Bitcoin Exchange ‘Faced 150,000 Hack Attacks Every Second’ Showing ‘Technology Risk’

no more secrets bankerBitcoin exchange Mt. Gox faced massive hacker offensives last month. It is alleged that it came under some 150,000 DDoS attacks per second for several days ahead of its spectacular failure.
The Tokyo based exchange, which filed for bankruptcy protection at the end of February, admitted that it has lost half a billion dollars in the digital currency. It has come under serious cyber attacks in particular since around February 7, the Yomiuri Shimbun reported.
While Mt. Gox faced hacker attempts to steal Bitcoins, the exchange also confronted massive distributed denial of service (DDoS) attacks, crippling its technology and systems, the Japanese newspaper said without naming its sources.
Unlike physical gold bullion, Bitcoin is generated by complex chains of interactions among a huge network of computers around the planet. This creates advantages and disadvantages.
Bitcoin has huge dependency on systems and technology. In this, there is a resemblance with the modern digital banking system as the world is pushed towards a cashless society. Were hack attacks launched on banks, investment providers or exchanges, many of whom are now wholly dependent on website technology and user interfaces, and investors would be exposed and could incur losses.
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From Goldcore:

DAILY PRICE REPORT
Today’s AM fix was USD 1,348.00, EUR 973.57 and GBP 810.44 per ounce.
Yesterday’s AM fix was USD 1,334.25, EUR 961.55 and GBP 800.87 per ounce.

Gold rose $0.7 or 0.05% yesterday, to $1,339.90/oz. Silver dropped $0.08 or 0.38% to $20.81/oz.

Gold in US Dollars – 1 Year (Bloomberg)

Gold rose in all currencies again today and headed towards a four month high in dollar terms as the standoff between Russia and Ukraine led to demand for gold as a haven. Silver surged 1.4%, platinum added 0.3% to $1,481.60/oz and palladium rose 0.3% to $777.80/oz.

Resistance is between $1,350 and $1,360 and above that at and $1,435 per ounce.

The U.S. and Europe are continuing to threaten Russia, the world’s biggest energy producer and miner of palladium, with economic sanctions for sending troops into Ukraine’s Crimea region. Ukraine’s new prime minister prepared to meet President Obama and western nations threatened further repercussions if Russia failed to defuse tensions.

In South Africa, more than 70,000 members of the Association of Mineworkers and Construction Union have been on strike since January. South Africa is the largest producer of platinum and second biggest for palladium after Russia.

Speculation that terrorism may have contributed to the missing plane in Malaysia may also be leading to a safe haven bid. Fingers are being pointed at Iran which could lead to renewed geopolitical tension between Iran and some western nations.

Bitcoin Exchange ‘Faced 150,000 Hack Attacks Every Second’
Mt. Gox’s lawyers confirmed yesterday that 750,000 Bitcoins belonging to the firm’s customers had gone “missing”, along with around 100,000 units that the company owned.

Bitcoin exchange Mt. Gox faced massive hacker offensives last month. It is alleged that it came under some 150,000 DDoS attacks per second for several days ahead of its spectacular failure.

The Tokyo based exchange, which filed for bankruptcy protection at the end of February, admitted that it has lost half a billion dollars in the digital currency. It has come under serious cyber attacks in particular since around February 7, the Yomiuri Shimbun reported.

While Mt. Gox faced hacker attempts to steal Bitcoins, the exchange also confronted massive distributed denial of service (DDoS) attacks, crippling its technology and systems, the Japanese newspaper said without naming its sources.

Under DDoS attacks, hackers hijack multiple computers to send a flood of data to the target, crippling computer systems. The attacks on Mt. Gox lasted for several days, the newspaper said.

Unlike physical gold bullion, Bitcoin is generated by complex chains of interactions among a huge network of computers around the planet. This creates advantages and disadvantages.

Bitcoin has huge dependency on systems and technology. In this, there is a resemblance with the modern digital banking system as the world is pushed towards a cashless society. Were hack attacks launched on banks, investment providers or exchanges, many of whom are now wholly dependent on website technology and user interfaces, and investors would be exposed and could incur losses.

Technological risk and systemic risk are another important reason to own physical gold coins and bars in segregated and allocated accounts. Having the ability to pick up a phone, fax or email and take delivery of bullion is also important.

Mark Karpeles, chief executive of Mt. Gox, apologised for the collapse at a news conference earlier this month, blaming a “weakness in our system”, but predicted that the market will grow.

Our modern financial system and its dependence on technology is far more vulnerable than is realized.

 

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