Update December 14, 2011 – Correlation of Bitcoin price drops to security breaches

I recently created a chart that maps the value of bitcoins over the last 6 months and compares them to known major security breaches at Bitcoin sites including Mt. Gox, mybitcoin.com and bitcoin7.

It appears that all major price drops in the value of a bitcoin are correlated to security breaches and major fraud at these sites.

It seems to me that Bitcoin has had a crisis of confidence this year, and that security breaches are the cause of this.

We appear to be going through what industry analyst Gartner calls the “trough of disillusionment” in their famous Hype-Cyle model for emerging technologies. As Bitcoin gets more mature and more secure, we will emerge through the “slope of enlightenment” and Bitcoin and related virtual currencies will achieve mainstream use and productivity.

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About Dave

I have been into financial cryptography and alternative electronic currencies since the mid 1990s. I have attended the Financial Cryptography conference, and have invented patents in the fields of cryptography and security. I've built systems for Visa, the US Federal Reserve, NASD, and hundreds of banks around the world.

Posted on December 14, 2011, in Uncategorized. Bookmark the permalink. Leave a comment.

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