Tuesday, February 11, 2014
Bitcoin Crashes, Withdrawals Frozen
There were whispers of uncertainties about Bitcoin even when they were soaring, there are a hint of doubts. However, some people who wants to get rich quick disregard the red flags and were too eager to jump to invest in the cryptocurrency.
The bitcoin crashed, which is its 3rd in recent months, that leaves investors wondering if this is the end of the once promising currency.
The crash was a result of an oversight made by Tokyo based MtGox, which is the largest exchange. They allowed bitcoins to be traded for traditional currency. Then they hold the accounts of all its customers and stop their operations when the company discovered an unfortunate glitch.
MtGox said in a statement: “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.”
Which means the bug permit someone to get additional bitcoin currency and it may be use to exploit the system for fraud. They also said that the flaw in the bitcoin standard allowed fraudulent cancellations of completed transactions.
The currency value dropped by 20%. After hanging in the range of $900 to $1,000 for most of 2014, Bitcoin prices plummets to as low as $500 before recovering slightly to around $700 on Monday.