Significant problems in the online economy of the online Bitcoin virtual currency have been caused by a generalized hacker attack attempting to engage in fraudulent transactions, taking advantage of a vulnerability in the design of the entire system.
Posted by iGuRu.gr in the morning of 12 February 2014
According to the Guardian, three online exchanges have stopped conversions from bitcoins to "real" money because of this phenomenon. The value of Bitcoin has marked a significant drop due to the attack, as on February 5th it was at $926 and yesterday it had dropped to $530 on MtGox (one of the aforementioned exchanges). Bitstamp (Slovenia) and BTC-e (Bulgaria) have also suspended "withdrawals".
It is noted that recently the Chinese and Russian authorities have begun to take action against the use of the famous virtual currency, which is widely used for money laundering, illicit financing and tax evasion.
"This is a denial of service attack (DoS)," said Jinjiang Li Englund, a spokesman for the Bitcoin Foundation. "Whoever does this does not steal coins, but manages to stop the confirmation of some transactions. It is important to clarify that attacks do not affect users' wallets ".
As clarified in a statement from MtGox, a problem in the software of Bitcoin makes it possible to use the network to falsify details about a transaction so that it appears that a transfer of coins to a "wallet" has not occurred (when in fact it has). Once the transaction appears to have not been completed, the bitcoins may be sent again – a phenomenon which can result in the entire system "crashing" due to the loss confidences from the users' point of view. As mentioned in a related CNN article, this particular problem has been highlighted since 2011, but not all exchanges have addressed it. Also, it is noted that this particular type of attack is relatively easy and not at all costly for the perpetrators.
"This proves that Bitcoin is, at best, a beta venture," said Alex Daly, an executive at Casey Research. "Until such a system sees widespread use for many years, you will continue to find problems in its implementation."
Source: naftemporiki.gr
