Bitcoin Off To A Rocky Start In 2015

Bitcoin fell sharply lower this week, dropping from $267 to $224 on Tuesday. The crypto-currency that was said to usher the world into a digital age seems to be losing momentum as consumers lose confidence in the currency’s validity and security. 

Hacking Attacks

The currency has proven extremely vulnerable to online hacking groups that are able to break into exchange databases and steal large amounts of Bitcoin. Earlier this year, UK-based Bitstamp was breached and 19,000 Bitcoin were stolen. The attack served to remind the public of last year’s Mt Gox hacking attack and added to the perception that Bitcoin exchanges are unsafe.

Mining Issues

Bitcoin is made possible by because of the people who ‘mine’ the currency. Miners generate new Bitcoin by doing calculations and adding to Blockchain, Bitcoin’s ledger. Because the price of Bitcoin has dropped so dramatically, many firms no longer turn a profit from these mining operations. On Monday CEX.io announced the suspension of its mining operations, saying that prices below $320 made mining economically impractical. However with bitcoin prices looking unlikely to recover anytime soon, CEX.io could face a difficult road ahead.

Legal Trouble

CoinTerra, a Bitcoin mining company, is wrapped up in legal trouble at the moment due to a failure to pay off it’s loans. After being blocked from accessing its facilitates missed payments on electricity and rent bills, CoinTerra defaulted on $4.15 million worth of payments to its mining customers. CoinTerra is now suing the data center that blocked its access, which caused the default.