SCMP’s Bitcoin Morning Report: Bitcoin exchanges under ‘massive and concerted attack’
Blockchain’s chief security officer Andreas Antonopoulos revealed a major denial of service attack on Bitcoin was underway at around 2am Hong Kong time.
A denial of service attack exploited the ‘transaction malleability’ weakness in the Bitcoin network, he said. As Antonopoulos told me last night, before a genuine transaction is confirmed in the Blockchain [public ledger system], the unique hash code that is generated can be manipulated in an attempt to send double the amount of Bitcoin.
The impact brought several major exchanges to suspend Bitcoin withdrawals, too, including the largest Bitstamp and BTC-e trading platforms.
SCMP will have full coverage of the attack later today.
John Normand, the head of foreign exchange strategy at the investment bank, said in a research note, the digital currency is not a sound investment. Despite the “transformative effects of evolving technologies – Bitcoin looks like an innovation worth limiting exposure to,” he said, reports Wall Street Journal’s MoneyBeat.
Here are some of his other thoughts:
Compared to ‘fiat currencies’
“As a medium of exchange, unit of account and store of value, it is vastly inferior to fiat currencies. Since governments are quite unlikely to accord it the status of legal tender, Bitcoin or other virtual currencies would not reach the scale and scope to render them worthwhile for widespread commerce, payments or investment.”
Tackling the issue of yo-yo price volatility
“Even by dot-com standards, however, these moves are brutal. The Nasdaq only quintupled in value in three years (1997-2000), while Bitcoin’s price has risen 50-fold in the past year.”
Wall Street hedge fund raises US$5m
Since New York-based NYSO Hedge said on February 7 it would accept Bitcoin for trading, in three days it has raised US$5.4 million (HK$42 million).
When asked why the hedge fund accepts Bitcoin, on its website, it explained: “Why do we accept Bitcoin? Other than Wire Transfer, Bitcoin is the most secure way to make a deposit.”
Bitcoin award winner
According to Coindesk, the judges explained: “Since no one person made Bitcoin (or did they?) the award goes to the idea and the hard-working men and women around the world who are maintaining, mining, and improving the BTC protocol. It’s also an exciting time for economists who have suddenly become useful again as they try to explain the vagaries of currency pricing.”
Since Satoshi Nakamoto, the mystery figure behind Bitcoin, didn’t turn up, so Peter Vessenes, chairman of the Bitcoin Foundation, accepted the prize in his place.
35 million Brits know Bitcoin: survey
A survey of 2,000 online shoppers has found that 57 per cent of Brits have heard about the digital currency, Coindesk reports. However, the survey by communications agency Clarity will be a blow for enthusiasts – one in five expressed an interest in using cryptocurrencies. Just five per cent of respondents said they had used Bitcoin. In the breakdown of the sexes, 69 per cent of men versus 45 per cent of women have heard of Bitcoin.
Contrast that with 1,000 people quizzed by professional services multinational PricewaterhouseCoopers for its first ‘Digital Disruptor’ report released on January 27, the firm revealed only four per cent of people “very interested” in using Bitcoin. More encouragingly, 42 per cent understood the technical concept of how the digital currency worked. Half of respondents said they were “not very” or “not at all” interest, while a quarter of those particular respondents cited security concerns as a reason to stay away.
Latest Bitcoin price: US$662.50 at 09.17 on Tuesday based on prices from BTC-e and Bitstamp
Source: Coindesk
