Bitcoin exchange vulnerability
The most high-profile vulnerable Bitcoin exchange was Mt. Gox. In April 2013, Mt. Gox was overwhelmed by a Distributed Denial of Service (DDoS) attack. The point, Mt. Gox speculated, was to destabilize Bitcoin transactions and fuel panic selling. After driving prices down, the attackers ceased the DDoS, and rushed in to buy Bitcoin at a lower price.
Life isn't fair but Bitcoin must be
Life might not be fair, but securities exchanges and currency markets require fairness. Without it, they will die. Trust is essential. Apparently, Mt. Gox was robust enough to withstand this DDoS incident. In their pursuit of unearned profits, the attackers took a selfishly short-term view. DDoS attacks and market manipulation can destabilize Bitcoin exchanges. If that happens often enough, it will undermine credibility in Bitcoin.
Mt. Gox wasn't uniquely vulnerable. In the past few months, there were other DDoS-related Bitcoin extortion incidents: BTC-China was brought down in September 2013, and BIPS, a European payment provider, experienced a DDoS attack two days ago, on 26 November 2013.
