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Bitcoin Hit By 'Massive' DDoS Attack As Tensions Rise

Feb 12 2014, 6:46am CST | by

Bitcoin Hit By 'Massive' DDoS Attack As Tensions Rise
 
 

A “massive” distributed denial of service (DDoS) attack is hitting Bitcoin, according to trading venues, in what has been a tense week over alleged flaws in the various systems run by the virtual currency and its exchanges.

The attack picks on the very area – transaction malleability, or the potential renaming of transaction messages –  that has become a bone of contention between different venues, and is blocking some transactions from being confirmed.

The value of Bitcoin has fallen dramatically in recent days. Earlier this week, Japanese exchange Mt Gox stopped trading, blaming transaction malleability issues in Bitcoin’s systems that purportedly allow traders to pretend a withdrawal has not gone through, and to receive the currency a second time.

The Bitcoin Foundation issued a swift rebuttal to Mt Gox’s claims, insisting the exchange was to blame, and that the malleability issue had been known for some time. On Reddit , numerous commenters questioned the viability of Mt Gox’s code. Mt Gox had not responded to a request for comment at the time of writing.

[For more on the dispute between Bitcoin Foundation and Mt Gox, read here ]

The DDoS attack, detected yesterday, directly targets the malleability issue and is preventing some transactions from being confirmed. It has prompted exchanges Blockchain and Bitstamp to halt Bitcoin trading, a block that is still in place at the time of writing. Other exchanges have not stopped trading but have warned of transaction confirmation delays.

Andreas Antonopoulos, Blockchain’s chief security officer, has told the Coinbase site that the attack was “massive and concerted”, with parallel transactions being executed to create a “fog of confusion” around the currency.  Meanwhile, Bitstamp said in a statement that the attack was using transaction malleability “to temporarily disrupt balance checking”.

Bitcoin exchanges and the  Foundation itself have begun a concerted effort to fix the problem and get things back to normal. Gavin Andresen, chief scientist at the Bitcoin Foundation, said in a statement that traders should “rest assured that we have identified the issue and are collectively and collaboratively working on a solution”.

Andresen explained there were bugs in both the main Bitcoin software and in that of exchanges, leading to the problem.

“This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming,” he added. “It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds.”

The value of Bitcoins have almost halved in recent weeks, but is likely to stage somewhat of a recovery when the issues are tackled. At the time of writing, popular currency site XE.com lists Bitcoin at a relative low of $528, below the $691 value before Mt Gox’s claims, and almost down to half of the $1,000 peak hit a number of times between November and January.

Interested in this story? Follow me (at the top) for more breaking news and in-depth analysis, affecting CIOs and business decision makers. Please do share your thoughts on the topic below.

Source: Forbes

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

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