are an electronic currency that are generated as computers solve a changing mathematical problem. A BitCoin is essentially just a secret number, which is protected from unauthorized transfers by public key cryptography, that is associated with an 34-character alphanumeric "address" that a user holds.

BitFloor, based in New York City, allowed account holders to buy and sell BitCoins, exchange the currency for U.S. dollars and transfer the money using the ACH (Automated Clearing House) system.

The cryptography wrapped around BitCoins is designed to make it nearly impossible to derive the private keys needed to gain possession of the secret number. But in the case of BitFloor, hackers found the keys.

Roman Shtylman, BitFloor's founder, wrote on a that the hackers obtained an unencrypted backup of the keys, which were then used to transfer coins held by BitFloor. The backup "was made when I manually did an upgrade and was put in the unencrypted area on disk," he wrote.

"I realize the details of the failure and attack are interesting but I am currently focused on user accounts and exchange status going forward," he wrote.