Value of BitCoin decreases
Today, BitCoin exchange website Mt. Gox announced the discovery of a bug in the BitCoin software affecting transactions of the crypto-currency. The bug was found a few days after the website noticed an issue with withdrawals, prompting it to temporarily pause all such transactions. However, Mt. Gox specified that withdrawals from a Mt. Gox wallet to an external address were the only type being affected and that any BitCoin transactions to and from Mt. Gox BitCoin addresses were not.
In a statement Mt. Gox provided a simplified explanation of how the bug is affecting dealings saying, “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. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.”
Because of the issue, and the temporary suspension of withdrawals, the value of BitCoin dropped from $800 to around $600. As of this article’s publication its current value is at $684.
Mt. Gox went on to assure consumsers that BitCoin withdrawals to outside wallets will resume when the issue has been resolved.
However, BitCoin core developers Gavin Andresen and Jeff Garzik have responded to Mt. Gox’s claims of a bug in the BitCoin software. According to the developers, the BitCoin software is not at fault and that the problem is an old one.
In a post on the BitCoin Foundation blog , Andresen explained, “The issues that Mt. Gox has been experiencing are due to an unfortunate interaction between Mt. Gox’s implementation of their highly customized wallet software, their customer support procedures, and their unpreparedness for transaction malleability , a technical detail that allows changes to the way transactions are identified.”
Transaction malleability has been around since 2011, with the developers working to solve the issue. In the meantime, sites such as Mt. Gox should take steps to limit this problem, according to Garzik who spoke to CoinDesk , “There are certain security practices that sites like Mt. Gox need to follow. Most notably, customer support staff and related software must not assume that transaction IDs are unchangeable, prior to being confirmed in the block chain.”
In his post, Andresen went on to explain that the development team has been working on the problem but that, "Finding the best and most responsible solution will take time." However, he assured users that “the Foundation is committed to working with companies to produce best practices to help improve software.”
BitCoin currency has been increasing in value and usage with companies such as TigerDirect and Xidax recently accepting them as legal tender for their products. But with the situation revolving around Mt. Gox, could potential consumers be scared off from using the virtual currency, or will more people continue to adopt it as a form of payment?