Bitcoin Plunges In Value As Hackers Spook Market

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The unpredictable progress of Bitcoin hit another downward spiral as more crooked dealings were revealed.

Bitcoin hit a two-year high of around $775 just a few days ago and then plunged by 25% after a major exchange went offline after an attack by hackers.

Investor confidence was badly shaken when an estimated $50 million of the virtual currency was siphoned from platform Decentralized Autonomous Organization (DAO).

The DAO funds projects with Bitcoin.

The organisation has gone offline while software engineers identify and rectify security flaws in the system, which is not directly linked to the Bitcoin blockchain database.

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Cyber attack on exchange

“The cyber-attack was identified and we had to stop trading temporarily,” said spokesman Vitalik Buterin.

Efforts are underway to try to recover investor funds from the hacker.

Several online Bitcoin repositories or exchanges have lost millions of dollars in funds either to hackers or internal frauds.

The ability of criminals to target Bitcoin despite blockchain security has seriously affected the value of the virtual currency.

Another trader, Bitfinex also stopped trading this week claiming ‘network instability’ was putting customer funds at risk.

Betfinex advertises itself as the ‘world’s largest and most advanced cryptocurrencies exchange’.

The company stopped trading at least twice this week, citing infrastructure issues as the problem and confirming no money was lost or at risk.

Security fears

Bitcoin is a virtual currency that only exists in electronic vaults on the internet. Sophisticated security provided by software called a blockchain protects money held by traders and investors.

Many Bitcoin users are concerned about the security of their holdings after several exchanges failed with the loss of millions of dollar’s worth of the currency.

The most significant was Japan’s Mt Gox exchange which went down in February 2014 blaming technical issues. It was later revealed that hackers had stolen Bitcoin worth millions, forcing the company into bankruptcy.

The Mt Gox experience is why so hacking incidents spook the Bitcoin community so much.

Bitcoin is not regulated by any central bank or government. The value is determined by demand and supply. In a few days, supply is expected to fall as the software puts a scheduled built-in brake on generating new Bitcoin. The reduction or ‘halving’ is expected to increase the value of the virtual currency.

43 COMMENTS

  1. How many errors can you cram into one article?

    “Bitcoin hit a two-year high of around $775 just a few days ago…” — That was a month ago.

    “…and then plunged by 25% after a major exchange went offline after an attack by hackers.” — There was no attack, the exchange in question had computer problems.

    “The DAO funds projects with Bitcoin” — No, TheDao funds projects with Ether.

    “The ability of criminals to target Bitcoin despite blockchain security has seriously affected the value of the virtual currency.” — Blockchain security secures the Blockchain. It doesn’t secure bitcoin. People holding bitcoin have to secure it themselves. Like the ECB will do its best to make euro banknotes difficult to forge. But securing your wallet with euros doesn’t get stolen is your own job.

    “Bitcoin is a virtual currency that only exists in electronic vaults on the internet.” — There are no electronic vaults with bitcoin. Bitcoin is accounted for on a world wide ledger, which is cryptographically secured.

    “Many Bitcoin users are concerned about the security of their holdings after several exchanges failed with the loss of millions of dollar’s worth of the currency.” — Only Bitcoin users who let others hold custody over their bitcoin may worry about that. Those who hold their bitcoin themselves, don’t worry.

    Stop writing non-sense!

  2. The DAO is not on bitcoin blockchain. What kind of journalism is this? Did you do any research at all? DAO= Ethereum! For the love of god!

  3. “The DAO funds projects with Bitcoin.”

    This is FALSE! What kind of shoddy journalism is this Steven Wilson? Did you even bother to do any research or fact checking on this article at all?!

    The DAO and the attack on it had NOTHING to do with Bitcoin. The DAO is funded by an alternative cryptocurrency called Ethereum of which Vitalik Buterin is the found of that particular cryptocurrency. The attack in this case was due to faulty coding of the “smart contract” for that DAO.

    This had no effect on Bitcoin other than demonstrating that Bitcoin’s underlying code and blockchain is far superior and more secure than any other cryptocurrency.

  4. The DAO runs on Ethereum not Bitcoin. They are two totally different types of crypto currency and have nothing to do with each other. You really should do your research before posting an article like this, Steven. #ignoranceisbliss

  5. The DAO funds projects with Bitcoin? Hahahahahaha. GET your facts straight! DAO funds projects with ETH. DAO has nothing to do with Bitcoin. NOTHING!!! What a worthless article. If I were your boss, Steven Wilson, you will be fired on the spot.

