Is Bitcoin About to Bite the Dust?

Photo (cc) by antanacoins

Mt. Gox, the world’s largest bitcoin trading platform, is on the verge of folding.

The New York Times says that months of technological issues and what looks like a major theft will likely lead Japan-based Mt. Gox to file for bankruptcy. The Times reports:

A document circulating widely in the Bitcoin world said the company had lost 744,000 bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million bitcoins in circulation.

The virtual disappearance of Mt. Gox drove “the price of a single bitcoin below $500 for the first time since November, when it began a spike that took it above $1,200,” the Times says.

Bitcoin is the most popular virtual currency – an unregulated, Internet-based money. We recently explained more about bitcoins here. Recently they’ve become more popular as a payment method because of mobile apps. They are also available via bitcoin ATMs, including in two U.S. states.

According to CNN Money, a cyber attack earlier this month forced Mt. Gox to halt withdrawals from its trading accounts, and it has yet to allow investors to access their money.

CNN said several Bitcoin exchange executives issued a joint statement Monday in an attempt to reassure investors and separate themselves from Mt. Gox. “This tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of Bitcoin and the digital currency industry,” the statement said.

Meanwhile, Reuters reports:

Cyber criminals have infected hundreds of thousands of computers with a virus called “Pony” to steal bitcoins and other digital currencies, in the most ambitious cyber attack on virtual money uncovered so far, according to security firm Trustwave.

So, how does the future for bitcoins look? Reuters also reports:

Bitcoin critics say Mt. Gox’s apparent failure proves the unregulated currency is far from ready for widespread use. They also point to hacking attacks at other exchanges.

But proponents say it’s early days for virtual currencies and note that newer bitcoin exchanges and other startups aiming to make bitcoin mainstream are supervised by seasoned venture capitalists and financial experts.

Do you use bitcoins? What do you think of the latest developments in the Bitcoin world? Share your thoughts below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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