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Bitcoin plunges as major exchange goes dark

  • The price of Bitcoin has plummeted 11.2% to $484.35 after one of its leading exchanges, Mt Gox, appeared to have disappeared amid speculation of a massive security breach and that it's about to go bankrupt.
  • Mt Gox's Web site was blank this morning and all its tweets have been deleted. Since the start of this month, customers had been unable to withdraw their bitcoins. On Sunday, CEO Mark Karpeles resigned from the board of the Bitcoin Foundation.
  • One rumor, based on a leaked document, is that 744,400 bitcoins worth $350M have been stolen from Mt Gox, or 6% of all bitcoins in existence.
  • Six other major bitcoin exchanges and businesses have said they'll work together to reassure customers about the security of their funds.
  • Meanwhile, security firm Trustwave yesterday said hundreds of thousands of computers have been infected with a virus called "Pony" that allows thieves to steal digital currencies such as bitcoins.
  • ETFs: BITCN, TUCND
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Comments (16)
  • The_Hammer
    , contributor
    Comments (4209) | Send Message
     
    gold silver
    anyone think the govt is hacking at these bitcoin sites discredit bitcoin?
    25 Feb 2014, 05:02 AM Reply Like
  • yreed
    , contributor
    Comments (7) | Send Message
     
    Govt doesn't need to hack the sites, they have enough guys doing it trying to get all of the bitcoins...so what happens when the value goes down to $1.00 a bitcoin? You think anyone will bother trying "mine" anymore? Wasn't it around $1,200 for just one coin? Kind of crazy how many sites have issues with keeping coins safe...stick to physical materials =) just IMO
    25 Feb 2014, 05:23 AM Reply Like
  • votingmachine
    , contributor
    Comments (380) | Send Message
     
    And miners are essential to the bitcoin. The "complex calculations" that miners perform is the encrypted transactions for each bitcoin. When a miner solves the transaction, it is passed around and if the majority of miners agree with the solution, the passed around public record is updated.

     

    Miners are the transaction enablers. Without miners, every bitcoin cannot be spent. And if there are not a pool of miners, then there is the risk that a small number can be the majority, and then they control the ownership of every bitcoin.

     

    Every bitcoin will eventually be worth zero. They are only worth something if they have transactional value. And when the miners stop mining there are no more transactions.
    25 Feb 2014, 05:57 PM Reply Like
  • mitrado
    , contributor
    Comments (2014) | Send Message
     
    "Every bitcoin will eventually be worth zero."

     

    I see a lot of people betting that will reach $1000 by the weekend.
    26 Feb 2014, 04:14 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (9156) | Send Message
     
    ...and the bitcoin suckers all laughed at those of us who hold, ACTUALLY HOLD, our gold and silver coins which are still valuable and available.

     

    What was it that P.T. Barnum said again?
    25 Feb 2014, 05:34 AM Reply Like
  • mitrado
    , contributor
    Comments (2014) | Send Message
     
    I bet the suckers who bought BitCoins a year ago are still laughing pretty hard.
    25 Feb 2014, 05:49 AM Reply Like
  • divtra
    , contributor
    Comments (147) | Send Message
     
    Well, if you stored your gold and silver at a bank which didn't realize
    1. they had Mr Spaulding digging under the storage vault
    2. didn't realize scammers could take out gold and then make up paperwork that it was not gone
    3. just had a crooked bank keeping the gold to themselves

     

    or a combination of all of the above

     

    then you would still be losing your gold.

     

    In other words, Bitcoin lost some value, but for those holding it in their own wallets, it is still valuable.

     

    BTC should be down for most of this year, but what happens after that is still up for grabs.
    25 Feb 2014, 07:38 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (9156) | Send Message
     
    You mean laughing as they call their lawyers and book tickets to Tokyo?
    25 Feb 2014, 08:00 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (589) | Send Message
     
    Bitcoins are backed by air; what could possibly go wrong with an 'investment' like that?
    25 Feb 2014, 06:01 AM Reply Like
  • rambler1
    , contributor
    Comments (547) | Send Message
     
    Anyone for tulip bulbs?
    25 Feb 2014, 07:28 AM Reply Like
  • Bouchart
    , contributor
    Comments (793) | Send Message
     
    Whew! Good thing I cashed out my bitcoins to buy shares of CRM, TWTR and FB.
    25 Feb 2014, 07:40 AM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    My ongoing hypothesis -- cryptocurrency 1.0 will disappear. But new formulations of the underlying approach will evolve and eventually thrive. And not just for currency, but for other forms of digital goods.
    25 Feb 2014, 07:51 AM Reply Like
  • votingmachine
    , contributor
    Comments (380) | Send Message
     
    Why? Money in the form of dollars works. Let me see. I keep my dollars in an FDIC insured bank account. I can transact electronically using my credit card.

     

    All bitcoins do is hide the fees. The fees are paid by creating new bitcoins to pay the "miners" who handle the transactions. This system seemed fine when the bitcoin was increasing in value ... who cared if there was a hidden fee of bitcoin inflation. But there is a fee.

     

    Bitcoins also facilitate hidden party transactions that allow drugs and illegal goods to be purchased without a face-to-face exchange of cash and drugs. But that is not a good thing.

     

    I think that bitcoin will collapse to zero. And there is no incentive to adopt any other digital currency. There really is no reason for me to use an artificial payment system. It simply has no added value over the systems for payment with dollars.

     

    I think it is an interesting bit of programming but I also don't trust a system designed by an anonymous group. Now the security is in question from the outside, but who is to say the deliberate holes and backdoors left inside. I know that if I as designing an arbitrary money printer, I would make sure I knew how to print a bit when I wanted it.
    25 Feb 2014, 06:07 PM Reply Like
  • WhitneyB
    , contributor
    Comments (422) | Send Message
     
    This is reminiscent of rumors that somebody kidnapped 6% of all the angels residing on the head of a pin.
    25 Feb 2014, 07:57 AM Reply Like
  • Mattster
    , contributor
    Comments (164) | Send Message
     
    I remember all the people saying they bought bitcoin because stocks were 'too dangerous'. Scared money always gets what it deserves.
    25 Feb 2014, 08:55 AM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    The entire Bitcoin soap opera becomes more comedic by the day. Murky exchanges, unknown and unknowable algorithms, myriad viruses, no government backing or guarantees, wildly-fluctuating values, outright fraud, etc. And, people want to place their money in this fantasy because it's "safer" than the dollar?

     

    Even the argument that Bitcoin's value lies not in its monetary characteristics, but in its development as a systemic medium of exchange, is near ludicrous. Unless Bitcoins, themselves, become money, it's impossible to eliminate the conversion of Bitcoins, at some juncture, back into real currency. So, in essence, it's an electronic barter system, not money. And, even if it attempted to become ubiquitous and penetrate electronic mediums of real-money exchange, does anyone think that the major banks, credit-card issuers and other payments systems, like PayPal, are going to sit around aimlessly and allow their business to be usurped by Bitcoins?

     

    Bitcoins are a fad, which has been successfully sold to some of the fearful and gullible. There will, of course, be some huge short-term winners and major losers, but, in the end, it will look a lot like tulips, only at least tulips still looked beautiful in the garden after all the mania passed. Bitcoins won't look nearly as pretty.
    25 Feb 2014, 12:12 PM Reply Like
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