Bitcoin is an algorithmic currency backed not by printed banknotes or government assurances, but by a database of cryptographic proofs-of-work. Bitcoin is a decentralised digital currency backed by algorithms rather than banknotes. The biggest Bitcoin exchange, Mt. Gox, suffered a temporary meltdown in 2011 which saw the price of bitcoins plunge in minutes from $17 to about one cent. In 2012, Bitcoin exchange Bitcoinica suffered two digital breakins, leading to bitcoins worth more than $300,000 being stolen.”]
Source: https://nakedsecurity.sophos.com/2013/03/13/anatomy-of-a-problem-bitcoin-loses-25-percent-in-value/