A massive cyber attack from unknown sources that has been spamming
bitcoin exchanges is highlighting some of the dangers people can
encounter when they exchange cash for digital currencies like the
bitcoin, experts said on Wednesday.
The attack, which is technically known as a distributed denial of
service attack, involved thousands of phantom transactions, forcing at
least three of the online platforms that store bitcoins and trade them
for traditional currencies to halt withdrawals of bitcoins until they
can determine which transactions were real.
It showed that bitcoin, which exists solely in cyberspace and
operates on a software code written by an unknown programmer or group of
programmers, is as vulnerable to such an assault as any other
Internet-based business. It exposes the higher risks involved in owning
and trading the instrument compared with the dollar and other
traditional currencies. Bitcoins slumped in value as a result of the
disruptions.
“Bitcoin is still an experimental protocol in its infancy,” said
Micky Malka, a venture capitalist who is on the board of Bitcoin’s trade
group, the Bitcoin Foundation.
“It will grow and mature over time,” he added. “No one should be investing an amount they cannot afford to lose.”
This week’s attack was not the first, said Andreas Antonopoulos,
chief security officer for blockchain.info, a website that tracks
bitcoin activity and provides online storage services for bitcoin users.
Antonopoulos is also a member of a group of core bitcoin programmers
and is part of an emergency response team of programmers who have been
working to fix the flaws in the code governing some bitcoin transactions
that the attackers were exploiting. He said that work that should be
completed by the middle of next week, echoing an estimate provided by a
spokeswoman for the Bitcoin Foundation who said its core developers were
all participating in the effort to fix the code.
Source : http://nypost.com/2014/02/14/cyber-attack-on-bitcoin-underscores-currencys-dangers/
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