Bitcoin Exchange Bombarded By Another Massive Cyber Attack

Yard Dart · Apr 4, 2013

The value of red-hot Bitcoins tumbled more than 20% overnight after one of the virtual currency’s key exchanges grappled with the most powerful cyber attack it has ever seen and the second major blitz in less than a week.
While the level of interest and value of Bitcoins continues to explode, the latest glitch draws further attention to potential downfalls of relying on a relatively new electronic currency.
Tokyo-based Mt. Gox, which calls itself the world’s most established Bitcoin exchange, said in a statement that it “has been suffering from its worst trading lag ever” due to a “major” distributed denial of service (DDoS) attack.
“It’s been an epic few days on Bitcoin,” Mt. Gox said. “However, there are many who will try to take advantage of the system. The past few days were a reminder of this sad truth.”
The cyber attack helped drive the value of one Bitcoin to as low as $115 overnight, representing a 22% decline from its peak of about $145 on Wednesday, according to bitcoincharts.com. Bitcoin quickly recovered, climbing back above $140 in recent trading.
“The sheer volume of this DDoS left us scrambling to fine-tune the system every few hours,” Mt. Gox said.

It’s unclear who is behind the DDoS attacks but Mt. Gox said it believes the hackers were aiming to destabilize Bitcoin and “abuse the system for profit.”
Daniel Friedberg, a financial-services attorney at Seattle law firm Graham & Dunn who has a Bitcoin client base, told FOX Business last week that any disruption creates customer complaints on Bitcoin.
“Users of Bitcoin are not used to any ‘down time’ and have grown accustomed to being able to immediately convert the Bitcoin virtual currency into real legal tender, 24 hours a day, 7 days a week,” Friedberg said.
Mt. Gox, which suffered a similar cyber attack on March 28, noted that even more established players like NYSE Euronext (NYX) and Nasdaq OMX Group (NDAQ) suffer technical issues. “We can fix lag, but we cannot eradicate lag,” Mt. Gox said.
Despite the cyber attacks on the key exchange, Bitcoin is still clearly enjoying an explosion of interest, with its value of Bitcoins outstanding surpassing the $1 billion threshold last week.
The value of Bitcoins has skyrocketed as well, surging a ridiculous 635% since trading at about $20 in early February.
The virtual currency has benefited from a surge of interest triggered in part by the “bail in” of bank depositors in Cyprus last month, which bolstered concerns about the safety of traditional banks and currency.
Built in 2009 as an open-source software code, Bitcoin is highly decentralized, making it very appealing to those concerned about central-bank actions aimed at devaluing traditional
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Bitcoin Exchange Bombarded By Another Massive Cyber Attack | Fox Business

VisuTrac · Apr 4, 2013

let see, what was that saying? hmm.
first they ignore you
then they ridicule you
then they fight you
then you win.

I think someone is fighting.

just guessin.

Beano · Apr 4, 2013

I'm not a smart guy, but the bitcoin craze seems every bit as nonsensical as skinny jeans or Jersey Shore reruns.

Yard Dart · Apr 5, 2013

I am not very familiar with Bitcoin but know many here are participating with it quite a bit. To me it is essentially another way of "money" just disappearing under certain circumstances, just like any investment in a stock per se. For those knowledgeable in this area, what is the benefit of Bitcoin over traditional PM's for your financial well being and how do you protect your intrest?

larryinalabama · Apr 5, 2013

Never her of botcoin, I buy a bunch of equiptment, and parts from China and the bank charges me 80$ and they sometimes loose the money.

Clyde · Apr 8, 2013

I bet the hack originated from the FBI on behalf of the FED

9h0s7 · Apr 9, 2013

Absolutely.
Definitely government sponsored.
The amount of computer processing power alone needed to take control over the legitimate hosts is only something actual supercomputers could be capable of because it would have to be more powerful than the entire collective p2p network that BitCoin runs on.
FAQ - Bitcoin

VisuTrac · Apr 10, 2013

MtGox got DDOS'ed today. Price dropped over 160 USD down to 105. As of now, price has recovered to 180. We will see where it goes from here.

