The largest Bitcoin exchanges are suffering from a combination of DDoS and Bitcoin transaction malleability issue that has proved itself effective against Mt.Gox.
Most of the information and analysis of current event is provided by Andreas Antonopoulos, who works as the chief security officer of Blockchain.info – the most visited Bitcoin themed site that also provides one of the safest web wallets there be.
Again as with Gox, the people behind the attack are changing the hash of the transaction and at the same time asking for a refund. The numerous Bitcoin deposits and withdrawals from the different exchanges are taking place at the same time. The bots are sending the Bitcoin on the exchanges wallet, then change the hash of the withdrawal transaction. The scale of this process makes a great fog screen that hides perpetrators from the system. Apparently, not only Bitcoin markets are suffering but other services too.
The strategy that is being used is very similar to the one that was used against Mt.Gox earlier, which hints at the possibility of the same group of hackers being involved. At that point, all the trials that the mentioned exchange was and still is going through was designed as a test-run for the “massive concerted attack” how it is called in some of the sources.
Andreas claims that Blockchain.info client was not harmed by the means of attack, but the inner systems of the site became desynchronized from the Bitcoin network due to extreme pressure on servers. However, he assures users, that it would not in any way make an effect on the Bitcoin withdrawal, as most of the market prefer to refuse the automatic withdrawal of finance to provide a higher protection against such attacks and any possible means of fraud. The BlockChain’s security officer also states that it is quite possible that number exchanges will suspend the withdrawal operation to not leave hackers any chance for the theft. As soon as markets’ accountant systems get synced again, money could be easily retrieved again, Andreas points out:
“It’s important to note no funds have been lost. Withdrawals have been halted to prevent funds from being lost or to prevent the balances from going out of sync.”
That is the reason why Bitstamp, has been suspended withdrawal of Bitcoin. In the public statement, they finally answer the most prominent question of the users. No, the money are not lost and they won’t be. The already infamous DDoS attack is said to be made possible because of some particular qualities of the current version of the Bitcoin client, but the solution for this problem is easy to implement and the network will be back shortly.
The unsuccessful withdrawals from the Bitstamp that occurred during the peak of the attack 10th-11th February will be canceled and Bitcoins brought back to their owners’ wallets.
Another big Bitcoin market - BTC-e even refused to stop the services; instead, their team published a disclaimer in twitter that due to the attack the withdrawal of the digital coins during those two days will be delayed:
“Due DDOS on Bitcoin network there is a delay possible with crediting of transactions madden between 10-11 February. Be patient please #btce.”
Even though the sudden attack raised some panic even in the hearts of the most enthusiastic members of cryptocommunity, the latter began to fight back.
As every action has a reaction, the community quickly organized and cooperated forces of coin exchangers and the main developers are working on the problem. Other layers of the Bitcoin network search for their own way to fight back the attack. For example, the largest mining pools are working hard on stopping and prevention of the harmful transactions that allow this mess to shake the network.
Andreas Antonopoulos believes that the time that would take the system to recuperate would not exceed three daynights.
“…and in the meantime, any withdrawals that were cancelled will reappear in customer account balances,” – he continues.
Andreas also believes that this crisis is not the Bitcoin’s last, as there were many “deaths” and “bubble-pops” predicted for cryptocurrency but it always proved to be sturdier than its criticism. If we to trust his words then this Friday the Coin will again prove its right for existence by returning to the tempo it was working in before the attack. As a conclusion, I want to share the Andreas’s final words on the subject matter:
“The death of bitcoin has been prematurely announced so many times already that the obvious conclusion is that bitcoin is far more resilient than its critics would like to think. I am confident that in a few days, those who predicted the death of bitcoin will once again be proven wrong.”