Some unfortunate news for bullish Bitcoin investors this week (I’m lookin’ at you, Tyler and Cameron!):
- VentureBeat reports that 4,474 Bitcoin — about $2.7 million — were stolen from black-market e-commerce site Silk Road 2.0, where transactions are completed entirely through Bitcoin. Site administrator ‘Defcon’ wrote 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.”
- BitStamp, currently the world’s largest Bitcoin exchange, halted customer withdrawals and claimed a denial-of-service attack was causing “inconsistent results” of their total Bitcoin. The denial of service attack is apparently based on the same vulnerability which facilitated the Silk Road 2.0 robbery.
- Mt. Gox, which the Dept. of Homeland Security accused last year of running an “unlicensed money transmitting business,” also temporarily banned withdrawals because of inconsistent transaction calculations.
The cluster of problems implies a single hacker attack, but Bitcoin’s very nature as an anarchic currency — and the illicit purchases involving Bitcoin — will not likely incur the Department of Justice to jump to the rescue.
Bitcoin’s price currently hovers around $650, although given the currency’s wild spikes in price, there’s a good chance it’ll be above $1000 by the time I hit ‘Publish.’ And don’t expect me