ItBit Takes Advantage of the Transaction Malleability Issue

What is ItBit?

ItBit, Singapore’s Bitcoin exchange

ItBit, a bitcoin exchange based in Singapore, has decided to waive certain fees for its services in a way to draw new customers. This move comes as a result of the domino effect that occurred in the bitcoin world as a consequence of Mt. Gox’s technical issue and decline.

Even though some exchanges like Bitstamp temporarily halted their withdrawals as a result of transaction malleability issue, it is back up and running. In a way to preserve the exchange, new strategies are being employed.

ItBit stated that it was not affected by the transaction malleability issue that resulted in the withdrawal suspension of other bitcoin exchanges. Rich Teo, CEO of itBit said,

“Based on the way our wallet is built, we weren’t affected. We haven’t seen any issues.”

Furthermore, he observed that the transaction malleability issue is the problem with bitcoin or the bitcoin protocol. But rather, it was the way that the particular bitcoin exchanges handled the situation or were handling the transactions being sent.

Teo stated further,

“itBit does not watch transactions in this way, and malleability of transactions does not affect deposits or withdrawals at itBit.”

For added security measure, the bitcoin exchange has decided to store its bitcoins offline to prevent future attacks from happening.

More than a $50 trading fee credit is being offered to newly registered customers who make the initial payment of $10,000. Customers whose initial deposit is between $5,000 and $10,000 will receive a $25 trading fee credit. Furthermore, those who deposit between $2,000 and $5,000 will be given $10 trading fee credit.

Technical Glitch AKA Transaction Malleability

As was stated in an earlier article posted here on CoinReport, transaction malleability in the words of Mt. Gox is a “defect, known as ‘transaction malleability’ makes it possible for a third party to alter the hash of any freshly issued transaction without invalidating the signature, hence resulting in a similar transaction under a different hash. Of course only one of the two transactions can be validated. However, if the party who altered the transaction is fast enough, for example with a direct connection to different mining pools, or has even a small amount of mining power, it can easily cause the transaction hash alteration to be committed to the blockchain.”

But, the reality of the matter is that the decline of Mt. Gox resulted from its own incapability to update its system and keep up with the new information being revealed. The value of bitcoin plunged to a new low in the wake of the news from Mt. Gox.

In the past couple of days, the value of a bitcoin does seem to be making a recovery. Regardless of the hurdles, the faith of the people in the system of bitcoin remains strong. Here is to bitcoin coming back better and stronger than ever!

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