At a time when it was predicted by many as the next big thing in the global monetary system, bitcoin is now under a serious threat of collapse after its shutdown on Tuesday.
The bitcoin received a serious blow to its credibility with the failure of the Mt. Gox exchange. Mt. Gox is supposed to be the largest online exchange which is used to convert the bitcoins into dollars and vice versa. However, the latest shutdown in its operation resulted because of an error in the software. This allowed many hackers and crackers to rob all the digital currency stored. It occurred when a company based out of Tokyo in Japan became bankrupt after over 740000 bitcoins went missing.
Many of the prospective investors are now feeling apprehensive about investing in such an entity after this latest development. Many are saying that it is very fragile and insecure whenever a shutdown like this happens in the future. According to experts, the users of Mt. Gox may have lost bitcoins worth more than 300 million dollars.
The bad news for the bitcoin users is that since these transactions are unidentified and unregulated there is no way for them to know who stole all these bitcoins or how to recover them. The bitcoin community are aggravated by this and many have criticized Mt.Gox due to its inability to handle the situation.
The bitcoin community, though, is trying to quell the damage as they are trying to reassure bitcoin users to keep using it from the other exchanges. However only time will tell how the users are going to react. This shutdown sums up the whole week for bitcoin as it had to face other difficulties recently, such as the arrest of a Chief Executive of a bitcoin exchange and the banning of this mode of currency in Russia.