  6. Worst written article I have ever read on the current state of btc. Bitcoin is in no way involved with the hack that took place on the DAO smart contract running on Ethereum. Millions of dollars Ethereum. We’re stolen, no bitcoins were involved at all. You also talk about the DAO hacking as if it was an exchange that got hacked. It is not, it is a smart contract running on ethereum. The hackers were able to trick the DAO into sending ether fron it to a fake malicious copy of the DAO made by the hackers. No research was done at all before this article was written .

  7. Wow. No fewer than 5 seriously inaccurate statements in this article beginning with your title. Bitcoin prices are actually up considerably this month. Author is obviously not qualified to write on this subject. Or, just didn’t research anything he wrote.

  8. Sorry Steve, a very bad example of journalism. Or let’s say.. A very good example for bad journalism.
    The Decentralized Autonomous Organization has nothing to do with Bitcoin. It does NOT fund projects with Bitcoin.

    The article really shows that you have no clue about blockchain technology. I would suggest that you stick to legacy fiat money until you did your homework on blockchain technology.

  9. Bitcoin was not affected by ” crooked dealings” or anything else for that matter. The Bitcoin core protocol has NEVER in its entire history been affected by any hacker attack. Get your facts straight!!

  10. This story is so riddled with errors I don’t even know WHERE to Begin.

    OK, let’s start with the DAO ‘hack’.. DAO, short for a distributed autonomous organization, is a SMART contract, based on ETHEREUM, and *NOT* Bitcoin.

    Further, there was no hack of any ‘Exchange’.,.. Both ETHEREUM and Bitcoin tokens have had no chink in their Armor.

    However, Smart Contacts, which are an integral use of ETHEREUM, when poorly written, allowed a bug (2 actually) to be exploited and the ‘hack’ locked up a substantial amount of DAO tokens, which will not be released to the ‘hack’ until mid-july.. and the community and programmers are currently authoring a ‘fix’ to the bugs, code. And ‘stolen’ tokens.

    Note, BITCOIN is not involved in ANY of this mess.

    If you have any interest in blickchain ledgers or the technology behind them, there are several resources available.

  11. My gawd what an imbecile. Like a political reporter saying “Hillary Clinton wants to build a wall.”

  12. In addition to all the errors people already pointed out, this one is obvious even to people with no knowledge of the story:

    “Bitfinex [claimed] ‘network instability’ was putting customer funds at risk”
    “[…] confirming no money was […] at risk”

    Did they claim funds were at risk or not? You wrote two contradictory sentences about this.

    Also, you called them “Betfinex” in one place. It’s “bit” not “bet”.

  13. Research the topic you write about before putting this garbage out into the universe. Have some integrity as a journalist

  14. This is some of the most lame reporting on record. You have next to no idea what bitcoin is and what the dao represents. Please change careers…

  15. At this point, nine hours after publication, I don’t blame the author anymore — Moneyinternational hasn’t changed a word in its factually-wrong headline. And presumably this piece went through some kind of editorial fact-check.

    The entire mag is either a fictional operation, satire or a phishing expedition. Right now its lead headlines include “Singapore is World’s Most Expensive Place to Live”, followed two articles down by “Kinshasa is World’s Most Expensive Place to Live.”

    Careful — they could be phishing for Bitcoin wallets via email addresses at the comments sign-in.

  16. Careful folks, all is not what it seems here on comments. I’m being moderated out but think deeply…

  17. Perhaps the author was tired. Has he followed Bitcoin closely? I doubt it. Save the tech pieces for the pros. Ha ha.

  18. Wow, ive read some non-sense in my time, but this is hands down the most ridiculous and foolish piece ever written on crypto. Shocking that someone could be so wrong on so many levels.

    I bet this article is taken down within the next 24 hours.

    The writer should be immediately fired

  19. Steven Wilson is clearly trying to wind people up with this article, as it cannot be serious, it is full of complete inaccuracies.

    Just look at the other posts here, if this is a genuine article this guy is an absolute idiot and should be fired.

  20. I’m editor-in-chief of a well-known tax publication, and I also contribute regularly to tax blogs for a host of industry-specific websites. My expertise lies in American tax issues and policy and I have reported and the repercussions of US federal tax law both in the States and further afield. I am British but have been living in Philadelphia for 14 years now. I have a First Class Honours Bachelors Degree in Tax Law from the Queen Mary University of London. In my spare time I adore reading, and a variety of American sports, and I smoke things that are best left unnamed.

  21. This article needs to be removed. There is zero fact-checking done on this piece, and as a result, this distorts the information available to the public Bitcoin.

    This is the definition of irresponsible journalism and it is egregious.

  22. Don’t panic, dear readers. They’ve caught the chimp and locked the office with the typewriter. Articles will now go back to normal.

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