Mt.Gox Bitcoin Exchange Hit By ‘Major DDoS Attack’


World’s largest Bitcoin exchange says it is under the biggest DDoS attack it has ever seen

It’s been a crazy week in Bitcoin land, with prices of the “crypto currency” going up as high as $142 per coin and the biggest exchange, Mt.Gox, saying it was hit by a “major DDoS [distributed denial of service] attack”

The Japan-based Bitcoin exchange said it appeared there were two motivations behind the attacks. First, to destabilise Bitcoin and, second, to abuse the system for profit.

Bitcoin under attack

On-line Piracy Key © bloomua - Fotolia“Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit,” the company said in a Facebook post.

The firm, which was hacked in 2011 causing the value of Bitcoins to fall, said little could be done to stop such attacks, even though it had DDoS protection vendor Prolexic helping out.

“Since yesterday, we are continuing to experience a DDoS attack like we have never seen,” Mt.Gox added.

“There are a few things that we can implement to help fight the attacks, such as disconnecting the trade engine backend from the Internet.”

“By separating the data center from the Mt.Gox website, we will continue to be able to trade.”

Meanwhile, Bitcoin wallet site Instawallet has shut down, with security problems to blame. The company was hit by a breach earlier this week

“The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture,” it reported on its site. “Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is.”

It is now accepting individual claims for individual Instawallets. After 90 days, if there have been no counterclaims, accounts under 50 Bitcoins will be refunded. It will deal with accounts containing over 50 coins on a case-by-case basis.

After peaking at $142 per coin this week, the value fell to $117 later on Wednesday.

The high valuation has baffled some, given few items or services can be paid for over Bitcoin. However, many see it as an addition to real-world money, not a replacement for it, and it’s real benefits lie in the financial network itself, free of government control.

Mega, the cloud storage service run by Kim Dotcom, is one service that does accept Bitcoins.

What do you know about Bitcoin? Try our Bitcoin quiz!

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