Inside the Mega-Hack of Bitcoin: the Full Story. The largest Bitcoin exchange, Mt.
Gox suffered an emergency closure today after a massive hack led to a plunge in value. (Source: LeanBack.eu) Another view shows the same tremendous dropoff as the malicious parties sold off Bitcoins for pennies on the dollar. (Source: Tycale Charts) Volatility and security concerns have cast a dark shadow of the peer-to-peer cryptocurrency in recent weeks. Many Bitcoin fans consider emergency market closures flagrant heresy. Mt. The storm had been building for over a week now. I. Bitcoins are a peer-to-peer cryptocurrency. Invented in 2009 by a shadowy Japanese figure -- Satoshi Nakamoto -- the coins promise a degree of anonymity against casual tracking attempts (though insecure practices, or more concerted government efforts could still breach your anonymity.
To seed the market with Bitcoins, the brains behind the project created the concept of "mining" coins -- devoting computing resources to finding "blocks" of Bitcoins. Bitcoin Prices Plummet on Hacked Exchange. The Bitcoin community faced another crisis on Sunday afternoon as the price of the currency on the most popular exchange, Mt.Gox, fell from $17 to pennies in a matter of minutes.
Trading was quickly suspended and visitors to the home page were redirected to a statement blaming the crash on a compromised user account. Mt.Gox’s Mark Karpeles said that the exchange would be taken offline to give administrators time to roll back the suspect transactions. The extent of the compromise became clear when a copy of Mt.Gox’s user database began circulating online. The file included username, email addres, and hashed password for thousands of Mt.Gox users. Karpeles’s statement was updated to acknowledge the breach. The crash appears to be the fault of the Mt.Gox exchange rather than a collapse in the value of the currency itself, as the integrity of Bitcoin’s underlying peer-to-peer transaction clearing process does not appear to have been compromised. Hack attack deflates virtual currency Bitcoin. Within 10 days of hearing about Bitcoins, Matthew Thompson had spent more than $10,000 to acquire some of the online currency.
"I like to be sort of leading edge and if my customers want to pay me in a certain way, I'm going to do my best to accept it," said Mr. Thompson, a 29-year-old from Markham, Ont., who runs an online start-up. The unregulated currency got Mr. Thompson's attention when a customer asked if he accepted them as payment. He began researching and found the virtual currency to be unlike any payment method he'd seen before. "It's sort of an experiment; nobody really knows what's going to happen," Mr. The decentralized, digital currency can be used to buy a limited products and services online including alpaca socks and cloud storage. The coins can be acquired in four different ways. Simpler ways include buying them on an online exchange, accepting them as payment or trading for cash.
"There's no security. Bitcoin Value Plummets Following Hack. The Japan-based Mt.
Gox exchange for digital currency Bitcoin has said it is aiming to return to service “very soon” following a security incident over the weekend that caused the value of Bitcoins to plunge. The incident stemmed from a hack on an individual who had access to the exchange’s system, according to Mark Karpeles, who operates the exchange. $1000 theft sparks falling value While only about $1,000 worth of Bitcoins were stolen, the irregular trading that resulted from the incident caused the value of the Bitcoin currency to plunge from around $17.50 (£11) on Sunday to a fraction of that, Karpeles said.
He said all trades since the incident will be rolled back when the exchange reopens, and that as a result the currency should reopen at about $17.50. The Mt. “It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised,” he wrote in a note on Monday. Only one account was affected, according to Karpeles. Scrutiny.