Bitcoin Tumbles After Security Breach Bitcoin plunged, then erased losses Wednesday as one of the largest exchanges halted trading because hackers stole about $65 million of the digital currency.Bitcoin was little changed against the dollar as of 10:03 a.m.on Wednesday in New York, after sinking as much as 15 percent.Prices dropped 7.8 percent on Tuesday after declining 6.2 percent Monday.Hong Kong-based exchange Bitfinex said Tuesday it halted trading, withdrawals and deposits after discovering the security breach.The exchange said it was still investigating details and cooperating with law enforcement, but acknowledged some bitcoins were stolen from its users.“Yes -- it is a large breach,” Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform, wrote in an e-mail.“Bitfinex is a large exchange, so it is a significant short-term event, although Bitcoin has shown its resiliency to these sorts of events in the past.”For a QuickTake explainer on bitcoin, click hereBitfinex confirmed in a message to Bloomberg News on Wednesday that the hackers took 119,756 bitcoin, or about $65 million.

While trading was halted in all digital currencies, including ethereum, the exchange said losses were limited only to bitcoin.It also said U.S.dollar deposits were not impacted.“We will look at various options to address customer losses later in the investigation,” Bitfinex wrote in a blog post.“We ask for the community’s patience as we unravel the causes and consequences of this breach.” The Hong Kong exchange was the largest for U.S.Chinese exchange OKCoin was the largest overall bourse for trading in the digital currency, over 90 percent of which is denominated in the Chinese yuan.For more on the place of China in Bitcoin trading, click hereThe price drop was reminiscent of the market reaction after Tokyo-based Mt.Gox -- then the largest bitcoin exchange in the world -- disclosed it was hacked in February 2014 and filed for bankruptcy weeks later.Bitcoin prices plunged 30 percent that month.Bitfinex last year announced a partnership with Palo Alto-based BitGo, which uses multiple-signature security to store user deposits online, allowing for faster confirmation and withdrawals.

Exchanges including OKCoin tend to store the majority of deposits offline, while keeping a small percentage online and available for immediate withdrawal.“Since we now enforce multi-institutional second factor authentication (Bitfinex will be the first factor and BitGo the second factor), attackers are required to compromise both institutions before getting funds,” Bitfinex wrote on its support page after the partnership was announced.BitGo said it is investigating the matter also and hasn’t discovered breaches on its side.“To date, BitGo’s investigation has found no evidence of any compromise of its servers or services,” company spokesman Joe Volat said in an e-mail to Bloomberg.bitcoin withdrawal card“We believe that multi-sig security technology on which BitGo’s systems are based was not affected.”The company also supplies security to other bitcoin exchanges.“Bitfinex is in lockdown/investigation mode, so we’re not going to know anything for sure for a few days,” Peter Todd, an active bitcoin code contributor based in Toronto, wrote in an e-mail.precio oficial bitcoin

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".bitcoin kentuckyThe 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,bitcoin profit declinewe continue to have vulnerabilities in the form of exchanges and wallets," former Singapore-based bitcoin broker David Moskowitz told the BBC."Thebitcoin december 2013 crash

vulnerabilities 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.bitcoin uses ircBitcoinRisk of Bitcoin Hacks and Losses Is Very RealReutersWhen hackers penetrated a secure authentication system at a bitcoin exchange called Bitfinex earlier this month, they stole about $70 million worth of the virtual currency.The cyber theft—the second largest by an exchange since hackers took roughly $350 million in bitcoins at Tokyo's MtGox exchange in early 2014—is hardly a rare occurrence in the emerging world of crypto-currencies.New data disclosed to Reuters shows a third of bitcoin trading platforms have been hacked, and nearly half have closed in the half dozen years since they burst on the scene.This rising risk for bitcoin holders is compounded by the fact there is no depositor's insurance to absorb the loss, even though many exchanges act like virtual banks.Not only does that approach cast the cybersecurity risk in stark relief, but it also exposes the fact that bitcoin investors have little choice but to do business with undercapitalized exchanges that may not have the capital buffer to absorb these losses the way a traditional and regulated bank or exchange would.RelatedFortune 500Hackers Leaked ‘Orange Is the New Black’ Despite Receiving $50,000 RansomFortune 500Hackers Leaked ‘Orange Is the New Black’ Despite Receiving $50,000 Ransom"There is a general sense in the bitcoin community that any centralized repository is at risk," said a U.S.-based professional trader who lost about $1,000 in bitcoins when Bitfinex was hacked.bitcoin tata

