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Bitcoin Sees Dramatic Slump In Valuation Amid DDoS Attack

With meteoric rise in valuation in the past month, the spreading of malware for mining, and shut-down of operation after stealing of huge amount of currency from an exchange Bitcoin is hot in the digital currency market. The latest addition in the series of events is a dramatic correction in valuation after a DDoS attack on Bitcoin exchanges Bitstamp and Mt. Gox, according to another Bitcoin exchange TradeHill.


bitcoin

TradeHill said, “There are connectivity issues to external exchanges. We are continuing to execute internal orders normally, but routing to external orderbooks is not possible at the moment.” However, Bitcoin has denied that it was hit by a DDoS attack.

The peer-to-peer digital currency was valued below $5 just a year ago. Yesterday, the valuation of a Bitcoin rose as high as $266. The valuation plummeted to $105 due to the DDoS attack; more than 60% drop in a single day. The current ask price is $176 at an exchange, against a bid of $77 only.

The attacks are used by hackers as a mean to manipulate the market. Mt. Gox, the world’s largest Bitcoin exchange, said in a statement, “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.”

Thanks to: CNET

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