UPDATE: See our analysis of this DDoS in our newer post: Have We Reached A Turning Point For Bitcoin Exchange DDoS?
Quite a day already for Bitcoin exchanges, but I want to remind anyone reading this: exchanges and other private companies are not bitcoin. We are in the infancy of what may be the greatest fundamental shift for human society of the 21st century. There are going to be hiccups as the market develops, that does make the underlying bitcoin protocol any less viable. In fact, there are even some glimmers of hope in the darkness. See below for an analysis of today’s developments:
Gox has been DDOS’d again. For a more detailed analysis of what and how this is caused, see our post from the last time this happened. A Gox DDOS is barely news at this point, but I would like to draw your attention to something very different about today’s attack: the patience with which the market handled the news. Consider the B/A spread during the last DDOS vs. today’s. Objectively speaking, the latter looks like a far more mature market with less influence from buy-and-fly speculators.
As you’ll see from the images below, Bitcoin-24 isn’t exactly living up to it’s name at the moment and has temporarily suspended operations. Not to be outdone, BitFloor has closed operations indefinitely and hopefully will settle all cash and BTC accounts with their users.
Not only will this cause a headache for the users of these exchanges, but we’re now also looking at a strong consolidation of trading volume to Mt. Gox, which is clearly a negative for the market in general, given their instability. Gox is already doing ~80% of total market volume. The other exchanges were doing just over 3% combined of the total market. That may not sound like much, but it’s 15% of the remaining market not currently on Gox – a far more disconcerting figure.
Update: Blockchain.info – one of the most robust sites for tracking bitcoin transactions, as well as a great host for a web wallet, is also down due to DDoS attacks (thank you to Reddit user BlacksmithTM for pointing this out and for those of you who brought it to our attention – we appreciate whomever is sharing our articles and readers keeping us informed). Blockchain.info is aware of the situation and working with their service provider to update their server.