Hackers have stolen bitcoins from digital wallets and hijacked computers to create new bitcoins — the equivalent of minting money. Last week, hackers attacked Mt. Gox, the most popular Bitcoin exchange, taking the site offline by flooding its servers with traffic, a technique used recently to also attack traditional financial institutions. As news spread, Bitcoin values sunk from $147 to $115.
In a statement, Mt. Gox’s operators said the attack may have been motivated by hackers trying to prompt “panic selling” — buying up cheap bitcoins after creating hysteria, then waiting for the currency’s value to recover.
“Repeat this two or three times like we saw over the past few days, and they profit,” the site’s operators said.
The recent hack was the latest in a long line of attacks targeting Bitcoin exchanges that have sent the market into tumult. In 2011, Mt.Gox temporarily suspended operations after a hacker compromised a user’s account and sold his bitcoins. After the hack, the value of Bitcoin sunk from $17 to pennies “in a matter of minutes,” according to Ars Technica.
*Excerpt from The Huffington Post. News article copyright Gerald Smith at The Huffington Post.