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This article was published on February 10, 2014

Bitcoin value tanks again as Mt. Gox details the ‘bug’ that is forcing it to suspend withdrawals

Bitcoin value tanks again as Mt. Gox details the ‘bug’ that is forcing it to suspend withdrawals
Ben Woods
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Ben Woods

Europe Editor

Ben is a technology journalist with a specialism in mobile devices and a geeky love of mobile spectrum issues. Ben used to be a professional Ben is a technology journalist with a specialism in mobile devices and a geeky love of mobile spectrum issues. Ben used to be a professional online poker player. You can contact him via Twitter or on Google+.

The Bitcoin payment processor Mt.Gox today said that it would not re-instate Bitcoin withdrawals until it was happy that the underlying system for tracking transactions was completely secure.

The company made the announcement in a press release explaining exactly why it had been forced to put a hold on transactions for now.

Ultimately, it seems as if ‘transaction malleability’ is the problem – the ability for someone to make it look like a Bitcoin transaction didn’t take place, when in fact it did. As the transaction then appears unsent, there’s the possibility that it will be carried out again and the Bitcoins re-sent for a second time.

While Mt.Gox says a software bug is to blame for the issue, it claims it’s a wider problem that affects any system that involves sending Bitcoins to a third-party. As a result, it has ultimately decided to maintain its hold on withdrawals until it has been fixed:

The problem we have identified is not limited to Mt.Gox, and affects all transactions where Bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending Bitcoin withdrawals until this technical issue has been resolved.

As the largest Bitcoin exchange, there’s a lot of attention on Mt.Gox and the virtual currency. With software bugs still evident, outright bans and highly volatile valuations, there’s clearly still a long way to go before Bitcoin can prove itself as a viable, stable and secure digital currency.

As a result of this latest situation, the value of Bitcoin has been plunging rapidy. From valuations once in excess of $1,000 per Bitcoin, the virtual currency is now trading at around $570 on most exchanges and lost more than $43 in 30 minutes alone today, according to Bitcoin Market on Twitter.

Featured Image Credit – Zach Copley/Flickr