The price of bitcoin has fallen more than 10% after the Hong Kong-based digital currency exchange Bitfinex said it had suffered a major hack.The security breach led to the possible theft of bitcoin worth $65m (£49m).Bitfinex told the Reuters news agency on Wednesday that nearly 120,000 bitcoin were stolen from its exchange platform.All transactions on the virtual exchange have been suspended while the security breach is investigated.In a statement on its website, Bitfinex said that it was "deeply concerned about the issue and we are committing every resource to try to resolve it".The hack is one of the biggest thefts in bitcoin's history and is being treated as a "major deal" by many in the virtual currency community."Unfortunately,we continue to have vulnerabilities in the form of exchanges and wallets," former Singapore-based bitcoin broker David Moskowitz told the BBC."Thevulnerabilities almost always occur on the exchange or wallet side and this is an area that continues to need improvement and more secure protocols, no different than when a bank gets robbed."

Securing bitcoin trading platforms has been a key challenge, with hacking and thefts seen as the biggest threats.In 2014, the Tokyo-based Mt Gox trading exchange declared bankruptcy when hundreds of millions of dollars in bitcoins vanished or were stolen.But Mr Moskowitz stressed that in spite of the latest alleged theft "the core protocol is extremely robust and has not been hacked".He said while there would most likely be a price correction in bitcoin, he remained confident that it would continue to be an appealing alternative asset.A spike in searches for Bitcoins can be a good predictor of an imminent crash in its value, suggests research.The conclusion emerged from a study of the web activity and social media chatter surrounding the virtual currency by Swiss computer scientists.Their analysis of who was taking part in this activity helped to explain the meteoric rise in the value of bitcoins.It might also offer insights into how online communities adapt and grow, suggested the research team.Bitcoin was a great candidate for research because so much of the activity surrounding it takes place online, wrote the team in a paper published in the Journal of the Royal Society.

Bitcoins are a virtual currency which depend on people using their computers to both generate the cyber coins and to verify transactions carried out with them.Currently one bitcoin can be exchanged for $585 (£347).Studying the "digital traces" of this activity could help lay bare the variables that govern the way the virtual currency behaves said the team.The four key variables that emerged from the analysis were: From this the team at the Federal Institute of Technology in Zurich managed to find two positive feedback loops that steadily influence how much each bitcoin was worth.The first "reinforcement cycle" involves an increase in the amount of searching for information about bitcoins, which leads to more chatter about the currency and prompts a rise in its value."The successive price surges in the Bitcoin economy are largely due to its growing public attention," said the team.The second feedback loop involves a rise in search volume which makes more people download the software and join in the mining pools that generate coins.

This too tends to lead to a rise in the nominal value of Bitcoins."Ouranalysis suggests that the successive waves of growth of the Bitcoin economy were driven by corresponding waves of new users from public circles gradually opening to the currency" wrote the researchers.In addition, they found found that search spikes were early indicators of an imminent drop in its value but added that this did not act as a good predictor of the biggest falls in the value of bitcoins.The financial rewards for being involved with the Bitcoin virtual currency have been halved.Before 9 July, a regular reward of 25 bitcoins was handed out to those who were first to verify which coins had been spent.Now, the leading team of "miners" who verify a chunk of global transactions will receive only 12.5 bitcoins.cjs cd key bitcoinThe halving of the reward is scheduled to take place every four years to limit bitcoin inflation.Created in 2008, bitcoins have slowly become accepted as a form of payment by increasing numbers of shops, stores and services.setup bitcoin mining pool

One of the latest to back Bitcoin is cab company Uber, which has started letting passengers in Argentina pay for journeys using a Xapo debit card they can fill with bitcoins.Bitcoin miners are essential to the operation of the virtual currency because they collaborate to maintain the central record of transactions known as the blockchain.Verifying a chunk of transactions, known as a block, involves a complicated mathematical operation, and many miners use dedicated hardware to crank through the possible solutions to the cryptographic puzzle it represents.The mining process is carefully engineered to limit the opportunities for fraud and to ensure coins are handed out on a regular basis.ethereum miner rigThe financial reward for solving the puzzle also helps motivate people to stay involved.The first halving event took place in 2012, when the reward for mining a block dropped from 50 bitcoins to 25.One bitcoin is now worth about £500 ($645), making the reward each time a block is added to the blockchain equal to about £6,244.Many mining pools operating thousands of dedicated computers seeking to be the first to get the solution to the bitcoin puzzle and reap a reward operate on very thin margins.bitcoin russian mafia

Reuters reports one company, Sweden's KnCMiner, filed for bankruptcy in May, citing the losses it would suffer when the reward halving took place.Competition among miners has increased thanks to the intervention of many Chinese companies, who are now thought to control about two-thirds of the computational power working on Bitcoin's blockchain.Daniel Masters, who runs a bitcoin-based hedge fund, told Reuters: "It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper."ethereum tutorial videobitcoin Last night, for the first time, the value of Bitcoin was higher than gold: $1,268 (about £1036) for one Bitcoin vs $1,233 (about £1,008) for a troy ounce of gold when the markets closed.bitcoin kurs chart euroWhile many people are sceptical of the usefulness of the 'libertarian magic beans,' Bitcoin has weathered several storms and established itself as a legitimate offering in a world where most currencies are far older.bitcoin conference washington dc