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Bitcoin Silk Road 2.0 hacked and millions stolen

Devoted Bitcoin users who had rushed to Silk Road 2.0, the reincarnation of its predecessor, were shocked Thursday by the site administrator's announcement that they had been hacked. Internet thieves made off with millions in the virtual currency, reports RT online late Thursday.

When Silk Road, the notorious marketplace of money laundering, drug purchases and murder for hire, was shut down with FBI arrest of its site owner, devoted Bitcoin users immediately transferred their Bitcoin wallets to Silk Road 2.0.

The original site was founded and operated in 2011 by an operator known as Dread Pirate Roberts and became the popular site for the newly popular crypto-currency Bitcoin. The FBI shut down the site with its arrest Sept. 30 in the San Francisco public library of Ross William Ulbricht, who now awaits trial on charges including murder-for-hire and drug trafficking.

So, now Silk Road 2.0 has befallen a sad fate on Thursday when an administrator who identified himself as “Defcon” explained on the site's forums what had happened:

“I am sweating as I write this...I must utter words all too familiar to this scarred community: We have been hacked,” he wrote. “Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the bitcoin protocol known as 'transaction malleability' to repeatedly withdraw coins from our system until it was completely empty.”

Defcon did not disclose the exact number of bitcoin that was stolen yet Nicholas Weaver, a researcher at the International Computer Science Institute, told Forbes that approximately 4,400 coins were taken, equaling about $2.6 million.

“Stop at nothing to bring this person to your own definition of justice,” he wrote.

Due to the transaction malleability which caused the shutdown of the Mt. Gox exchange one week ago users of SR 2.0 questioned the truth of the admins at the site. The Mt. Gox site has been down due to a flaw in the Bitcoin program which allows double transaction of coins in a block chain that are produced by a ‘miner’ programmer who creates a blockchain of bitcoins with a complex algorithm.

Some angered users responded to the news: “Oh this is rich. How many users called for the shutdown of SR2 to fix the problems? They were ignored,” wrote one skeptic. “Admins did this. Not some vendor.”

Defcon denied that he was involved in the site's compromise. “I didn't run with the gold,” he said. “I have failed you as a leader, and am completely devastated by today's discoveries...It is a crushing blow. I cannot find the words to express how deeply I want this movement to be safe from the very threats I just watched materialize during my watch.”

Bitcoin was the answer in 2009 by the person or person using the pseudonym, Satoshi Nakamoto, who developed the algorithm to produce 21 million bitcoins in a peer-to-peer currency to thwart the greed of Wall Street bankers and financial leaders. Greed was not considered good in the development of the concept to produce bitcoins by programmers who are called ‘miners’ and produce a block of bitcoins for the fee of a small percentage of the bitcoin block they produced.

To view more articles on Bitcoin see the list below in Author’s suggestions and view the video atop this article discussing the Bitcoin transaction issues and shutdown of Bitcoin exchanges.