Yard Dart · Apr 10, 2013

LONDON (AP) — With $600 stuffed in one pocket and a smartphone tucked in the other, Patricio Fink struck a deal that's joining thousands like it in a virtual revolution.
The Argentine software developer was dealing in bitcoins — getting an injection of the cybercurrency in exchange for a wad of real greenbacks he handed to a pair of Australian tourists in a Buenos Aires Starbucks. Fink wanted to add to his electronic wallet. The visitors wanted spending money at black market rates without the risk of getting roughed up in one of the Argentine capital's black market exchanges.
In the safety of the coffee shop, the tourists transferred Fink their bitcoins through an app on their smartphone and walked away with the cash.
"It's something that is new," said Fink, 24, who described the deal to The Associated Press over Skype. "And it's working."
It's transactions like these — up to 70,000 of them each day over the past month — that have propelled bitcoins from the world of Internet oddities to the cusp of mainstream use, a remarkable breakthrough for a currency which made its online debut only four years ago. When they first began pinging across the Internet, bitcoins could buy you almost nothing. Now, there's almost nothing bitcoins can't buy. From hard drugs to hard currency, songs to survival gear, cars to consumer goods, retailers are rushing to welcome the virtual currency whose unofficial symbol is a dollar-like, double-barred B.
Advocates describe Bitcoin as the foundation stone of a Utopian economy: no borders, no change fees, no closing hours, and no one to tell you what you can and can't do with your money. The total value of bitcoins now topping $2 billion from a tiny fraction of that just last year, critics say it's a bubble waiting to burst.
Amid all the hype, Bitcoin's origins are a question mark.
The mechanics of the virtual currency were first outlined in a research paper signed Satoshi Nakamoto — likely a pseudonym — and the coins made their online debut in 2009. How coins are created, how transactions are authenticated and how the whole system manages to power forward with no central bank, no financial regulator and a user base of wily hackers all comes down computing power and savoir faire. Or, as Nicholas Colas, chief market strategist for the ConvergEx Group, describes it: "genius on so many levels."
The lynchpin of the system is a network of "miners" — high-end computer users who supply the Bitcoin network with processing power needed to maintain a transparent, running tally of all transactions. The tally is one of the most important ways in which the system prevents fraud, and the miners are rewarded for supporting the system with an occasional helping of brand-new bitcoins.
Those bitcoins have become a white hot commodity in the past few days.
Rising from roughly $13 at the beginning of the year, the price of a single bitcoin blasted through the $100 barrier last week, according to Mt. Gox, a site where users can swap bitcoins for more traditional currencies. On Tuesday, the price of a single bitcoin had topped $200. On Wednesday, it hit $266 before a "flash crash" took it down to half that. The value then climbed back to just below $200.
Some say the banking crisis in Cyprus helped spur interest in the cybercurrency as depositors looked for creative ways to move money. Fink, the Argentine, favors bitcoins because he believes they will insulate him from his country's high inflation. Others — from Iranian musicians to American auto dealers — use the currency to dodge international sanctions or reach new markets.
But the anything-goes nature of Bitcoin has also made it attractive to denizens of the Internet's dark side.
One of the most prominent destinations for bitcoins remains Silk Road, a black market website where drug dealers advertise their wares in a consumer-friendly atmosphere redolent of Amazon or eBay — complete with a shopping cart icon, a five-point rating system and voluminous user reviews. The site uses Tor, an online anonymity network, to mask the location of its servers, while bitcoin payments ensure there's no paper trail.
One British user told AP he first got interested in Silk Road while he was working in China, where he used the site to order banned books. After moving to Japan, he turned to the site for the occasional high.
"Buying recreational drugs in Japan is difficult, especially if you don't know people from growing up there," said the user, who asked for anonymity because he did not his connection to Silk Road to be publicly known.
He warned that one of the site's drawbacks was that the drugs can take weeks to arrive "so there's no spontaneity."
Drug dealers aren't the only ones cashing in on Bitcoin. The hackers behind Lulz Security, whose campaign of online havoc drew worldwide attention back in 2011, received thousands of dollars' worth of bitcoins after promising followers that the money would go towards launching attacks against the FBI.
A report apparently drawn up by the bureau and leaked to the Internet last year said that "since Bitcoin does not have a centralized authority, detecting suspicious activity, identifying users and obtaining transaction records is problematic for law enforcement."
It went on to warn that bitcoins might become "an increasingly useful tool for various illegal activities beyond the cyber realm" — including child pornography, trafficking, and terrorism.
The FBI did not immediately respond to an email seeking comment.
Late last month the U.S. Treasury's Financial Crimes Enforcement Network, or FinCen, announced it was extending its money laundering rules to U.S. bitcoin dealers and transfer services, meaning that companies that trade in the cybercurrency would have to keep more detailed records and report high-value transactions.
Many in the Bitcoin community are frustrated at the attention paid to the shadier side of the virtual economy.
Atlanta-based entrepreneur Anthony Gallippi said the focus on drugs and hacking misses the "much bigger e-commerce use for this that's growing and that's growing rapidly."
Very few businesses set their prices in bitcoins, but an increasing number are accepting it for payment. Gallippi's company, BitPay, handles Bitcoin transactions for some 4,500 companies, taking payments in bitcoins and forwarding the cash equivalent to the vendor involved, which means that his clients are insulated from the cybercurrency's volatility.
He said many of the businesses are e-commerce websites, but he said an increasing number of traditional retailers were looking to get into the game as well.
"We just had an auto dealership in Kansas city apply," he said.
In March BitPay said its vendors had done a record $5.2 million in bitcoin sales — well ahead of the $1.2 million's worth of monthly revenue estimated to have coursed through Silk Road last year.
Even artists accept bitcoins. Tehran-based music producer Mohammad Rafigh said the currency had allowed him to sell his albums "all over the world and not only in Iran."
Gallippi said the cybercurrency's ease of access was its biggest selling point.
With Bitcoin, "I can access my money from any computing device at any time and do whatever the heck I want with it," he said.
"Once you move your money into the cloud why would you ever go back to putting your money in the bank?"
Many Wall Street veterans are skeptical — seeing Bitcoin as just the latest overvalued asset overdue for an ugly fall.
"Trading tulips in real time," is how longtime UBS stockbroker Art Cashin described Bitcoin's vertiginous rise, comparing it to the now-unfathomable craze that saw 18th century Dutch speculators trade spectacular sums of money for a single flower bulb.
"It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time," he said in a note to clients last week.
But bitcoins are still generating buzz.
Colas, the ConvergEx strategist, said he'd been overwhelmed by calls from venture capitalists and private equity managers asking about Bitcoin.
"Some very smart people feel there's some real value here," he said.
One Bitcoin supporter with a unique perspective on the boom might be Mike Caldwell, a 35-year-old software engineer based in suburban Utah. Caldwell is unusual insofar as he mints physical versions of bitcoins at his residence, cranking out thousands of homemade tokens with codes protected by tamper-proof holographic seals — a retro-futuristic kind of prepaid cash.
Caldwell acknowledges that the physical coins were intended as novelty items, minted for the benefit of people "who had a hard time grasping a virtual coin."
But that hasn't held back business. Caldwell said he'd minted between 16,000 and 17,000 coins in the year and a half that he's been in business. Demand is so intense he recently announced he was accepting clients by invitation only.
Some may wonder whether Caldwell's coins will one day be among the few physical reminders of an expensive fad that evaporated into the electronic ether — perhaps the result of a breakdown in its electronic architecture, or maybe after a crackdown by government regulators.
When asked, Caldwell acknowledged that bitcoin might be in for a bumpy ride. But he drew the analogy between the peer-to-peer currency enthusiasts who hope to shake the finance world in the 2010s with the generation of peer-to-peer movie swappers who challenged the entertainment industry's business model in the 2000s.
"Movie pirates always win the long game against Hollywood," he said. "Bitcoin works the same way."
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Bitcoin hacker currency bursts into mainstream - Yahoo! News

