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Is Transaction Malleability a Bitcoin Problem?

On Feb. 7, Bitcoin exchange site Mt. Gox reported that it was experiencing delays and would be restricting all withdrawals. On Feb. 10, Mt. Gox blamed the delays on a Bitcoin protocol related issue known as transaction malleability. "A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur," Mt. Gox stated. "Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent."

Mt. Gox is no longer the only Bitcoin exchange experiencing delays related to transaction malleability. Bitstamp, another Bitcoin exchange, began suspending withdrawals on Feb. 11 in response to transaction malleability based attacks.

"This is a denial-of-service attack made possible by some misunderstandings in Bitcoin wallet implementations," Bitstamp noted in a statement. "These misunderstandings have simple solutions that are being implemented as we speak, and we're confident everything will be back to normal shortly."

Read the full story at eWEEK:
Bitcoin Hit by DDoS Transaction Malleability

Sean Michael Kerner is a senior editor at InternetNews.com. Follow him on Twitter @TechJournalist.