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Old 02-10-2014, 05:14 PM  
adultmobile
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Gavin Andresen and Jeff Garzik: Mt. Gox is Wrong, Bitcoin isn?t Broken. Mt. Gox?s issue is with a technical detail called transaction malleability, which has been known about since 2011 and even has its own wiki entry: https://en.bitcoin.it/wiki/Transaction_Malleability
This has to do with systems, such as Mt.Gox, that rely on unconfirmed transactions. For all other Bitcoin applications that rely on confirmed transactions, as they should, this is not an issue. Mt.Gox' escrow wallet service only checks transaction hash. If anybody changes transaction hash before transaction is included into block, service considers transaction invalid and returns coins back to the owner's virtual account. But transaction itself is not invalid, it is finally accepted and coins are sent to the owner.

Details: When somebody who trades on the exchange wants to take bitcoins out of the system, Mt. Gox has to transfer those bitcoins from its own wallet. When it does, it makes a note of the transaction by recording the hash. If the hash is changed before it gets entered into the block chain, then the hash that Mt. Gox recorded for a transaction and its actual unique ID in the public ledger won?t match up. A Mt. Gox customer could potentially withdraw bitcoins, have the hash changed, and then claim that never actually received the bitcoins withdrawn. When Mt. Gox checks its records, it won?t find the hash that it recorded for the transaction anywhere in the block chain. The result could be that Mt. Gox ends up paying the customer more than once.

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