VisuTrac · Apr 10, 2013

Yes, but geeky geeks have know about it for years.

Yard Dart · Apr 10, 2013

Nobody has answered yet my earlier question- what makes the Bitcoin different post-SHTF and you can not access the internet, just as the stock's you may hold. Is there a benefit over PM's or is this more of a pre-SHTF method of avoiding the US or other countries currency? Legitimate question I think- may be wrong but please school me...

VisuTrac · Apr 10, 2013

Let me give it a whirl.

BitCoin can be stored on a memorychip, written on a piece of paper, or memorized. You get your hands on a computer and you are back in bizness .. If there is at least a few miners still running on the internet or fragments thereof in a mesh you are good to go. The block chain is distributed globally and reconcile ledger entries.

But, Post SHTF .. internet down, banking system in disarray, globally. Key is globally, yep, it's probably worth less than the device holding your electronic wallet, even if it were worth hundreds or maybe thousands of dollars.

I look at Bitcoin as a super high risk venture if you are a speculator. Today, I lost nearly 2k on it, but that was just a paper loss from it's highest recorded value. To me, no big as my cost basis is zero as I recouped my initial investment in the form of purchasing Night Vision and Encryption gear with it well over a month ago.

BitCoin is NOT for those that watch the daily, hourly or minute changes. You'll go mad.

