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Not even two bits left

Since none of us was around in Asia Minor 2,600 years ago to witness the invention of coinage, or in Sweden in the 17th century to see the modern birth of central banking, we collectors can be forgiven if we take unusual interest in the bitcoin saga.

It is exciting to watch history being made.

Bitcoin was supposedly the birth of a new international currency five years ago that has no nation of issue and no central bank to manage it.

For some reason its advocates do not call it fiat money even though it has no physical form. They cite the limitations placed on the amount that can be created as making it special.

Its value is solely determined by what the next buyer will pay for a bitcoin.

That was enough to send its price soaring to over $1,200 each for a time. It has fallen to less than half that level since the peak.

The question is whether it is all simply an illusion and its value will go to zero.

The largest bitcoin exchange, Mt. Gox, has filed bankruptcy in Japan. Some $375 million in value of bitcoin is missing, apparently due to hackers.

There are other bitcoin exchanges, so the virtual currency may be down, but it might not yet be out.

What is the recourse for individuals who have lost money?

That is very unclear.

There may not be any.

At least with the imperfect national currencies and their banking systems, there are ways to recover stolen account balances.

Bitcoin was touted as a way of avoiding the roughly 3 percent fee charged for conventional electronic payment transactions as charged by credit card companies.

The credit card companies might mount a campaign reminding users that part of that fee is in effect insurance against loss from raided accounts.

That’s not glamorous, but it is important. It is also not the stuff of history-making drama.

Old-line currencies like the U.S. dollar, which has been around since 1792, and the British pound, which has been around even longer, look like they still have some advantages that will assure that they won’t disappear.

Everything is supposed to move faster in the Internet age. Perhaps the birth and possible death of bitcoin in five years is simply an example of this.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."