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Comment by joejohnson | Hacker News Reader

This article does not understand bitcoins. The value of BTC did not drop on Sunday. What happened was the value of BTC, on on exchange, dropped momentarily because of a hacker selling large amounts very quickly.

MT Gox was compromised, but bitcoins themselves do not rely on MT Gox or even exchanges. The currency is fine.

This "experiment" is largely unaffected by this single market crash.

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This incident has just shown that Bitcoin is a serious store of value, and hackers are targeting the exchanges because they are the weakest link in the chain.

Unfortunately, right now, it's still amateur hour with MtGox running an insecure site and generally lax security practices - vulnerable to XSRF, and apparently they let one of their developers download a full copy of the MySQL database to his home PC which was compromised.

Now that there is real money in Bitcoin, the free market should start to weed out the exchanges that have lax security. We already appear to have more professional exchanges like Tradehill opening that seem to take security more seriously.

Though the 'experiment' has shown the grave consequences of a security breach. They might be able to fix the current problem, but markets are about trust, and the doubt that this causes cannot be undone. We all know it can, and will, be hacked again.

Similar things have happend on stock exchanges, with automated micro-second trade algorithms running wild. Now those exchanges have learned from past crashs and installed limits and market fluctuation. Bitcoin exchanges will learn and do similar things. It's only just starting.

It is just starting, and there's a long way to go before its fair to compare any aspect of them to your everyday stock exchange that we know. And again, they have to retain trust to get there. Who's to say these countermeasures and limits won't be specifically targeted by a future hack? They're too easy a target.

The price has fallen from $17 pre-crash to around $12, but I can't tell if that's the risk being priced in or just the usual 40% daily volatility.

In the past 6 months, I have been issued 3 new credit cards due to security breaches. The stock market has crashed a couple times. Despite these breaches or crashes, I'm not going to cancel my cards and transfer everything to cash.

Markets are about risk, and higher risk equals higher return (or loss). Trading in a market like stocks, commodities, forex, bitcoin, etc. carries inherently high risks.

You said it right. That is what these "hacks" may be designed to do so it's important to see it for what it is and not to let the idea die.

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