News & Information for Technology Purchasers NewsFactor Sites:     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Let an ISACA® certification elevate your career.
Register today and save
You are here: Home / Digital Life / Will Mt. Gox Take Down Bitcoin?
DDoS Protection Powered By Verisign
Will the Bitcoin Industry Go Down with Mt. Gox?
Will the Bitcoin Industry Go Down with Mt. Gox?
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus

Mighty Mt. Gox has fallen. Yes, the world’s largest bitcoin exchange on Friday filed for bankruptcy protection in Japan.

How bad is it? Well, Mt. Gox is reporting it may have lost nearly $500 million worth of the virtual currency after hackers broke into its computer database.

Until today, there was plenty of speculation about the future of Mt. Gox. Now, there’s at least some speculation about the future of bitcoin exchanges like it.

“First of all, I'm very sorry," said Mt. Gox CEO Mark Karpeles at a news conference in Tokyo. "The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point."

Will Bitcoin Survive?

Will it? That depends on whom you ask.

Moshe Cohen, assistant professor at Columbia Business School in New York, told Reuters this may be telling for the level of traceability of the transactions.

“Bitcoin has been telling us that it is more traceable than cash,” Cohen said. “The question is, how much more and is there the potential for real recourse in the case of theft.”

Mark Williams, a former Federal Reserve Bank examiner who currently teaches finance at Boston University's School of Management, told NBC News that Mt. Gox failed to protect itself from a known flaw -- and he thinks its decline is indicative of larger problems in the system.

"Mt. Gox is a microcosm of the problems that exist in the bitcoin infrastructure by its very nature," Williams said. "When you have decentralized transactions, anonymous coins and a low-control environment, then you expose investors to great risk."

Not Inherently Untrustworthy

We caught up with Ross Rubin, a principal analyst at Reticle Research, to get his take on what the theft and bankruptcy means for the bitcoin industry. As with many new technologies, he told us there are legitimate concerns about reliability and trustworthiness with bitcoin. Stories like Mt. Gox don’t help.

“Clearly, whatever safeguards were being used by [the] Mt. Gox bitcoin location was compromised, but that doesn’t necessarily mean that the technology is inherently untrustworthy or can’t become more mainstream,” Rubin said.

Good point. Here’s another one from Rubin: Despite all the media coverage, we’ve yet to see a flood of retailers or others that accept bitcoin rescind support for the alternative currency following the theft and subsequent bankruptcy of Mt. Gox.

Cash is Also Vulnerable

As Rubin sees it, accounts that rely on credit card-related technologies are frequently compromised. Look no further than the recent Target hack for how widespread damage can be done through trusted vendors.

Although he doesn’t have a crystal ball, Rubin feels confident that one incident isn’t going to put the kibosh on bitcoins.

“Such incidents are not uncommon with new technologies and not uncommon whenever there is potential financial gain, but it doesn’t necessarily mean that we shouldn’t use it,” Rubin said. “Credit cards are stolen and so is cash.”

Tell Us What You Think



Posted: 2014-03-03 @ 9:59am PT

Like Us on FacebookFollow Us on Twitter
MAY BE OF INTEREST is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Dairy Queen Latest Retailer To Report Hack
Known for its hot fries and soft-serve ice cream, Dairy Queen just made cyber history as the latest victim of a hack attack. The fast food chain said that customer data at some stores may be at risk.
Lessons from the JPMorgan Chase Cyberattack
JPMorgan Chase is investigating a likely cyberattack. The banking giant is cooperating with law enforcement, including the FBI, to understand what data hackers may have obtained.
Who Is the Hacker Group Lizard Squad?
Are they dangerous or just obnoxious? That’s what many are wondering about the hacker group Lizard Squad, which tweeted out a bomb threat that grounded a flight with a Sony exec aboard.

Enterprise Hardware Spotlight
Intel Intros Lightning-Fast PC Processors
Call it extreme. Intel just took the covers off its first-ever eight-core desktop processor, which is aimed at hardcore power users who expect more than the status quo from their computers.
HP Previews ProLiant Gen9 Data Center Servers
Because traditional data center and server architectures are “constraints” on businesses, HP is releasing new servers aimed at faster, simpler and more cost-effective delivery of computing services.
Apple Set To Release Largest iPad Ever
Tech giant Apple seems to have adopted the mantra “go big or go home.” The company is planning to introduce its largest iPad ever: a 12.9-inch behemoth that will dwarf its largest existing models.

Mobile Technology Spotlight
iWatch Watch: What Will Apple Ask Us To Wear?
There are still more questions than answers when it comes to details about the smart watch Apple seems poised to debut on Sept. 9. In fact, nobody seems completely sure that it will be a smart watch at all.
Samsung Maps Its Way with Nokia's 'Here' App for Galaxy Phones
Korean electronics giant Samsung has opted to license Here, Nokia’s mapping app -- formerly known as Nokia Maps -- for its Tizen-powered smart devices and Samsung Gear S wearable.
Google Successfully Tests Its Own Delivery Drone
While top technology companies are engaged in an "arms race" to develop drones that can quickly deliver goods to anyone anywhere, Google has revealed it successfully tested its own version.

NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech | Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.