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$2.7 million in Bitcoin stolen! Will latest setback kill digital currencies?

Breakout

$2.7 million in Bitcoin stolen! Will latest setback kill digital currencies?

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$2.7 million in Bitcoin stolen! Will latest setback kill digital currencies?

$2.7 million in Bitcoin stolen! Will latest setback kill digital currencies?
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What a week for Bitcoin. First, the popular digital currency suffered a massive cyberattack on its public register or ledger, via a distributed denial of service (DDOS) attack on Bitcoin exchanges. The ledger notes every bitcoin transaction, and malicious parties were entering fake transactions and mucking up exchange data. Now using the same exploit, hackers ripped $2.7 million worth of Bitcoin from Silk Road 2.0, the successor to the illicit marketplace Silk Road. 

The hit to the public ledger of Bitcoin, and now outright theft from Silk Road 2.0, is seen as another blow to the currency's viability. The DDOS attack followed a massive drop in the price of Bitcoin last week when Mt. Gox, one of the major exchanges, had to temporarily halt withdrawals after discovering the vulnerability in the Bitcoin register. For a more technical explanation of what happened, check here.

With the likes of Richard Branson and Marc Andreessen in tow, Bitcoin does have strong backers in place who can weather the present the storms and stand by the bruised digital currency. Eric Jackson of Ironfire Capital also believes there are still reasons to be optimistic.

In the attached video, Jackson says he’s bearish in the short term, but in the long term he notes “what’s undeniable [is] that the technology is where we are heading” when it comes to using digital currencies in the future. The biggest risk in the short term is “what if the U.S. [government] comes in and says, ‘this is moving too fast, and we don’t like a lot of the stuff that’s going on, and we want to put a stop to it.’”

After the latest issues with security and exchanges like Mt. Gox halting withdrawals, Jackson says “Bitcoin has a lot lower to go” in the short term on those fears, and the possibility of U.S. regulation.

What will boost Bitcoin, and other digital currencies like Litecoin and Dogecoin, is global demand. “What’s working for it in the long term besides the technology, is just that [for] countries like China and India this is a better way than the kinds of payment systems that exist over there currently...There will be a market for it, and frankly the biggest part of the move in Bitcoin over the last few months, up to $1,400, was coming out of the demand in China.”

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