Bitcoin Drops 11% After Alarming Report Suggests ‘Double Spend’ May Have Occurred
Bitcoin has been the subject of a turbulent rally over the past several weeks, briefly soaring to $41,940 earlier in January before its recent sharp drop. On Thursday, the world’s largest cryptocurrency fell by nearly 11%, to the lowest level in nearly three weeks, following several inconveniences that surfaced over the past week.
As reported by Business Insider, the popular cryptocurrency was hit with two ordeals this week that lead to a brief loss in confidence among its users. First, Janet Yellen, the new treasury secretary nominated by Joe Biden, exclaimed at the inauguration ceremony on Tuesday, that lawmakers should “curtail” the use of Bitcoin due to concerns the cryptocurrency is being used for illegal activities. “I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels,” she noted.
The following day on Wednesday, a debunked report from BitMEX Research surfaced, alleging that a serious flaw occurred in the Bitcoin blockchain, called double spend. The alarming phenomenon occurs when a user is able to spend the same bitcoin twice, and is a highly feared scenario in the cryptocurrency market. According to a Tweet by BitMEX, a double spend of approximately 0.00062063 BTC ($21) was detected on the platform.
The raise for alarm turned out to be a false flag, after BitMEX later reiterated with another Tweet, clarifying that what appeared to be a double spend was actually an RBF transaction. This occurs when an unconfirmed Bitcoin transaction is replaced with another transfer that paid a higher fee. However, BitMEX’s Fork Monitor revealed that there were no RBF fees detected. “A transaction in the losing chain sent 0.00062063 BTC to the address 1D6aebVY5DbS1v7rNTnX2xeYcfWM3os1va, and a transaction in the winning chain which spent the same inputs only sent 0.00014499 BTC to this address,” BitMEX said in a follow-up Tweet.
In the end, the double spend did not occur, said Bitfinex CTO Paolo Ardoino. In an emailed response to Business Insider, Ardoino revealed that the two blocks were mined concurrently, causing a chain reorganization, but not a double spend.
Information for this briefing was found via Business Insider. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
