Welcome to the CoinDesk Weekly Review 15th November 2013 – a regular look at the hottest, most controversial and thought-provoking events in the world of digital currency through the eyes of skepticism and wonder. Your host … John Law.

It seems it was only last week that bitcoin was trading at $250. Oh, wait - it was.

Now at over $400, bubblephobia is growing apace - although the price clearly has a way to go if the flood of tweets saying “Hey, I just bought bitcoin!” is any indication.

With that sort of week-on-week growth, who wouldn’t want to punt $100 or so?

However, there’s another growth industry piggy-backing on the pecuniary picnic. A “Hong Kong” trading platform GBL - actually based in Beijing simply disappeared, along with around $4m worth of investors’ bitcoin (curiously, exactly the same current value as the infamous pizza bought by Laszlo Hanyecz in May 2010 for 11,000 btc. Perhaps GBL was just peckish.)

A week earlier, inputs.io online wallet service was hacked to the tune of (at the time) $1.2m. Daniel Cawrey has a good analysis on the burgeoning bitcoin badness, if you want more. Still more, alas, is sure to come.

There is a golden rule in security. Any system can be broken, bypassed or compromised: the most important way to stay safe is to make the attack too expensive to be worthwhile.

That’s true even for systems based on imperviously good crypto - if the attackers can’t crack that, then they’ll break into the system with the keys, create a custom piece of malware, or simply bust down your door with guns and an offer you can’t refuse. It depends what’s in it for them.

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With bitcoin doing its Saturn V impersonation, that equation is looking increasingly dangerous.

Back in 2010, Hanyecz could have painted his wallet key on his forehead in day-glo ink and nobody would have bothered even to write it down. Three years later, if he hadn’t bought that pie, he’d be well advised to put his PC in a bank vault.

So expect bitcoin thievery and fraud to attract ever more motivated villains, and the reports of vanishing stashes to grow ever more frequent.

For while one of the delights of cryptocurrency is that it’s independent of the banking system, it’s also independent of its security system: if you’re on your own for the good stuff, you’re on your own for the bad.

That’s just one unfortunate aspect of bubble behaviour: assets that appreciate more gently only attract a gentle increase in unwelcome attention.

That gives everyone on the side of the angels more time to develop security systems and - just as importantly - a mindset that thinks about security first, quick wins second.

If you do have an appreciable quantity of bitcoin, do spare a few minutes to think about who knows about it - remember those tweets saying “Hey, I’ve just bought bitcoin!” - how you’re keeping it, and whether it might be an idea to move it somewhere else with a better password.

(Especially beware too-good-to-be-true offers from dodgy pseudonymous characters on the Internet. John Law’s Soop-A-Sayf Bitcoin Repository And Pizzeria (Lagos) Ltd will shortly be available to host all your cryptocurrency collections. Watch this space!)

As the recent history of the world demonstrates all too painfully, financial abuse isn’t limited to dodgy characters in the shadows.

Far more damage is done when nominally respectable pillars of the economy such as banks, brokers and insurance companies, take advantage of lax regulation to build up huge paper profits on the back of reprehensibly rancid dealings.

(John Law must admit to practical knowledge of this, following an unfortunate piece of entrepreneurship he set up 300 years ago, mixing international finance and trade. Still, Venice was nice.)

This knowledge should make everyone sensitive to potential problems to come.

With bitcoin on course to become properly respectable without losing its basic anonymity, it’s impossible to overlook the possibility that it will be enthusiastically adopted by grown-up organisations perhaps a little too eager to escape some of the more onerous rules that currently keep them on the straight and narrow.

One such may be the febrile world of American politics.

There is a near-permanent controversy over funding for political parties in most democracies, for the obvious reason that he who pays the piper calls the tunes.

Big business has all the money, while political parties exist to serve all the people. In the US, there is a constant battle to reveal the sources of funding for the incredibly expensive campaigns you have to run to be in with a shout of power.

Billionaires with agendas fight to keep their fingerprints off what pass as grass-roots campaign advertising, while activists and regulators do their best to maintain transparency.

So it is with some trepidation that John Law reads that a pressure group called the Conservative Action Fund is asking for bitcoin to be acceptable for political funding in America.

The funding regulator, the FEC, seems minded to let that happen, provided that recipients keep proper records: what could possibly go wrong?

It’s a tricky one for those who, like John Law, believe in the freedom to do what you like with your money while also being rather keen that attempts to influence the democratic process should be thoroughly accountable and above board.

The standard approach is that personal donations (usually defined as being below a certain amount) are less closely regulated than corporate ones, so limiting any bitcoin transactions to the personal level might do some good.

The best we can hope for, realistically, is that someone just keeps an eye on the total revenues from bitcoin and kicks up a fuss if it gets silly. Messy and open to all sorts of shenanigans, but that’s democracy for you.

A better approach, which makes the UK infinitely more pleasant than the US during election season, is just banning political advertising from the telly altogether apart from a few tightly controlled broadcast spots evenly distributed between the main parties.

Would never fly in the US, where freedom of speech is sacred and available to all with the cash to pay for it.

Since there’s been one confession, here’s another. When the last link is pasted and the final name checked in this column every week, John Law awards himself a large glass of something red and Gallic. No, not the French economy, it’s far more liquid than that.

Such habits, he feels, are essential to the spirit and practice of journalism. His minders at CoinDesk know this too, which is why they forwarded a press release with rather worrying haste earlier today, under the title “We thought you needed to know this”.

It’s not good form to just reprint commercial messages, but this is short and sweet and encourages the consumption of alcohol so let's be having it.

“We are the first online wine and liquor store to accept bitcoins. We sell everything from the low end to collectables. Our orders are processed within 24 hours and ship to all 50 states. I was wondering if you can let your readers know. John Ha, City Wine Cellar, NY. @citywinecellar”

Thanks, guys. It’s nice to know the American cousins are getting first shot at a service which marks a major milestone in the integration of bitcoin into truly civilised culture.

Not so nice to know that, for now, John Law will still be shlepping down to the local Waitrose to conduct some old-fashioned fiduciary with the folding fiat.

But when an equivalent service does open up under the approving gaze of Her Majesty, you can be sure that a full consumer evaluation will be made at the first opportunity.

John Law owes that to you, his loyal readers, and looks forward to coining a new phrase for the inevitable result: let's get bitfaced.

But please, remember to drink like a responsible journalist.

John Law is an 18th century Scottish entrepreneur, financial engineer and gambler. Having reformed the French economy, invented paper currency, state banks, the Mississippi Bubble and other ideas essential to modern economics, he took three hundred years off in a small cottage outside Bude. He has returned to write for CoinDesk on the foibles of digital currency.