After reaching a euphoric high in value of $266 USD per on Wednesday, Bitcoin suffered a massive tumble from that airy perch and MtGox seemed to be at the center of the troubles. Wednesday day and evening the exchange suffered massive bouts of lag and then finally went offline, the company behind the exchange announced that it’d been “a victim of their own success” in a release. Therein MtGox explained that its servers just couldn’t keep up with the substantial volume and not subject to a DDOS attack—of course, Thursday rolled around and then the DDOS attacks came and MtGox suspended trading for most of the day.

Now, MtGox representitives have appeared on Reddit with an AMA under the moniker /u/WeAreMtGox to explain what happened, why, and what the exchange intends to do about this sort of thing in the future. For the scalability and health of the BTC market, it’s important that exchanges do not crumple and fold under ever-increasing interest from the public. According to the AMA, Mark Karpeles, President and CEO of Mt.Gox would be replying to questions directly about recent events.

In the AMA, MtGox assured Bitcoin enthusiasts that its working on upgrading and fixing their servers and working on methods to deal with DDoS attacks:

Q: What are preliminary ideas to avoid this in the future?

We are working on a new secure trading infrastructure centered around a new trade engine we have developed that will ensure that even if our data center loses internet connectivity, mtgox.com will still stay up and available

Q: Do you intend on setting up any kind of circuit kill switch like the stock market uses?

If possible, we’d like to avoid this. We already had various kill circuits set to avoid similar things in the past, but now we are working on new solutions. The more additional security features we put in, the more lag that would result, so we are always looking for the optimum balance of security features and speed.

Q: Are you able to look at the history or orders and see what account(s) are perfect in timing large sell offs prior to the DDoSing and then near instant buys when trading resumes in order to get some type of an idea who is doing this?

We are able to, and of course we are and will continue to investigate. Of course, this is a very difficult and time consuming process, and is not guaranteed to succeed in finding the culprits, but nevertheless we will try. We are putting more of our efforts into making sure that this does not happen in the future. Rest assured, our priority is to make sure that all transactions proceed smoothly.

According to MtGox things were heating up before the DDOS hit and that the exchange has been hitting record account limits that have been taxing the servers. It takes about a month to pull in new hardware, run unit testing, prepare it, and push it into production—as a result there was no way to scale in time to deal with the sudden influx of popularity.

In the AMA, Karpeles said that MtGox was seeing over 20,000 new accounts a day, resulting in a 2-week backlog, containing 95% new accounts.

The crash has caused a certain amount of loss of confidence in MtGox and has led to a lot of calls to pull away from the exchange in spaces such as BitcoinTalk and Reddit’s /r/Bitcoin, so one questioner wondered what the exchange would do to appease traders who might have been burned by this week’s sudden volatility and loss of trading capability.

“We offered free trades for 48 hours just as a small gesture to say sorry,” Karpeles said in response to this. “This is a free market, so what we can focus on is trying to improve our services so that people want to use us: We have a lot of new services coming up, including more local presence to allow people to deposit and withdraw faster and cheaper.”

The sudden surge from $70 to a peak near $266 has been generated by the ongoing and continuous rise in attention and interested in Bitcoin by the mainstream media and the public at large. The crash, no doubt, part of a market correction in valuation and the failure of trading at the most popular exchange. Interested in the history of Bitcoin or how to get into it now that the price has wandered back down check out these resources.