The glitch that will help kill Bitcoin

As the worlds first, and most popular, cryptocurrency, Bitcoin has by now suffered every possible setback a payment project could encounter.

It was implicated in a huge drug bust when the Federal Bureau of Investigation took down the Silk Road electronic exchange.

It has experienced regulatory pressure in forms ranging from trading restrictions in China to a recent threat of a complete ban by the Russian authorities.

It survived a scare involving an apparently Ukraine-based operation taking over close to half of the currencys mining.

It absorbed Apples decision to remove all related software from its app store. Now, a top Bitcoin exchange, where the cryptocurrency could be traded in for government-issued money, has hit a snag that forced it to stop Bitcoin transfers to outside addresses.

In the face of all this adversity, Bitcoin remains amazingly resilient, which could mean one of two things: Either it is here to stay, or the people who invested in it during a speculative bubble are reluctant to accept losses and still able to prop up the market with their trades.

The latest problem occurred when Japan-based MtGox, the biggest Bitcoin exchange outside China, halted outside transfers from its clients Bitcoin wallets on Feb 10.

The exchange explained that this was due to a glitch in the Bitcoin software which made it possible to alter transaction details after the fact, creating the possibility of double spending, a nightmare the system was built to avoid.

The technical problem is known as transaction malleability. The Bitcoin Foundation, the nonprofit organization that maintains the software, quickly countered that MtGox was itself at fault. Bloomberg

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The glitch that will help kill Bitcoin