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bitcoin - All posts tagged bitcoin

  • Jun 22, 2011
    6:00 AM ET

    Bitcoin’s Flash Crash

    Andrew Green

    Bitcoin, the bizarre cyber-currency that soared from near-zero to more than $30 in a year , has suffered a severe setback.  The peer-to-peer payment system designed by “hack-tivists” to free traders from the influence of central banks and treasury departments has itself been the victim of a hacker attack that resulted in sizeable losses to account-holders and a shattered exchange rate.

    The attacks seem to have been directed at MTGox.com, an exchange site that matches buyers with sellers for a transaction fee, rather than at the program that powers the currency itself.

    “An attacker was able to break into many accounts,” wrote Donald Norman, a spokesman for The Bitcoin Consultancy, in an email exchange with SmartMoney.com.  “The attacker sold enough Bitcoins to buy up all the [offers] and push the price down to next to nothing.”  Norman compares the plunge with the U.S. stock market’s May 2010 flash crash and writes that the price rebounded shortly before MtGox froze trading.

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