Bitcoin usage is on the rise; the virtual currency is now employed by everyone from advertisers to artists. In fact, Bitcoin has apparently grown so popular that it warranted its own FBI report.

Published in late April but leaked yesterday, the unclassified document–of which Wired provided a PDF–outlines the federal government’s fears surrounding the Bitcoin currency, primarily that in the near future, “cyber criminals will treat Bitcoin as another payment option alongside more traditional and established virtual currencies.”

Ars Technica was able to confirm the theft of 46,703 BTC, as individual units of Bitcoin are known, worth about $228,845 in US currency based on current exchange rates. More than 43,000 of the stolen BTC belonged to a Bitcoin trading platform known as Bitcoinica, the company’s CEO and lead developer, Zhou Tong, told Ars. Another 3,094 BTC were lifted from the virtual purse of Marek Palatinus, a freelance programmer from the Czech Republic. He said in an interview that a separate Bitcoin user he’s been in contact with lost 50 BTC to the same attackers. And Gavin Andresen, the lead Bitcoin programmer, told Ars he lost all 5 BTC he had stored in one online account.

Hours after Palatinus and Andresen brought the Thursday-morning attacks to light, cloud services provider Linode confirmed that a hacker targeted Bitcoin wallets stored on its servers after compromising a customer service portal.

What seems to blow people’s minds about Bitcoin, at least initially, is that it’s more of an idea about the money of the future than it is a well-functioning alternative currency today. I guess you could say it’s in beta right now. And that means it’s picked up a renegade reputation, by virtue of its popularity for buying drugs and porn.

Paxum, an e-commerce payments solution popular with adult web sites, started working with Bitcoin exchanges more than a year ago. Paxum hooked up with leading Bitcoin exchange Mt. Gox in December 2010, major Bitcoin exchange Tradehill in July 2011, and more recently with BitInstant, a service that speeds up Bitcoin transactions by fronting customers the credit, and others.

But on Friday afternoon, the operators of Paxum’s Bitcoin-related accounts received an email with the subject line “Bitcoin termination.” Paxum’s banking partners, which include Mastercard, had called off the Bitcoin party.

Although Bitcoin is not illegal, Paxum’s partners consider the cryptocurrency “high risk,” Paxum explained. “We simply must cease all business with Bitcoin based on our banking partners/Mastercard etc. We don’t have a choice in the matter I’m afraid,” Ruth Blair, a representative for Paxum, told Betabeat via Skype.

History
The mechanics behind digital currency appear complicated, but the major problem facing it is easy to understand. What would keep you from using it more than once? Assuming your digital currency was placed in your digital wallet, why couldn’t you send it out to multiple people at the same time? With traditional currency, there is a physical exchange and unless you have exceptional resources that allow you to counterfeit, you can only use it once until you earn it back.

Police pursued Dotcom through his $30 million mansion to find him sheltering in a panic room where there was a shotgun.

An estimated $17 million in art, cars and cash was seized in Auckland as part of the global operation. More than $100m was seized around the world.

The original plan was to have three or four investors, but Mr. Ver offered in full and wanted to be on the team, Mr. Shrem said. “An offer I could not refuse!”

Mr. Shrem hired a programmer and a designer with the investment.