In the last week, 1 bit has lost almost half of its value. So what happened? First, the Russian government took a formal view of Bitcoin as illegal money and related transactions could violate the law governing electronic money. But that is not the main reason. The main reason is related to the two largest online changers, mtGox and Bitstamp.
In 2011, a significant error was discovered in the Bitcoin wallet codes related to the possibility of falsifying and manipulating transactions performed on a specific wallet. This bug has been fixed by most online changers but mtGox and Bitstamp probably didn’t consider it important enough. However, the bug has recently been used more actively in attacks, and both changers have been forced to shut down transactions outside their environment to protect users. To this day, they work hard to fix the error quickly, but since this is a large and important part of the changer’s root code, it may take some time. Temporarily shutting down transactions triggered an even greater wave of DDos attacks on changers. All of these events caused panic among cryptocurrency users – which is when the Bitcoin network and protocol are down. Fortunately, this is not the case – the error only affects these two changers, and a software patch has been available since 2011. But the already panic led to a rapid decline. The network and other changers have so far withstood the attacks very well, and the decline has now stopped close to $ 500. There is now a good opportunity for riskier investors to buy. It took about 2 months to recover smoothly from the last similar decline due to China’s position.