Addressing its delays in processing bitcoin withdrawals yesterday, MtGox pinned its problems on transaction malleability, a flaw in the bitcoin protocol which creates a small period of time that transaction ID’s can be changed before it gets validated on the blockchain. According to MtGox, this problem affects not only them but is applicable to all exchanges.
Following the announcement, other firms and key developers were quick to dismiss MtGox’s blame on the bitcoin protocol, citing that the issue of transaction malleability is a publicly known flaw but has been known since 2011. As such, consensus is that bitcoin isn’t at fault, but a failure on MtGox to create a viable working wallet to handle the known bug.
Providing a competitor reaction, we reached out to BTC-e to hear their opinion of the situation and whether they share the same concerns as MtGox. In addition we asked the state of affairs of their business. Below is the Q&A from a member of BTC-e management.
DC Magnates: MtGox is claiming that there are flaws within the bitcoin protocol, specifically “transaction malleability”, that have led to its current withdrawal delays. What is your opinion of MtGox’s answer?
BTC-e: There is no any problem with Bitcoin’s protocol. Unconfirmed transactions always was malleable in the Bitcoin network. We are wondering why MtGox wasn’t aware about this while working several years with the protocol. We kindly advise MtGox to hire more professional technical staff.
DC Magnates: Are the transaction problems MtGox mentioned something BTC-e is also experiencing? If not, why not?
BTC-e: This is just a MTgox problem probably because of lack of tech knowledge how the protocol works. BTC-e haven’t such issues.
Reclassifying Your Traders as "Pros" - How Can You Do It Right?Go to article >>
DC Magnates: Yesterday, BTC-e announced on its Twitter feed that deposits were temporarily halted, what is this due?
BTC-e: Temporary delay due to re-indexing blocks on the wallet. Deposits work, and were credited by batch immediately after re-indexing which took a while.
DC Magnates: BTC-e chat admin posted that BTC-e is based in Cyprus (editors note: this took place after alleged reports that BTC-e was being investigated by a Russian regional prefecture which were later retracted), conflicting earlier reports of being based in Bulgaria. Which is the correct location?
BTC-e: We never admitted about Bulgarian location. The holding located in Cyprus as we stated before in the interview to other sources.
DC Magnates: Will BTC-e be initiating any new financial transparency programs to reassure customers that their funds are safe, following worries that MtGox is experiencing financial difficulties because of accounts being seized and or hacking taking place?
BTC-e: We are transparent actually, and yes, customer funds are safe with us. We have proved this with three years of stable work with no single successful hack of the system.
Frankly speaking, we believe, that MtGox is trying to shift their problems and mistakes on the shoulders of the entire community, which negatively affects rate of Bitcoin. We are not blackmailing MtGox, our message to MtGox is that they should accept their own mistakes and post true information about what happened.