Authentication & Security

Two Major Bitcoin Exchanges Halt all Withdrawals, Value Tumbles to $644

On 10th February 2014, the worlds largest Bitcoin exchange – Mt. Gox – announced that it would be halting all withdrawals indefinitely. On Tuesday, a second major Bitcoing exchange - Slovenia based Bitstamp – announced that they too would be stopping all withdrawals, citing “inconsistent results” and a Denial-of-Service (DoS) attack by hackers as the reason for doing so.

Bitcoin is being hit by attacks from unknown computer hackers who are sending "mutated" lines of code into the program that runs the virtual currency. The attacks are responsible for problems experienced by two Bitcoin exchanges that caused them to temporarily halt withdrawals by customers who stored Bitcoins in digital wallets provided by the exchanges,” stated the Bitcoin foundation.

"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 Bitcoins wallets or funds," said spokeswoman, Jinyoung Lee Englund. “A team of core software developers who focus on Bitcoin are working to fix the problem, but until it it solved some users will not be able to do anything with their Bitcoins, and the affected Bitcoins will appear to be "tied up" in transactions,” she added.

  • These developments have caused the value of Bitcoin to tumble down sharply. The price now (12th February, 2014) stands at $644. The virtual currency’s market cap reached $14.4 Bn at its peak during Mid-December.
  • On the back of these problems, New York's financial regulator revealed on 12th February 2014, new details on how the state plans to govern virtual currencies such as Bitcoin.
  • Recently, Russia’s Central Bank cracked down on the cyber-currency, banning Russian citizens and companies from using Bitcoin.

However...More and More People are beginning to Accept Bitcoin Payments:

On 24th December 2013, RBI issued a notice outlining the risks involved for people utilizing Bitcoins. Two days later, the Enforcement Directorate (ED) undertook the first Bitcoin raid in India.  Buysellbitco.in – stopped all operations on its platform. And so did other exchanges and portals as well. This however, does not seem to deter HighKart.com, India’s first online retailer to accept Bitcoin payments.

“As an e-commerce company, safe, simple and reliable payment solutions are important for our customers, and Bitcoin payment provides us with exactly this. Bitcoin’s growing user base cannot be ignored. We’re proud that, from today, we’ll be the first e-commerce website in India able to accept Bitcoin payment.  It’s an exciting development for us and our customers,” said the company in a blog statement.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

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