So much for Bitcoins?

Mt. Gox, once the dominant exchange for bitcoin trading, on Friday said more than $470 million of the virtual currency vanished from its digital coffers, kicking into high gear a search for the missing money by victims and cybersleuths. 

Acting alone and in groups, the people stepped up their efforts after Mt. Gox filed for bankruptcy protection in Japan and confirmed rumors it had lost almost 750,000 of its customers' bitcoins, as well as roughly 100,000 of its own.

Mt. Gox Chief Executive Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, though he didn't provide details. 

"There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble," Mr. Karpelès said at a packed news conference at a Tokyo courthouse after the bankruptcy filing.

The disappearance underscores the risks of currencies that exist only online and aren't backed by a central bank. Mt. Gox wasn't overseen by national regulators, so there is no entity to step in and back investors' deposits. 

t wasn't clear whether or how the missing bitcoins would be found. Bitcoin's underlying software code, known in developer circles as "the protocol," is believed to keep track of every transaction using a special marker that can be traced via an online ledger.

CLICK HERE to view an interactive view of a a rough
timeline of the Bitcoin evolution.

Unlike cash, which might be difficult to track if it is stolen from a bank vault and then widely dispersed, bitcoin transactions are logged in the ledger, which essentially can be accessed by anyone with a computer. 

Some computing experts believed any hackers might be capable of covering the tracks of a potential computer break-in. But if each bitcoin has a marker, it would make it more difficult for thieves to try to convert a big stash into another currency, in the same way it would be difficult for an art thief to pawn off a pilfered Matisse painting quickly. 

Those factors are giving hope to the wave of Mt. Gox victims and treasure hunters who have fanned out in search of the missing bitcoins. The virtual currency that disappeared represents nearly 7% of all bitcoins in circulation.

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