Bitcoin Price Tumbles Over %50 In Six Days On News Of Bugs, Exchange Glitches and DDoS Attacks

bitcoin_falls

Important Announcement: In order for our team to resolve the BTC withdrawal issue it is necessary for a temporary pause on all external bitcoin withdrawal requests in order to obtain a clear technical view of the current processes. We have updated our statement on this matter HERE. The MtGox trading platform, deposits, and withdrawals will perform as usual for the needs of our customers.
Dear MtGox Customers and Bitcoiners,

As you are aware, the MtGox team has been working hard to address an issue with the way that bitcoin withdrawals are processed. By “bitcoin withdrawal” we are referring to transactions from a MtGox bitcoin wallet to an external bitcoin address. Bitcoin transactions to any MtGox bitcoin address, and currency withdrawals (Yen, Euro, etc) are not affected by this issue.

The problem we have identified is not limited to MtGox, and affects all transactions where Bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved.

Addressing Transaction Malleability
MtGox has detected unusual activity on its Bitcoin wallets and performed investigations during the past weeks. This confirmed the presence of transactions which need to be examined more closely.

Non-technical Explanation:
A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin 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. MtGox is working with the Bitcoin core development team and others to mitigate this issue.

Technical Explanation:
Bitcoin transactions are subject to a design issue that has been largely ignored, while known to at least a part of the Bitcoin core developers and mentioned on the BitcoinTalk forums. This defect, known as “transaction malleability” makes it possible for a third party to alter the hash of any freshly issued transaction without invalidating the signature, hence resulting in a similar transaction under a different hash. Of course only one of the two transactions can be validated. However, if the party who altered the transaction is fast enough, for example with a direct connection to different mining pools, or has even a small amount of mining power, it can easily cause the transaction hash alteration to be committed to the blockchain.

The bitcoin api “sendtoaddress” broadly used to send bitcoins to a given bitcoin address will return a transaction hash as a way to track the transaction’s insertion in the blockchain.
Most wallet and exchange services will keep a record of this said hash in order to be able to respond to users should they inquire about their transaction. It is likely that these services will assume the transaction was not sent if it doesn’t appear in the blockchain with the original hash and have currently no means to recognize the alternative transactions as theirs in an efficient way.

This means that an individual could request bitcoins from an exchange or wallet service, alter the resulting transaction’s hash before inclusion in the blockchain, then contact the issuing service while claiming the transaction did not proceed. If the alteration fails, the user can simply send the bitcoins back and try again until successful.

We believe this can be addressed by using a different hash for transaction tracking purposes. While the network will continue to use the current hash for the purpose of inclusion in each block’s Merkle Tree, the new hash’s purpose will be to track a given transaction and can be computed and indexed by hashing the exact signed string via SHA256 (in the same way transactions are currently hashed).

This new transaction hash will allow signing parties to keep track of any transaction they have signed and can easily be computed, even for past transactions.

We have discussed this solution with the Bitcoin core developers and will allow Bitcoin withdrawals again once it has been approved and standardized.

In the meantime, exchanges and wallet services – and any service sending coins directly to third parties – should be extremely careful with anyone claiming their transaction did not go through.

Note that this will also affect any other crypto-currency using the same transaction scheme as Bitcoin.

Conclusion
To put things in perspective, it’s important to remember that Bitcoin is a very new technology and still very much in its early stages. What MtGox and the Bitcoin community have experienced in the past year has been an incredible and exciting challenge, and there is still much to do to further improve.

MtGox will resume bitcoin withdrawals to outside wallets once the issue outlined above has been properly addressed in a manner that will best serve our customers.

More information on the status of this issue will be released as soon as possible.

We thank you for taking the time to read this, and especially for your patience.

Best Regards,
MtGox Team

More Bitcoin Exchanges Forced Out of Sync After Massive DDoS Attack
http://it.slashdot.org/story/14/02/12/1559233/more-bitcoin-exchanges-forced-out-of-sync-after-massive-ddos-attack
An anonymous reader tipped us to news that several Bitcoin exchanges have joined Mt Gox in suspending withdrawals after being forced out of sync with the Bitcoin network at large. After Mt Gox blamed transaction malleability for forcing them to suspend withdrawals, miscreants started flooding at least Bitpay and Btc-e with bogus transactions. Quoting the Bitcoin Foundation:
“Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions. This is exposing bugs in both the reference implementation and some exchange’s software. We (core dev team, developers at the exchanges, and even big mining pools) are creating workarounds and fixes right now. This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming. It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds. “

Federal Judge Declares Bitcoin a Currency

Federal Judge Declares Bitcoin a Currency
from the i-bet-the-IRS-just-got-excited dept.
tlhIngan writes
An East Texas federal judge has concluded that Bitcoin is a currency that can be regulated under American Law. The conclusion came during the trial of Trendon Shavers, who is accused of running the Bitcoin Savings and Trust (BTCST) as a Ponzi scheme. Shavers had argued that since the transactions were all done in Bitcoins, no money changed hands and thus the SEC has no jurisdiction. The judge found that since Bitcoins may be used to purchase goods and services, and more importantly, can be converted to conventional currencies, it is a form of currency (PDF) and investors wishing to invest in the BTCST provided an investment of money, and thus the SEC may regulate such business.

Less than 30 Minutes to Return of Bitcoin Trading on MtGox.com

Less than 30 Minutes to Return of Bitcoin Trading on MtGox.com

This message is posted on the MtGox.com website:

Trading is halted until 2013-04-12 02:00am UTC to allow the market to cooldown following the drop in price. Read more details on the support. Additionally trading fees will not be charged within 48 hours of trading resuming (until 2013-04-14 02:00am UTC).

 

There is massive speculation on the #mtgoxlive IRC chat channel as to whether the price will rise or fall at the start of trading.

Bitcoin Trading Falls By %25 to $202 from $266 Within Hours

Bitcoin Trading Falls By %25 to $202 from $266 Within Hours

On the morning of April 10, 2013 Bitcoin lost %25 of its value within hours.  This was an expected market correction and should continue to fall thru the day.

MtGox Bitcoin Trading falls %25 to $202 on April 10, 2013

MtGox Bitcoin Trading falls %25 to $202 on April 10, 2013

MtGox.com Trading Exchange

BTC-E.com Trading Exchange

 

*UPDATE 11:21AM PST

MtGox price is now $173, only MtGox orders are NOT going thru without major delay.

BTC-e $136

 

*UPDATE 11:21AM PST EXCHANGES HAVE CRASHED, orders will not go thru, MtGox Lag is 76 MINUTES!!!!!

BitCoin Massive Correction April 10, 2013

BitCoin Massive Correction April 10, 2013

 

 

 

 

 

 

 

*UPDATE 1:30pm PST

MtGox.com is now back online and trading.

Bitcoin Trading Crashes To $38 After .7 .8 Block Chain Fork Bug Announced

Bitcoin Trading Crashes To $38 After .7 .8 Block Chain Fork Bug Announced

Today Bitcoin BTC$ crashed to $38 from $48 following news that a block chain fork has occurred. According to realtime chat on the official Mt.Gox Chat Room, the bug occurred after the .8 Bitcoin software version was released. For more information stay tuned….

Read all about it here! https://bitcointalk.org/index.php?topic=152030.0

MtGox.com has issued a statement stating :
Bitcoin blockchain issue – bitcoin deposits temporarily suspended
https://support.mtgox.com/entries/21477395-Bitcoin-blockchain-issue-bitcoin-deposits-temporarily-suspended

Bitcoin falls to $38 after block chain fork bug announced

Bitcoin falls to $38 after block chain fork bug announced