Dear Forum! No panic advised as Bitcoin plunges in early fevruary 2014! Modified Mt.Gox wallet allows modiefied transaction hashes

Dear Forum!

As the bitcoin exchange rate plunges beneath 600 USD again i would like to add a few words myself. You could read it at bloomberg, but i somehow guess thats not why you are here (Source).

The reason for the drop has been a possible exploit in the modified wallet daemon of the Mt.Gox exchange. Apparently is was/is possible to change the Hashes of a transaction thus marking said transaction as invalid for the rest of the system. The problem is apparently known since 2011 (Source) and has been addressed in current wallet applications. The described problem is the possibility to change the transaction id before the transaction is getting acknowledged by other nodes.

So it does not wonder that Mt.Gox is blamed directly, and their wallet application is named as the source of the trouble (Source).

I urge you not to loose confidence or sell your coins in panic! Bitcoin is still experimental (so are all the other "coins" out there - don't forget) and the occurring problems are usually swiftly dealt with by a very active developer community.

So don't forget; Gox can't pay at present, but they only hold about 20% of market share. Don't let the 20% drive you to participate in the panic affecting all.

If you have been so tactical that you need the cash you wold gain from the coins then we have some future advice:
- Don't design your earning model to revolve solemnly on Bitcoin
- Spread out your funds between exchanges and wallets to minimize chances of theft or however caused inflation (it may be confined to the operator)
- Choose a conversion model that does not out to much. We have noticed a few other exchanges and currencies that have shown almost no sign of the Mt.Gox trouble. Ripple for example shows a stable rate and allows trading into fiat currencies as well.

So don't be alarmed by the current drop of Bitcoin value. It's one black sheep and their handling of the software that caused this.


See you soon!

Tim