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Bitcoin exchange center hacked, prices are in flux

The ever popular Bitcoin exchange Mt. Gox has reported that not only was he hacked into earlier today via Hong-Kong based hackers but also, all his were then sold. Mt. Gox then shut down his store as the rates then spiraled out of control to just pennies after valued around $17.50 each.

For those who don’t know and haven’t heard of Bitcoin before:

Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto. The name refers both to the open source software he designed to make use of the currency and to the peer-to-peer network formed by running that software.

Unlike some other digital currencies, Bitcoin avoids central authorities and issuers. Bitcoin uses a distributed database spread across nodes of a peer-to-peer network to journal transactions, and uses digital signatures and proof-of-work to provide basic security functions, such as ensuring that bitcoins can be spent only once per owner and only by the person who owns them.

Bitcoins are popular to hackers who wish to see get “donations” for their work but want to stay nameless. Not all Bitcoin exchanges have also seen these price drops as TradeHill has froze the rate at $13 for each. This isn’t the first time though that hackers have gone after Bitcoin users, earlier this month someone claimed to have roughly $500,000 worth of Bitcoin stolen, however it was never verified that he was hacked into, and/or that amount was ever stolen.

Mt. Gox said service would not resume before 10 p.m. EST Sunday and that the re-opening could be “delayed depending on what is found during the investigation,”

This isn’t even the first public instance of hackers working today as Sega earlier today also reported a break in of all its users. However unlike Sony they contacted all the members right away with an email, stating what happened along with steps to changing there emails.

With questions already starting about security when it comes to Bitcoin and how its not “safe” how does a major break in like this fair for the value of those already out there. We will find out shortly as when Mt. Gox opens later tonight will we see a mass sell off or will the price drop but still hold.

Source: Venture Beat