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What Ever Happened to All That Bitcoin Talk?

NEW YORK (TheStreet) -- Bitcoin searches at Google (GOOG) peaked in early-December just as the virtual currency was reaching a mouth-watering $1,147. Since then, Bitcoin's value as measured in that traditional tender known as U.S. dollars, has fallen into the mid-$400s.

Coincidentally, interest in Bitcoin as reflected in Google searches, has also declined.

This might not seem like an opportune time to release a film entitled The Rise and Rise of Bitcoin, but the digital currency's devotees have never been much for convention. While Bitcoin has lost more than 60% of its value since hitting that all-time high, those who bought the digital tender at the beginning of 2013 when a Bitcoin could be had for a mere $13, are still relatively happy.

And Nicholas Mross, 31, the director of The Rise and Rise of Bitcoin, and his brother Dan, 36, the central figure in the movie, are certainly happy and excited to talk about Bitcoin. The Brothers Mross don't roll their eyes or shrug their shoulders or wave a knowing finger at the mention of the digital currency. They don't claim to know what the future holds for Bitcoin but they don't flinch at defending its sanctity, its transparency or its long-term viability. They're true believers.

"It's an opt-in currency," said Dan Mross in an interview last month in New York marking the debut of the film at New York's Tribeca Film Festival. "People who don't believe it or are skeptical about the technology, don't have to use it. That's the beauty of it."

Indeed, there is something beautiful about Bitcoin. At its core, Bitcoin is a technology, a scientific process unencumbered by government regulators or greedy bankers. Not surprisingly, the engineering and tech community led the initial burst of enthusiasm for Bitcoin.

In January, Marc Andreessen, of the venture capital firm Andreessen Horowitz and widely regarded as one of the smartest men in tech, wrote in The New York Times that Bitcoin "at its most fundamental level is a breakthrough in computer science." As for its practical application, Andreesen wrote that "Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure."

The thinking here is that because all Bitcoin transactions are supposedly recorded over the Internet, it's an open and transparent system. Rather than handing power to a central bank, oversight of Bitcoin is "crowd sourced" to "miners" such as Dan Mross.

"If all of a sudden, money is taken out of the picture, or money is replaced with a system that forces transparency and eliminates the ability of people to cheat, that's a net good for humanity," Dan added. "Bitcoin is a system that has honesty encoded into it."

The Mross Brothers, who both live in Pittsburgh got the idea for a Bitcoin film when Nicholas, a filmmaker, couldn't help but notice that his brother Dan, a self-described tech geek and computer programmer, was becoming increasingly involved in the enticing yet murky world of Bitcoin. Nicholas had remade his basement into a computer lab, spending untold hours "mining" for Bitcoins. That is, he was verifying Bitcoin transactions the world over and getting paid for it - in Bitcoins, of course.

The Rise and Rise of Bitcoin is a look into the lives and colorful obsessions of tech aficionados similar to Dan Mross who collaborate with various libertarians and government critics of both political parties (Republicans and Democrats) who mostly agree that the Recession of 2008 was the result of a monetary system that is anything but transparent.

"I saw Bitcoin as a solution to a problem that we've had for a long time," Dan said. "We try to build these systems that are fair, and then they inevitably get corrupted. It's not some evil Master Plan. It's just that people are prone to corruption."

Unfortunately, naysayers occupy little room in the The Rise and Rise Of Bitcoin. Nicholas Mross said it was difficult to find a critical voice during 2013 when Bitcoin was rising in value by some 988%. One might question just how hard they were trying, or whether being surrounded by Bitcoin enthusiasts day-and-night made it seem as though the whole world is joining the virtual currency party.

"We reached out to a few people but there weren't many [critics] out there," Nicholas Mross said. "How can people be against something that they themselves need to first understand and then to have enough grounds to say, this isn't going to work?"

By early-December, of course, would-be skeptics had more than enough evidence to make a critical case. A Chinese Bitcoin exchange made public that the government declared it illegal to Renminbi, the country's currency, to purchase Bitcoin. The value of the digital currency plummeted on the news. So much for resiliency.

In January, Charlie Shrem, chief executive of the digital currency exchange BitInstant, was charged and later indicted in connection with allegedly laundering money through a drug-trafficking website, Silk Road. Shrem was also a board member at the Bitcoin Foundation, a non-profit group that promotes the virtual currency. Shrem has plead not guilty.

Skeptics looked even smarter in February when Bitcoin's largest trading exchange, the Japan-based Mt. Gox, declared that its was actually insolvent, allegedly the victim of fraud. Its top executive Mark Karpeles said some 750,000 Bitcoins, roughly 7% of the currency's total circulation with a value of more than $470 million, had vanished. Disappeared into darkness of the Internet. The U.S. Attorney's Office for the Southern District of New York has since opened an investigation of Mt. Gox. 

Victims of the fraud might have wished that Bitcoin was backed by a central bank. But of course, central banks are evil

The Mross Brothers' film is sure to play well among Bitcoin enthusiasts just as many documentaries aimed at rallying supporters often do. At present, the Mross' have yet to announce a distribution deal for The Rise and Rise of Bitcoin.

 At last check, the value of a Bitcoin had fallen and fallen in 2014 by 41%, trading at $437.17.

--Leon Lazaroff is TheStreet's deputy managing editor.

>Contact by Email.

>>Read More: Bitcoins, Guns and Gold: Life Among the Libertarians

Leon Lazaroff is TheStreet's deputy managing editor.

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