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Bitcoin Developers Upgrade Software Code To Prevent Another Mt. Gox Fiasco

The turmoil surrounding virtual currencies like Bitcoin has got the entire online gambling world interested as many real money casinos are popping up in a Bitcoin version. This clever little legal loophole is for the moment enabling many online gamblers to enjoy legal real money gaming in the form of Bitcoin.

Despite countries like Russia, Singapore and Japan restricting the use of Bitcoin the gamblers among us still would like to believe that innovation will overcome government efforts to interfere in what could possibly lead to a revolution not only in the online gambling world but the entire financial system we have become accustomed to.

Unfortunately bad publicity like that of the one of the largest Bitcoin exchanges Mt. Gox has done the virtual currency no favors. The good news is that Bitcoin is still in its infancy stage and it is better that problems arise at an early stage where they can be fixed. The collapse of Mt. Gox has certainly got those invested in Bitcoin eager to implement new controls that would ensure Bitcoin does follow the crash of the era.

It has now emerged that the software developers who are responsible for contributing to Bitcoin’s open source software are implementing a newer and improved version (0.9.0) of the “Bitcoin Core” infrastructure which should prevent another debacle like that of Mt. Gox. There are five changes in the new software that are aimed at preventing what is believed to have caused the fiasco of the missing Bitcoins in Mt. Gox.

The root of the problem that caused Mt. Gox to collapse was due to what is called “transaction malleability attack”.  In a nutshell these malformed transactions look like the real thing except for the fact that the illegitimate records do not sync with the Bitcoin blockchain. This in essence results in a disparity between the exchange’s records and the actual location of the funds.

Now for some bizarre developments from the now infamous Mt. Gox themselves.  It seems that officials at Mt. Gox have decided to mark April fool’s day 10 days early. They announced this morning that they have “found” 200,000 Bitcoins in a wallet which they thought was empty. This means that until the next revelation from them they have “lost” $116m less than the nearly $500m originally thought.

Without boring our readers too much Bitcoin is one of the few commodities where you don’t want it lying around anywhere where there is a network or internet. Here old school prevails and according to Mt. Gox they moved online wallets on March 7 to offline wallets in the middle off the month for security reasons, hence the “good” news. The only question one has to ask is why they somehow never managed to do this with the rest of the hundreds of millions of dollars’ worth of Bitcoins. You can be sure that we have not heard the last from this story. One doesn’t know whether to laugh or cry at Mt. Gox as they are caught up in a web of lies and deception which they have skillfully created.

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