As everyone who has read the Bitcoin History series (or experienced the period in question) knows, the Bitcointalk forum was the crucible of the debate at the beginning. What is less known is that – to quote a poster – “DDoSing this forum coincided with dumps on the then dominant Bitcoin Exchange. Gox. “It is true, when the market was in its infancy, putting a simple bulletin board on its knees was enough to manipulate the BTC market price.
Read also: History of Bitcoin, part 24: Celebration of the first halving in 2012
Massive panic in tandem
We’re used to hearing about distributed denial of service attacks on cryptocurrency exchanges: fair last week, Okex and Bitfinex succumbed, with a sophisticated assault on the old routing of 400 gigabytes per second of traffic. DDoS attacks maliciously modify the traffic of a server, network or service by overloading it with a huge amount of unwanted traffic.
Back when the Tokyo-based mount. Gox was the dominant exchange in the bitcoin ecosystem (and bitcointalk.org the dominant chat room), its commercial activity was frequently disrupted by similar attacks, the volume of trade having dropped sharply in their wake. Stock Market Marketing Director Gonzague Gay-Bouchery, once Note that the company has suffered DDoS attacks “every day, every hour”.
There is many theories as for the authors, some speculating that new exchanges entering the market could be responsible because of the “illegal nature of Bitcoin during this period. “However, for-profit traders are the obvious candidates.
In any case, currency trading was not the only target of DDoS attacks; gambling sites, mining pools, e-wallets and forums were also badly received. A report by the IT and engineering department of Southern Methodist University found that between May 2011 and October 2013, there were 142 unique DDoS attacks on 40 bitcoin services, with “7% of all known operators” having been targeted.
Dropped by DDoS
The aforementioned poster on bitcointalk.org called DDoSing’s practice the influential forum, which caused a reliable drop in the price of bitcoin, “market manipulation in the Wild West” – and he was right. With the slow or offline forum (and other bitcoin portals such as Bitcoincharts also affected), panic ensued and large discharges quickly followed. Whoever committed the trade would then watch the price fall and buy at the bottom. This kind of scam continued all the time during Mt. Gox years, with detailed information on forum hacks here.
The ripple effects on the market for DDoS attacks on the Bitcointalk forum, in particular, have been recognized elsewhere, such as on Reddit, where an exasperated poster said, “We will go back up after the attack ends. These panic sellers never learn. It was a more optimistic take than another poster that mad “My long-term order got a margin called up because of those fucking assholes.”
Can DDoS attacks still affect the price of Bitcoin?
DDoS attacks – as indicated by incidents last week with Okex and Bitfinex – remain a problem for crypto trading, and the buying and selling of panic can still be triggered by such events. In late 2017, widespread DDoS attacks against crypto exchanges were largely blame for clearing $ 53 billion of total cryptocurrency market capitalization in less than an hour. In 2018, meanwhile, bitcoin fell $ 300 after Bitmex temporarily closed following a DDoS attack.
The Bitfinex crash caused by a so-called DDoS attack took about an hour. Almost no transaction executed but the service is now resumed. It is interesting to note that a similar attack took place yesterday against OKEx. pic.twitter.com/wpXtiWgvCv
– Larry Cermak (@lawmaster) February 28, 2020
It should be noted, however, that the basic processes and prevention mechanisms of DDoS have improved a lot since Mt. Gox years. The prospect that any trader – with the exception of a bitcoin whale – alone influences price as much as possible in 2013 is distant. Today, Twitter crypto is the closest thing we have to the Bitcointalk forum, and in the unlikely event that the social network is DDoSed, the bitcoin won’t flash.
Bitcoin History is a multi-part series of news.Bitcoin.com retracing pivotal moments in the evolution of the world’s first cryptocurrency. Read part 24 here.
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