But, post apocalyptic, internet down, banks dry, bitcoin will be worth pretty much nothing. It's just a means to get other stuff if you can stomach the risk

Oh you can also buy PM's with BitCoin if you find the right trader. BitCoin has a value only if a seller and a willing buyer agree on said value. It's just High Tech Bartering my friend.

Yard Dart · Apr 10, 2013

VisuTrac said: ↑

Let me give it a whirl.

BitCoin can be stored on a memorychip, written on a piece of paper, or memorized. You get your hands on a computer and you are back in bizness .. If there is at least a few miners still running on the internet or fragments thereof in a mesh you are good to go. The block chain is distributed globally and reconcile ledger entries.

But, Post SHTF .. internet down, banking system in disarray, globally. Key is globally, yep, it's probably worth less than the device holding your electronic wallet, even if it were worth hundreds or maybe thousands of dollars.

I look at Bitcoin as a super high risk venture if you are a speculator. Today, I lost nearly 2k on it, but that was just a paper loss from it's highest recorded value. To me, no big as my cost basis is zero as I recouped my initial investment in the form of purchasing Night Vision and Encryption gear with it.

BitCoin is NOT for those that watch the daily, hourly or minute changes. You'll go mad.

But, post apocalyptic, internet down, banks dry, bitcoin will be worth pretty much nothing. It's just a means to get other stuff if you can stomach the risk

Oh you can also buy PM's with BitCoin if you find the right trader. BitCoin has a value only if a seller and a willing buyer agree on said value. It's just High Tech Bartering my friend.
Click to expand...

That is what I thought, essentially a bartering tool for things, services and currency protection in general. I understand stocks and speculation well and the potential value of Bitcoin, just wanted to understand better the limitations if things go bad. Thanks @VisuTrac!!

VisuTrac · Apr 10, 2013

Looking at the evidence of todays wild ride, I'm thinking that a number of individuals were unable to get to MtGox .. the major exchange for BitCoin at the moment. Those that could started selling, but were unable to complete the transaction at their prices, they wanted to either take some profit out of their positions but when were unable to started to panic. Lowering their sell prices until transaction went through.

Looking at the Volume, Total transactions really don't support a wide spread sell off. It was maybe 20-25% higher volume than a typical day. So to me, meh. Just another day.

Euro Based transactions were substantially higher than normal. maybe 100 - 150%. But considering that USD based transactions make up the bulk, I'm surmizing that the europeans blinked.

Price is now rising. What does that mean? Not a damn thing to most people.

This is basically the Wild West. And if one doesn't have their base preps in place, one bad trade in BitCoin can make you very very sad. Once you click the button to sell or buy or trade. It's done. There is no bank or regulatory system or credit card provider to call to undo it. It's irreversable.

a couple of days ago, I saw a trade on an exchange were someone sold 152 bitcoins for 1.00 each for a total of 152.00 USD. Actually, they were worth, 30,400.00USD. You click that button, it's done. No recourse for the seller. They set the price and said submit. Done.

Not for the faint of heart nor those that don't know what they are doing.

BitCoin does not come with warning labels about the contents of the coffee cup being scalding hot, nor those about not using plastic bags as a childs toy, not even that there is an airbag in the steering wheel that explodes on collision and may seriously injury or kill you.

No training wheels here folks, we toss you out of the plane, and you'd better figure out how to get the parachute on and deployed as the ground is coming up fast.

My 2 Satoshis ( 1/100 000 000th of a BitCoin, yes it's divisible that small .. try to do that with a dollar)

Mindgrinder · Apr 12, 2013

1's and 0's.
Just like "intellectual Property".
It's worthless.

mysterymet · Apr 12, 2013

I think I'll just stick to my original plan of buying PMs with cash.

Cruisin Sloth · Apr 12, 2013

Stumbled over this :
Bitcoin bubble may have burst - Apr. 12, 2013

Back 2 work

Mindgrinder · Apr 12, 2013

Beano · Apr 12, 2013

Hazmat54 · Apr 13, 2013

It sounds like an electronic medium of exchange. Not a store of value. Don't really have my head around it yet. On the other hand, the dollar is pretty much an electronic medium of exchange. At the moment the physical currency has value, can be exchanged for real goods. That might change in the future. We might be looking at the future of value exchange. Solely electronic, and not under the control of any government. Governments should probably fear the widespread adoption of Bitcoin.

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Bitcoin Exchange Bombarded By Another Massive Cyber Attack

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Bitcoin Exchange Bombarded By Another Massive Cyber Attack

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