Bitcoin bug causes massive sell-off
10 February 2014 | 16118 views | 7
A bug in the bitcoin software that makes it possible to alter transaction details over the network has caused panic-selling among holders of the crypto-currency, sending prices crashing below the $600 mark on Monday morning.
Japan-based bitcoin exchange MT Gox last week suspended bitcoin transactions while it investigated technical problems that had emerged during an increase in withdrawal requests.
In an update today, the exchange says a bug in the bitcoin software makes it possible for someone to use the network to alter transaction details to make it seem like a sending of coins to a wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent.
MT Gox says it is working with the Bitcoin core development team and others to mitigate this issue.
"The problem we have identified is not limited to MT Gox, and affects all transactions where Bitcoins are being sent to a third party."
MT Gox has advised other exchanges and wallet services - and any service sending coins directly to third parties - to be "extremely careful" with anyone claiming their transaction did not go through.
News of a flaw in the bitcoin protocol which is being actively exploited has crashed the value of the crypto-currency, sending the price down to $539 per coin in early morning trading, way off last-year's year high of $1203.
MT Gox has not put a timescale on a fix, reminding users that "bitcoin is a very new technology and still very much in its early stages".