The bitcoin wallet and block explorer service Blockchain.info has been down since late last night (17th March) and it seems the issue is bigger than originally anticipated.

A problem first came to light when a reddit user started a thread about a failed ‘shared coin’ transaction. Blockchain.info responded to his post and quickly moved to disable shared coin functionality.

The move was followed with a tweet letting users know that shared coin transactions had been suspended pending the outcome of an investigation:

“We have temporarily suspended shared coin transactions while investigating some transactions that are ‘stuck’. The particular transaction in question is https://blockchain.info/tx-index/115315411/10. Rebroadcasting this transaction in bitcoind results in Error code -22.”

Shared coin transactions were re-enabled four hours later, but further issues came to light and blockchain.info was taken down soon after.

User funds ‘safe’

The Blockchain.info team traced the problem back to a database issue and it promptly tweeted that it would take “several hours” to resolve.

Blockchain.info was quick to point out that it was not hacked and that all funds were safe throughout the outage, which was the result of a database bug. Since Blockchain.info does not hold any keys, there was no risk to users’ coins.

Wallet function was not affected by the issue and user wallets could be restored even during the outage. A guide was published on the Blockchain.info blog, but it seems that many users did not get the message.

Once again the issue has proved that many bitcoin users aren’t very informed about wallet technology, and even about some relatively basic principles.

Blockchain.info was quick to reassure the public that there was no danger to funds, but the sudden influx of users looking for information quickly brought down the company blog and allowed misinformation to propagate through social networks.

In a statement Blockchain.info apologized for the extended outage and said it is working hard to restore services.

“As we mentioned previously, the outage was caused by a bug in some database handling code. Please rest assured that your wallets are safe and this outage does not affect the security of funds or the completion of executed transactions.”

Blockchain.info also published instructions on how to import wallet backups via MultiBit.

Limited damage

Despite the outage continuing for some hours, the issue has not been far reaching. A few services like ATM provider BitVendo have been affected, but the damage appears to be limited.

@blockchain is down, please avoid using the bitcoin ATM until they’re back online – https://t.co/6CIVTHvETa — BitVendo (@BitVendo) March 18, 2014

Blockchain.info informed CoinDesk that its team has been working around the clock and that progress is being made. All relevant updates will be posted on its blog.

“Once we’re there, we will publish a full post-mortem of this unusual database issue,” Blockchain said.

“Because of how Blockchain was designed, all of our users who linked an email address with their account, or manually made a backup, still have complete access and control of their bitcoins, even during the outage.”

In light of recent security breaches and the Mt. Gox disaster, it is understandable that much of the bitcoin community is edgy. At least in this case the issue seems benign, even if annoying and disruptive.

It should be noted that Blockchain.info has been on a roll in recent months. In December it acquired bitcoin price app ZeroBlock, in January it announced the creation of its one-millionth wallet, and earlier this month it rolled out a new bitcoin app for merchants.

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