/spandiv style="float:right;width:305px;display:inline;font-size:13px;font-weight:400;font-style:normal;line-height:16px;" img src="http://news.bbcimg.co.uk/media/images/53563000/jpg/_53563173_bitcoincrash.jpg" width="304" height="195" alt="Graph of currency rate crash"span style="width:304px;"The value of Bitcoins fell from $17.50 to almost nothing in a matter of minutes/span /div div class="story-feature related narrow"Related Stories/div p class="introduction" id="story_continues_1"The virtual currency Bitcoin will "bounce back" after a hack attack caused its value to collapse, according to one of its senior developers./p pGavin Andresen said he hoped the crisis would lead to better security on sites where Bitcoins are bought and sold./p pPrices on the main exchange, Mt.Gox, fell from $17.50 (pound;10.80) to almost zero when a large number of stolen Bitcoins were dumped on the market./p pTrading was suspended and eventually rolled back to pre-crash rates./p pMt.Gox revealed details of the security breach on June 20 with an announcement on its website./p p"It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised. This allowed for someone to pull our database," the statement read./p pAround the same time, an unidentified person accessed one of the compromised accounts and sold all of its Bitcoins./p pThey then attempted to buy the coins again and withdraw them in US dollars./p pThe fraudster was partially foiled when they hit Mt.Gox's $1000 daily limit./p pThe decision to reset the Bitcoin rate to a point just before the malicious trades were placed was criticised by some users who had taken the opportunity to buy low./p p"Why should everyone who profited from the crash suffer your inability to secure the site?" wrote a user called Elments./ppAlthough the problem was caused by security failings at Mt.Gox, it has raised wider questions about the viability of Bitcoin as a virtual currency./p div style="width:280px;float:right;clear:right;font-size:13px;text-align:right;margin-right:20px;"blockquote style="font-weight:bold;font-size:16px;"p class="first-child"ldquo;Like any start-up, it could change the world but it could also be risk.rdquo;/p/blockquotespan class="quote-credit"Gavin Andresen/span span class="quote-credit-title"Bitcoin developer/span /div p id="story_continues_2""I am sceptical about its longer term prospects," said David Birch, director of Consult Hyperion, a consultancy specialising in electronic transactions./p p"There were two things here - the specific bubble (caused by the dumping of stolen coins) and the exchange mechanism."/p pBitcoin transactions are made by swapping anonymous, heavily encrypted codes which only a specific user can unlock./p pDetails of who owns each Bitcoin are distributed across a peer-to-peer network, with no central repository./p pIf an encrypted coin file is deleted, the money is lost./p pThe system has proved popular with online criminals, keen to keep their financial transactions secret, although it has a wider, legitimate, user base./p pMr Birch said the fact that so many Bitcoins were traded on a single exchange made it vulnerable to market shocks./p pHe also questioned the fundamental workings of the currency, saying that its emphasis on anonymity and decentralised nature meant there was little recourse for users when things go wrong./p pBitcoin developer Gavin Andresen conceded that current safeguards around the currency may be inadequate./p p"I have been the person saying that Bitcoin is an experiment, so you can have confidence in it as much as you can have confidence in any start-up./p p"Like any start-up, it could change the world but it could also be risk," he said. /ppThis article is from the a href="http://news.bbc.co.uk" title="Link to BBC News"BBC News website/a. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites./p pa href="http://feedads.g.doubleclick.net/~a/zc9Y92Mt34Ds016_NP6sXwPPBiA/0/da"img src="http://feedads.g.doubleclick.net/~a/zc9Y92Mt34Ds016_NP6sXwPPBiA/0/di" border="0" ismap="true"/img/abr/ a href="http://feedads.g.doubleclick.net/~a/zc9Y92Mt34Ds016_NP6sXwPPBiA/1/da"img src="http://feedads.g.doubleclick.net/~a/zc9Y92Mt34Ds016_NP6sXwPPBiA/1/di" border="0" ismap="true"/img/a/pimg src="http://feeds.feedburner.com/~r/BbcNewsTechnologyFullFeed/~4/3XoOQ6evnTI" height="1" width="1"/