computer code was brilliantly designed. Though he didn't know exactly who had designed it.
GAVIN ANDRESEN: The idea started with a guy named Satoshi Nakamoto. He's a bit of a mysterious figure. We're not sure if Satoshi Nakamoto is his real name. I've only ever interacted with him via email and electronically on the bitcoin forums.
JACOB GOLDSTEIN, BYLINE: Are you Satoshi Nakamoto?
ANDRESEN: I am not Satoshi Nakamoto.
KESTENBAUM: Do you have any sense for - has he ever made a joke in an email or anything?
ANDRESEN: He never has.
KESTENBAUM: Or she, I suppose.
ANDRESEN: Or them.
GOLDSTEIN: Or them.
KESTENBAUM: Them. I like them.
GOLDSTEIN: Always strictly business, just about the bitcoin project and the code.
KESTENBAUM: Since then, bitcoin has gotten a lot of attention and not all of it good. Bitcoins can be used anonymously. So one question has always been what exactly are people buying with bitcoins? Gavin bought computer equipment, and t-shirts. But people have also been buying other things. Including - I'm looking at court documents here - lysergic acid diethylamide, better known as LSD, also heroin, cocaine, and meth.
That's from last month, when the FBI shut down an underground online marketplace called Silk Road. The court documents also allege that bitcoins had been used to try to take out contracts on people's lives. So I called Gavin Andresen up again and asked him how he felt about that.
ANDRESEN: Yeah, that's really disturbing. That bothers me. And for me as a tech geek, you know, my first thought is all right, how can we stop this? You know, how can we fix it? And this is a case where maybe it can't be fixed with technology.
KESTENBAUM: Of course, U.S. dollars have also been used to pay for drugs. And worse. At the hearings this week in Congress there was a lot of talk about Silk Road, and drugs and money laundering, but the talk was not all negative. In fact Mythelee Ramen with the U.S. Justice Department's criminal division, came right out and said this.
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MYTHELEE RAMEN: Virtual currencies in and of themselves are not illegal; we've all recognized that innovation is important.
KESTENBAUM: And in a letter, Ben Bernanke, the chairman of the Federal Reserve, the man in charge of the most powerful currency in the world, the U.S. dollar, wrote that virtual currencies, quote, "may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system." For Gavin to have this little project he'd worked on being discussed by Senators and top government officials was amazing.
In the congressional record, you know, we have bitcoin and Satoshi Nakamoto. Which is pretty exciting. This little baby - you know, what my wife used to call my pretend money project - is really going mainstream.
What does she call it now?
ANDRESEN: She doesn't call it my pretend money project anymore.
ANDRESEN: Yeah. She just calls it bitcoin.
KESTENBAUM: The amount of actual stuff being purchased with bitcoins still seems pretty small. But the price of bitcoins has shot up. When I first talked to Gavin in 2011 you could buy one bitcoin for less than $20 bucks. This week, maybe because of the hearings, the price hit an all time high $600 or more.
One name notably absent from the people testifying before congress: Satoshi Nakamoto, the person or people who created bitcoin. Gavin says there is a Satoshi Nakamoto email address. But it's been silent for a while. David Kestenbaum, NPR News.
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GREENE: You're listening to MORNING EDITION from NPR News.
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