Sunday, July 21, 2013

Mt. Gox Down: More DDoS Attacks For Bitcoin's Largest Exchange?

Mt. Gox, the largest Bitcoin exchange on the internet, has experienced service outages on and off for a few hours now. DDoS attacks are nothing new for Mt. Gox, but no site is fully immune to these types of attacks. If you don't know a DDoS, or distributed denial of service attack, is when an attacker uses multiple machines across the internet to flood a server with traffic which causes it to slow down to the point where it can no longer serve legitimate visitors. DDoS attacks are hard for site owners to contend with as attacks can come from all over the world simultaneously. This makes it hard to ignore attackers while still providing service to actual users. Mt. Gox has had these attacks before and usually they start to die off as the machines used to attack get taken down or blocked, but how long before this attack stops? Who is doing this and why would they attack a site like Mt. Gox? Well anybody who wants to affect the price of Bitcoin could use an attack like this to their advantage. An attacker could cause a site to be unreachable for most visitors which would cause the price to change. They could then buy or sell huge amounts of Bitcoins at different points during their attack and theoretically end up making a lot of money. Attackers could gauge when prices will fluctuate and act accordingly, trading when necessary to make profit, in the end making a lot of money and destabilizing the Bitcoin value as a currency, as well as causing uneasiness among Bitcoin users.

Hopefully this attack won't last long and won't upset the value of Bitcoin. The value of Bitcoin is at a good level right now. It is just high enough to keep interest among users and prospective investors and still easy enough for many to get into the Bitcoin world. If attacks like these keep happening and the attackers are able to game the system enough the Bitcoin market could collapse. Although the Bitcoin currency was created with this in mind, its value could plummet to the point where it is almost invaluable. People would stop mining and therefore stop using Bitcoins altogether. Once the value drops to a certain level everyone will rush to sell and the value will drop to near nothing. Hopefully this won't happen, hopefully the existence of multiple exchanges and users around the world will keep the Bitcoin currency alive. However only time will tell if the Bitcoin has a future or if it will become another internet fad. I'm hoping the former, not the latter.

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