Bitcoin Buzz | Bitcoin developers slam claims of security flaw

Bitcoin core developers Gavin Andresen and Jeff Garzik hit back at the embattled Mt Gox team after the Japanese company claimed a security flaw in the digital currency’s network was responsible for its trading troubles.

Andresen and Garzik said it was a cynical attempt to shift blame to developers and Bitcoin itself. They said the Tokyo-based exchange’s indefinite withdrawal suspension was triggered by a technical fault not just isolated to them.

Mt Gox had suffered from an “unfortunate interaction” between their wallet software, customer support, lack of a back-up plan for transaction malleability, the Bitcoin Foundation said.

The news saw Bitcoin prices collapse more than 20 per cent on Monday.

Chief scientist Andresen explained the flaw was “a small window” where transaction ID’s can be “renamed” before being confirmed in public ledger – to prove authentic transactions – and they were issues exchanges cannot correct overnight.

“Any company dealing with Bitcoin transactions and [having] coded their own wallet software should responsibly prepare for this possibility and include in their software a way to validate transaction ID’s,” said Andresen. “Otherwise, it can result in Bitcoin loss and headache for everyone involved.”