Bitcoin Suffers Cyber Attacks

The confidence in some Bitcoin users has been shaken following a series of cyberattacks against the digital currency.  The platforms that support Bitcoin were hit by cyberattacks, in what some experts believe is an attempt to lower the value of Bitcoins.  For those who may be unfamiliar with Bitcoins, here is a little bit of the history.  Bitcoin is digital currency that exists outside of government authority or central banks.  It is designed to allow for worldwide payments between Bitcoin users.

A Tokyo-based exchange that supports more than 70 percent of all Bitcon trades was hit with a huge Distributed Denial of Service Attack.  Essentially, hackers directed a massive traffic surge to the service, which managed to overwhelm the site’s servers.  In turn, users were unable to gain access to the site.

Some believe that the rising popularity and value of the digital currency is what prompted the attacks.  The reasoning is such that the attacks could cause panicked users to sell off their Bitcoins, which could then be bought for a cheaper price by hackers. Bitcoins had risen to $147 prior to news of the cyberattacks.  Once news of the attacks spread, the value of the Bitcoins sank to $115.  According to the Tokyo-based exchange, Mt. Gox, the attacks caused it to suffer the worst trading lag it had ever experienced, as users were unable to log into their accounts. However, it was reported that individual accounts were not compromised.

The recent rise in the value of Bitcoins has been attributed to several potential causes.  The surge in interest appears to have been fueled by decreasing trust in the traditional banking systems, including the current events involving Cyprus. Media attention has also been speculated to be part of the cause for the rise in value.  In the future, and as interest in the digital currency increases, Bitcoin service providers will have to continue to improve their cybersecurity measures.

[Image via rightwiththeship]