He declined to be named for this article.Get Data Sheet, Fortune’s technology newsletter."Sowhen investing, you always have that expectation at the back of your head.I lost a small amount compared to the others, but I know of traders who lost millions of dollars worth of bitcoins," the trader said.The security challenge for the bitcoin world does not appear to be letting up, according to experts in the currency."Iethereum mining poolam skeptical there's going to be any technological silver bullet that's going to solve security breach problems.ethereum maximum amountNo technology, crypto-currency, or financial mechanism can be made safe from hacks," said Tyler Moore, assistant professor of cybersecurity at the University of Tulsa's Tandy School of Computer Science, who will soon publish the new research on the vulnerability of bitcoin exchanges.His study, funded by the U.S.silicon valley bank bitcoin

Department of Homeland Security and shared with Reuters, shows that since bitcoin's creation in 2009 to March 2015, 33% of all bitcoin exchanges operational during that period were hacked.The figure represents one of the first estimates of the extent of security breaches in the bitcoin world.In contrast, data from the Privacy Rights Clearinghouse, a nonprofit organization, showed that of the 6,000 operational U.S.bitcoin darknetmarketsbanks, only 67 experienced a publicly disclosed data breach between 2009 and 2015.bitcoin farm serverThat's roughly 1% of U.S.highest paying bitcoin pool 2013banks.Among the world's stock exchanges, however, security breaches are much higher, with hackers attracted to the large pools of cash moving in and out of these trading venues.ebay bitcoin alternative

The latest survey of 46 securities exchanges released three years ago by the International Organization of Securities Commissions and World Federation of Exchanges found that more than half had experienced a cyber attack.Moore collaborated on the research with Nicolas Christin, associate research professor at Carnegie Mellon University and Janos Szurdi, a doctoral student also at Carnegie.In 2013, Moore and Christin wrote a research paper on security risks surrounding bitcoin exchanges when Moore was still a professor at Southern Methodist University.china wholesale bitcoinThat research, "Beware of the Middleman: Empirical Analysis of Bitcoin Exchange Risk," was peer-reviewed and presented at the 17th International Financial Cryptography and Data Security Conference in Okinawa, Japan, in 2013.In the most recent study, the rate of closure for bitcoin exchanges in Moore's research edged up to 48% among those operating from 2009 to March 2015.cours du bitcoin

Hacking did not necessarily trigger the closure in each case."A48% closure is not acceptable, but not surprising given that bitcoin is a new technology," said Richard Johnson, vice president of market structure and technology at Greenwich Associates.bitcoin trade in nigeriaJohnson has written reports on risk and security issues in the crypto-currency world.Profitability is a big problem for bitcoin exchanges, with many of them unable to generate enough volume to keep afloat.Bitcoin exchanges overall could be launched for as low as $100,000 up to $1 million, said Erik Voorhees, founder and chief executive officer of digital currency exchange ShapeShift.world's fastest bitcoin minerThat is a fraction of what U.S.circle bitcoin walletforex exchanges' are required to put up.Retail FX trading platform FXCM, for instance, is required by the Commodity Futures Trading Commission to have at least $25 million in capital at all times.A key factor tied to the risk posed by exchanges is whether customers are reimbursed after closure or after the loss of bitcoins following a hack.fastest bitcoin mining

Each closure and breach have been handled differently, but Tandy's Moore said the risk of losing funds stored in exchanges is real.In the case of Bitfinex, which is now up and running after the hack Aug.2, customers lost 36% of the assets they had on the platform and were compensated for the losses with tokens of credit that would be converted into equity in the parent company.At Tokyo's MtGox, customers have yet to recover their investments more than two years after closure.Experts say trading venues acting like banks such as Bitfinex will remain vulnerable.bitcoin precio de salidaThese exchanges act as custodial wallets in which they control users' digital currencies like banks control customer deposits."Thebitcoin wallet physicalbig exchanges that hold customer deposits are a big target for hackers," said ShapeShift's Voorhees, "and unfortunately most bitcoin exchanges store user funds."Whenbuy bitcoin ukash