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back to article MtGox fallout bogs down Bitcoin traders as malleability issue goes mainstream

BitCoin service providers are scrambling to fix their systems and address flaws as a mass of traffic has been spotted targeting the "transaction malleability" loophole which has been connected to the embattled MtGox exchange. Bitcoin information service/CoinDesk is reporting distributed denial of service (DDoS) slowdowns on a …

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hmm

What would worry me if I actually owned any BitCoins is not this exchange implementation issue per say but the fact that it caused the currency to fall more than %20 in a just a few hours. First world currencies don't do this. The volatility is hurting BitCoin probably more than anything else right now. Having to check the exchange rate minute by minute to keep from getting screwed is not something most merchants and people want to deal with.

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Re: hmm

That probably has a lot to do with the fact that most Bitcoins aren't in circulation, but are being held by early adopters. Compare that to traditional currencies, where well over 100% of outstanding money is in circulation at once (due to fractional reserve banking) which tends to minimize such large swings in value.

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Re: hmm

Granted I am far from some economics professor but long term liquidity matters especially for a currency I would assume. This really seems to be a reoccuring Achilles heel for BitCoin.

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Trollface

Re: hmm

Can't resist. Oh well you can always trade your BitCoins for heroin which seems to be a lot easier to sell with less red tape lol.

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Joke

Re: hmm

Not really, price of Heroin tends to be on decline, year on year...

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Trollface

Re: hmm

It will go back up after the US quits borrowing money from China to protect the poppy farmers.

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Anonymous Coward

So, good time to invest?

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How do you say "All your bitcoins are belong to us" in Chinese?

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I'm going to start an exchange for bottlecaps. Bottlecaps are the new currency, anyone who's played Fallout will know it's a sound investment!

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Leave them attached to the bottles and you might be onto something.

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There's already an alternative cryptocurrency (out of the 100+ that are out there) called Bottlecaps, which is accepted on several exchanges :)

The real investment of the moment is Dogecoin, the value is up 80% in a week, and 750% over the past month or so. In terms of market capitalisation, it is currently in 3rd place behind Litecoin, and may catch it in the coming month or two. The average block reward (the amount of new coins given out when a block containing transaction data is successfully 'mined') is due to be halved by around the weekend, so the supply of new coins will fall, possibly driving the price up further - it depends how much of the current rise is driven by speculators expecting the price to double at the weekend, which it likely won't, IMO the bigger change will be in the mining difficulty falling in response as people switch to other coins. *

* None of the above constitutes financial advice in any shape or form whatsoever, etc. etc.

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Pump & dump.

Rinse & repeat.

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Anonymous Coward

So the BTC unique selling point has evaporated...

... Limited supply suddenly becomes unlimited because you can fake transactions over and over again.

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Re: So the BTC unique selling point has evaporated...

From what I have read this is a MtGOX stupidity. They should have been checking that there was a transaction with correct sender, recipient and amount instead they looked for a transaction with a particular hash. The hash is based on some data that is allowed to change so people were changing it at MtGOX were paying them again.

This still doesn't mean that Bitcoins have any real value. I watch from a safe distance.

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Re: So the BTC unique selling point has evaporated...

This loophole was fixed in the standard wallet client in 2011, it's down to MtGox using their own custom coded wallet software that they didn't bother to check it for this issue.

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Libertarians

So Libertarians, replace currency with gold and Bitcoins you say?

lol

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@asdf

What a silly thing to say. Do you not remember when the new york stock exchange ground to a halt and ceased trading. Any large exchange experiencing issues immediately affects the market. If you think about cryptocurrencies more like stocks as opposed to a spendable fiat currency you will be better set to understand what is happening.

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Re: @asdf

>Do you not remember when the new york stock exchange ground to a halt and ceased trading

The price of dollar sure didn't swing that much when this happened which proves my point BitCoins behave more like securities at this point than currency as you do say.

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