--> Devnullius's Choices: A list of default programs to keep your PC running well!
0 Members and 2 Guests are viewing this topic.
Price Drops as Mt. Gox Blames Bitcoin Flaw for Withdrawal DelaysNermin Hajdarbegovic | Published on February 10, 2014 at 11:05 GMT | Exchanges, Mt. Gox, Pricescoindesk-price-fallMt. Gox has issued a statement in an effort to address concerns raised by users after it suspended bitcoin withdrawals late last week. The exchange insists it is working hard to address a technical issue that has made it impossible for users to make transfers.The company also points out that currency withdrawals and transfers to any Mt. Gox address are not affected by the issue.Mt. Gox stressed that the problem is not limited to its exchange – it affects all transactions where bitcoins are sent to a third party. Once the problem was identified, Mt. Gox chose to suspend bitcoin withdrawals until it can be resolved.Geeky and non-geeky explanationMt. Gox offered two explanations for laymen and tech-savvy users. In essence, Mt. Gox says it identified a bug in the Bitcoin software that makes it possible for someone to use the network to alter transaction details, making it seem like bitcoins had not been sent to a bitcoin wallet, when in fact they had.“Since the transaction appears as if it has not proceeded correctly, the bitcoins may be re-sent. Mt. Gox is working with the Bitcoin core development team and others to mitigate this issue,” Mt. Gox said.The technical explanation is a lot more detailed.It points out that bitcoin transactions are subject to a design flaw that has been largely ingored, although it was known to “at least a part” of the Bitcoin core development community. The defect is known as “transaction malleability” and it allows third parties to alter the hash of a fresh transaction without invalidating the signature. Mt. Gox explains:“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 “sendtoaddress” API returns a transaction hash as a way to track the insertion of the transaction into the block chain. Since most wallet and exchange services keep a record of this in order to respond to users who make inquiries about their transactions, they could assume that the transaction was not sent – as it would not appear in the block chain with the original hash. For the time being, there is no way of efficiently recognizing alternative transactions.“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.”Working on a fixMt. Gox believes the problem can be addressed by using a different hash for transaction tracking purposes. The network would continue to employ the current hash for the purpose of including the transaction in each block’s Merkle Tree, while the new hash would be used to track transactions and it could be computed and indexed by hashing the exact signed string via SHA 256, the same way transactions are 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,” Mt. Gox said. “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 Mt. Gox is urging exchanges and wallet services, as well as any other service that sends bitcoins directly to third parties, to be “extremely careful” with anyone claiming their transaction did not go through. The issue also affects altcoins using the same transaction scheme as Bitcoin.The exchange says it will try to resume withdrawals as soon as possible:“Mt. Gox 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.”Mt. Gox also noted that more information on the status of the issue will be released as soon as it is available – but for now users will not be able to make bitcoin withdrawals. The fix can’t come soon enough, as the problems have caused a selling frenzy in some circles.Price fallSince the announcement was published, the price of bitcoin has witnessed a steep decline. The CoinDesk Bitcoin Price Index shows a sharp fall from $681 at 10:00 (GMT) to $572 at the time of writing.coindesk-bpi-chartThe last time the price dropped to this level was on December 19th, shortly after China’s central bank met with third-party payment companies and banned them from doing business with bitcoin exchanges.This news caused bitcoiners across the globe to panic sell their collections of the digital currency, but the price drop didn’t last for long – it increased to $770 by the end of the year.
Bitcoin price plunges: Mt. Gox suspends withdrawals, says flaw in protocol allows fraudBy Tim Hornyak, IDG News Service Feb 10, 2014 6:24 AM printBitcoin software has a bug that allows fraud, Tokyo-based bitcoin exchange Mt. Gox said Monday. The news was followed by a new fall in the value of the digital currency.Mt. Gox said it will continue its suspension of bitcoin transfers from wallets it holds to external bitcoin addresses, announced Friday, while it works to resolve the problem.Conversions of bitcoins to conventional currencies and bitcoin transfers to other Mt. Gox addresses are not affected.“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,” Mt. Gox said in a statement.“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.”"Mt. Gox had said its investigation had been triggered by “unusual activity” detected in its Bitcoin wallets."The flaw, called “transaction malleability,” is already known to some of the core Bitcoin software developers, Mt. Gox said. It allows a third party to alter the hash associated with a freshly issued transaction without invalidating its signature, resulting in two similar transactions, only one of which can ultimately be validated and included in the log of Bitcoin transactions called the blockchain.An attacker with access to sufficient computing power could ensure that the modified transaction is included, and the original rejected. With current Bitcoin applications, it is easy to determine that the original transaction failed, but much less obvious that a modified transaction succeeded, Mt. Gox said.“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,” the exchange warned.Mt. Gox had said its investigation had been triggered by “unusual activity” detected in its Bitcoin wallets.It added that the problem is not limited to the exchange, and affects all transactions in which bitcoins are sent to a third party.The company did not immediately respond to calls or emails requesting further information..The digital currency fell as low as $535 late Monday Japan time before recovering to $636.37 at press time, according to CoinDesk, which publishes an average of the prices at several coin exchanges. It had been trading around $850 for much of last week before diving to $750 on Friday.Mt. Gox had said Friday it was putting withdrawals to external bitcoin addresses on hold due to unspecified problems linked to an uptick in withdrawal requests.As one the most popular places to buy and sell bitcoins, Mt. Gox has seen its dominance decline over the last year with the rise of competitors including BTC China, Bitstamp and BTC-e.Mt. Gox has long experienced banking problems that have caused lengthy delays in the processing of overseas wire transfers.Update: Several commenters suggest that Mt Gox's claims about the Bitcoin protocol's flaw are somewhat misleading. This technical article by Cryptocoins News provides some counterpoints.
...Price fallSince the announcement was published, the price of bitcoin has witnessed a steep decline. The CoinDesk Bitcoin Price Index shows a sharp fall from $681 at 10:00 (GMT) to $572 at the time of writing....
I'm thinking Mt. Gox was the bug. Their antiquated technology mostly. Mt. Gox's failure to deliver in a timely manner led to a less respectable overall BTC market with reputable exchanges having a 10%+ price difference.After this shakeout Bitcoin will be stronger with a lower spread in BTC prices.
With Quick-Reply you can write a post when viewing a topic without loading a new page. You can still use bulletin board code and smileys as you would in a normal post.
Terms of Use | Privacy Policy | Advertising
Total Members: 14176
