

Ask HN: If Blockchain and Bitcoin tech are secure, how did Mt. Gox happen? - hackaflocka

Supposedly there&#x27;s a public ledger that keeps track of all Bitcoin transactions.<p>Supposedly Blockchain &#x2F; Bitcoin are awesome.<p>So how did Mt.Gox manage to lose track of Bitcoins?
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jordhy
At this point, public knowledge is that MT Gox didn't manage well the
transaction malleability issue of Bitcoin's implementation. Here's a related
article with a couple of excepts to help you understand.

10 things you need to know about Mt. Gox's Bitcoin implosion - From PC World
([http://www.pcworld.com/article/2105280/10-questions-on-
the-m...](http://www.pcworld.com/article/2105280/10-questions-on-the-mt-gox-
implosion.html))

1\. Stolen Passwords Success seems to have bred complacency at the highest
levels of Mt. Gox. In June 2011, about $8.75 million in bitcoin was stolen
from the exchange through an online attack using stolen passwords. Any
security improvements implemented since then were obviously not up to scratch
if the latest loss is the result of a massive heist. Anecdotal accounts have
suggested a corporate culture that tended toward laissez-faire rather than
strict diligence.

2\. Transaction Malleability How do you lose 850,000 bitcoins? That, of
course, is the million-dollar (or bitcoin) question. The coins may be missing
due to a long-known security flaw called transaction malleability that can in
some cases enable fraudulent withdrawals. Some observers and investors,
however, are accusing the company of fraud, even alleging the collapse was an
orchestrated scheme. Other commentators have said Mt. Gox had the best
intentions but was just poorly managed.

------
wmf
Mt. Gox did not use the blockchain because it's too slow and expensive for
daytrading. And the blockchain cannot currently properly record currency
exchange transactions.

