Digital cryptographic currency Bitcoin suffered a huge drop in value today, allegedly due to a denial of service attack against the largest Bitcoin trading exchange.
At the largest Bitcoin exchange, Mt Gox, Bitcoin rose sharply to US$147 before dropping to US$126 in just over an hour of trading. It then recovered to over US$140 before starting to trend downwards, hitting as low as US$113. Bitcoin against the Aussie dollar is showing a similar trading pattern.
Currently, Bitcoin is trading at US$123 at Mt Gox.
On its support site, the Mt Gox exhange told users that there would be delays with deposits and withdrawals.
"Due to a DDos attack, Dwolla deposits and withdrawals are currently not being processed and we are expecting some delays. This is expected to be resolved in 12 hours. Our apologies for the delay and inconvenience caused. Thank you for your patience while we work to resolve this."
As of writing, representatives from Mt Gox said the issue has been resolved.
There is speculation that the swings in value are connected to a Bitcoin deposit service, Instawallet, being hacked and suspended its operations indefinitely.
Instawallet has not revealed how many Bitcoins were stolen in the raid on its database, but says it will start processing claims for users with wallets containing less than 50 BTC.
Those with more deposited may not be refunded, however, as Instawallet says "claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis."
Despite having little use in the real world, Bitcoin has experienced a massive appreciation in value in a short period of time this year, with the total monetary base now thought to be around A$1.3 billion.
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