Thursday, February 27, 2014

[emsisoft] RIP Mt.Gox

About two weeks ago, Emsisoft published a blog post on the transaction malleability crisis at Mt.Gox.  Today, the headlines read that the Bitcoin exchange is dead.

The Mt.Gox website has been taken offline.  The Mt.Gox Twitter is gone.  A leaked Crisis Strategy Draft has hit the web, apparently authored by Mt.Gox executive leadership.  This document states:
"At this point 744,408 BTC are missing due to 
malleability-related theft which went unnoticed 
for several years."
744,408 BTC = 350 million USD.
The remainder of the document reads like an exit strategy, with plans to re-launch the corporation under new leadership and branding.  Assuming this document is legitimate, Mt.Gox knew they were through.  The corporation was more or less blindsided by transaction malleability.

Is Cryptocurrency Worth it?

Small details matter.  Glitches propagate.  One small bug has enabled $350 million in theft and has crippled a multibillion dollar corporation.
This is a principle of engineering that pops up time and time again.  The devil is in the details.  The more complex a system becomes, the more chaotic too.  Grammarians like to illustrate this principle through the comparison of two sentences:
“Let’s eat Grandma!”  vs.  “Let’s eat, Grandma!”
One comma changes everything.
Computer security is the exact same way.  Overcomplicated structures built on weak foundations topple.  The temptation to make a quick buck is immense, but the methodologies necessary to do so cannot coexist with a sustainable business model.
At least we think so.
The question remains: Is cryptocurrency worth it?  Has Bitcoin met its end?
We’d love to hear your thoughts in the comment section below.

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