Bitcoin’s price on the popular Mt.Gox exchange has dropped below $100 [£60], security problems continuing to affect the confidence in the exchange that is still working to reinstate withdrawals.
The Tokyo-based exchange, which only came back online earlier this week after a security breach, saw the price of the digital currency drop as low as $91.50 [£54.91] as the company continues to firm up its security defences and refused to open up withdrawals.
“Thank you for your patience this week while we are working on re-initiating Bitcoin withdrawals. In addition to the technical issue, this week we have experienced some security problems, and as a result we had to relocate MtGox to our previous ofﬁce building in Shibuya,” read a statement from the company.
It added that the move, as well as “other security and technical challenges”, have delayed its progress and that an update on the situation will be provided when it is available.
The virtual doors of Mt.Gox first slammed shut back on 7 February as a result of the same problem that has affected other Bitcoin exchanges – transaction malleability. This is caused when someone changes the cryptographic code that is used to create an ID for the exchange of funds before it’s recorded in the block chain. In layman’s terms, it allows twice as many Bitcoins to be sent in one transaction and, thankfully, technicians at Blockchain have already successfully developed a workaround in the shape of a new “unique identifier”.
Mt.Gox’s problems have spawned an eight-day long protest outside the offices of the owner of the exchange, Tibanne, and one of those holding vigil flew all the way from London in order to try and recover his “lost” coins.
The wholesale price of Bitcoins hasn’t escaped the mayhem either and the price of 1 BTC has dropped from $850 [£510] before the problems began at the start of February to around $580 [£348], still almost six times as much as those on the Mt.Gox exchange.
Some are speculating that the dramatic drop in value could be a sign that the exchange is close to insolvency and if that happens confidence in the currency as a whole will see a sharp drop once again.