The large Japanese Bitcoin trading platform Mt.Gox has been going through some tough times recently. They have experienced problems, along with a few other Bitcoin exchanges like Bitstamp, which they claim are caused by a “transaction malleability” issue with the Bitcoin blockchain. Since the problem occurred other exchanges have been affected by DDoS attacks as fraudsters attempt to capitalise on the malleability vulnerability, BTC-e and Bitstamp both experienced major DDoS attacks. As of today Mt.Gox claims they have figured out a workaround for the problem. The solution is that they will use a unique identifier created by the blockchain to show whether transactions have been modified or not.
The good news for Bitcoin traders is that Mt.Gox expects a solution to be put into place “soon”, though they did not specify an exact time or date. Once transactions are resumed they will be limited, most likely to prevent mass withdrawals, and eventually things will return to normal. Mt.Gox says it will be implementing the following steps for the launch of the new system
- Re-indexing the entire Blockchain (approx. 32 million entries)
- Fully deploying the new NTX ID
- Implementing a new bitcoin withdrawal queue that needs to be tested
For those who do not know the price of Bitcoin has been plummeting on Mt.Gox since they halted withdrawals. A few other exchanges took similar steps but none have seen such a dramatic drop in price, as shown in the above graph. Since February 6th the price of Bitcoin has dropped from $950 to $300 on Mt.Gox. For speculative buyers now seems like a great time to buy as the price of Bitcoin on other exchanges is almost twice as high… what’s your take on the Mt.Gox scenario?
Image courtesy of Bitcoin Wisdom