- Bitcoin fell by 11% on Thursday after a report by Bitcoin Research suggested that a significant flaw in the Bitcoin blockchain called “double spending” had arisen.
- Double spending is a highly apprehensive scenario where a user is able to spend their bitcoins more than once.
- The double-spending incident has not been confirmed, and Bitmax has delivered mixed messages.
- Sign up here for our daily newspaper, 10 Things Before Opening Bell.
Bitcoin fell as much as 11% on Thursday, reaching its lowest level in nearly three weeks, as the popular cryptocurrency was hit with a double whammy that gave a confidence blow to its user base.
Previously, Janet Yellen, nominated for President Joe Biden’s Treasurer, suggested during her confirmation hearing on Tuesday that lawmakers “veiled” the use of bitcoin in illegal activities.
And second, an unconfirmed report from Bitmex Research on Wednesday suggested that a significant flaw in the bitcoin blockchain called “double spending” had arisen.
Double spending occurs when a person is able to spend the same bitcoin twice. This is a apprehensive and frightening scenario for digital assets, and the blockchain was thought to address the issue when Satoshi Nakamoto published a bitcoin white paper in 2009.
Initial attempts to introduce a digital cash system were eventually prevented by vulnerabilities that could enable double spending and reduce trust in the system.
Bitmax Research tweeted It “appears as if a small double spend of about 0.00062063 BTC ($ 21) was found.”
Read more: GOLDMAN SACHS: These 22 stocks still haven’t reached pre-epidemic levels – and are set to explode amid high incomes in 2021 as the economy continues to improve
Later Bitmax stated that it appears that double spending Was actually an RBF transaction, Which occurs when an unconfirmed bitcoin transaction is paid a high fee with a new transfer. But Bitmex’s Fork Monitor said “no (RBF) fee bumps have been detected.”
Bitmex said Another tweet: “A transaction in the losing chain sent to 0.00062063 BTC address 1D6aebVY5DbS1v7rNTnX2xeYcfWM3os1va, and the winning chain had a transaction that only sent 0.00014499 BTC to this address.
If indeed double spending occurs, it could be a fatal blow to popular cryptocurrency, indicating that the flaw Nakamoto determined to resolve remains a vulnerability that could crush trust in the asset.
Meanwhile, institutional investors keep in touch with bitcoin. Filing with the Securities and Exchange Commission on Wednesday stated that BlackRock had enabled two of its mutual funds to invest in cryptocurrencies.
Read more: We spoke to Gemini, a Winklevoss-backed crypto platform about bitcoin, how to use stable coins, and why regulation won’t hit the boom in digital currencies