Prices took another dive on MtGox today after the long
awaited Monday statement from the exchange failed to deliver. Not only did the
company say that bitcoin withdrawals will not be resumed, it went a step
further by conditioning their return on a change in the bitcoin protocol
itself. Here a part of the MtGox statement on the matter:
‘’A bug in the bitcoin software makes it possible for
someone to use the Bitcoin network to alter transaction details to make it seem
like a sending of bitcoins to a bitcoin wallet did not occur when in fact it
did occur. Since the transaction appears as if it has not proceeded correctly,
the bitcoins may be resent. MtGox is working with the Bitcoin core development
team and others to mitigate this issue.’’
The bug MtGox is referring to is the well-known Transaction
Malleability. Speaking to Cryptocoinsnews, Bitcoin core developer, Greg Maxwell
had this to say about the statement:
‘’The Gox press release seems a little ‘spun’ to me. They
portray characteristics of the Bitcoin system well known since at least 2011
(which even have their own wiki page ) as something new. These characteristics
are annoying but don’t inhibit basic operation. They are slowly being fixed –
but fixing them completely will likely take years as they require changing all
wallet software. Correctly-written wallet software can cope with the
consequences, and I cannot understand why they would gate their withdraws on
external changes.’’
Several different bitcoin developers also responded by
saying that they have to intention to change the bitcoin client in order to
accommodate MtGox. Some went even further. Andreas Antonopoulos, a security
expert for Blockchain.info took his frustration with the troubled exchange on
Twitter: ‘’ Bitcoin Foundation should kick Karpeles (The CEO of MtGox) out. Not
for the technical glitch, but for the press release and the damage to
bitcoin.’’
The Gox statement stated that fiat currency withdrawals will
be processed ‘’as normal’’. Not sure if the ‘’normal’’ the company is referring
to are the multi-month long delays that the community has grown accustomed to
during the past year. Prices crashed on MtGox after the release of the
statement from 636 to a low of 504. Bitcoin has since rebounded to just above
600 where it’s trading at the moment.
On BTC-E, prices took a more dramatic dive. As mainstream
media picked up the Gox story and reported on a ‘’bitcoin bug’’, fear induced
selling drove btc prices lower on all exchanges. The chart below shows the
impressive fall from 662 to 104 in less than 1 minute as a 4,000 BTC (around
2.4 Million USD) order hit the market. Prices on BTC-E immediately rebounded
and are currently trading at 674, slightly above the price seen before the
MtGox statement.
