Apr 4, 2013

Bitcoin Price Drops After DDoS Attack on Mt. Gox

The price of bitcoin dropped from an all time high of $147 on Wednesday to $132 after the largest bitcoin exchange, Mt. Gox, reported that they were the victims of a distributed denial of service attack that caused major slowing of their servers.

CNBC reported on the story calling the attack a "hacking" attack, but we all know that DDoS isn't really hacking. Anyway, this is from CNBC:

Online currency bitcoin had 20 percent knocked off its price overnight on Thursday as one of its major exchanges became the victim of a hacking attack leading to a sell-off in the virtual currency after reaching an all-time high. 
...The most popular bitcoin exchange, Tokyo-based Mt.Gox announced overnight that it had been the victim of a hacking attack after experiencing a severe lag with its systems. The complications meant the price quickly sank to below $115 before regaining ground to $130 by 6.00 a.m. London time on Thursday, according to Bitcoincharts.com.
I still can't stop laughing when I read the part about a "hacking attack". Seriously, performing a denial of service doesn't take much skill, and certainly shouldn't qualify as hacking.

If you are not familiar with Bitcoin, we talked about it the following episode of Tech Chop:

Last week we also wrote about a man who was trying to sell his Canadian property for around $405,000 worth of Bitcoins.

This is not the first attack against Bitcoin this week. Instawallet was hacked and has sense suspended their service indefinitely. From their page:

The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture. 
Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is. 
In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption.
What do you think of these attacks? Does this lower your confidence in this new currency? Why or why not? Let us know in the comments.

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