Bitcoin security (by alaric)

I've been learning about Bitcoin lately.

It's an electronic currency. I've seen electronic currency before - in the late 90s there were efforts to create them based on virtual banks issuing coins. The coins were basically long random serial numbers which, along with a statement of the value of the coin, were then signed by the bank. The public key of the bank is published, so people can check they're valid coins issued by the bank. The idea was that rather than withdrawing a bunch of notes from the bank, you can ask the bank to mint you a bunch of these signed numbers instead; and anyone who sees them can check their value, and eventually, return them to the bank (which can also check their value in the same way) to get their account credited.

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