A bitcoin bug has prompted a swoon in the crypto-currency's price, though it has recovered after bottoming out on Monday.
Bitcoin, which had opened the day at $704, according to CoinDesk, fell to $538 before settling at $621.27 at press time:
The price activity comes after Mt. Gox, the second largest bitcoin exchange by volume, announced a glitch that caused it to suspend transfers from wallets to external bitcoin addresses. Mt. Gox offered this admittedly non-technical description of the problem in a press release on Monday:
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.
In its more tech-fluent explanation, Mt. Gox pointed to a flaw called "transaction malleability," which lets third parties alter the hash (string of characters) of any new transaction without invalidating the signature, resulting in two transactions -- one real and one fake. The exchange probed the issue after noticing "unusual activity" on bitcoin wallets over the past few weeks.
Mt. Gox told users that the glitch was basically a hiccup: "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."
Update:Andreas Antonopoulos, the chief security officer of Blockchain.info, told CoinDesk that a massive DDOS attack is hitting Mt. Gox and other bitcoin exchanges. However, Mt. Gox is "most affected" by the attacks so far.
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