Bitcoin prospects in dark after $2.7 million heist

The last few days have been tough for Bitcoin as it suffered three setbacks one after another. The three top exchanges halted its withdrawals, a reported heist of $2.7 million and the exploitation of a flaw in the Bitcoin protocol all leading to a common question- Are the end-times coming to Bitcoin?

Bitcoin is an experimental decentralized digital currency that enables instant payments to anyone across the world. Bitcoin uses peer-to-peer technology to operate with no central authority. The transactions are managed and money are issued collectively by the network.

Last week, Silk Road 2.0 which is a black market drug-trading site based on untraceable Bitcoins, reported a heist of about 4,474 Bitcoins, valued at about $2.7 million, from its site.

Production Of Bitcoins By Mike Caldwell of Casascius

 The site administrator, under the name Defcon, posted that “a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as ‘transaction malleability’ to repeatedly withdraw coins from our system until it was completely empty.”

Adding to the woes was the cyber attack. The hackers exploited a flaw in the Bitcoin protocol to repeatedly transfer the pseudo-currency. The technical glitch allows the attacker to hide the transaction ID and repeatedly request a transfer of the pseudo-currency.

Much to the trouble for this experimental digital money gateway, the three biggest Bitcoin exchanges — BitStamp, Mt. Gox and BTC-e — all halted trading temporarily in the last few days. BitStamp and Mt. Gox account for more than half of all traded Bitcoins.

 

  • Johnny G.

    Live by the sword….