On Thursday, 21st January 2021, BitMEX Research in a tweet pointed out that there could have been a double-spend flaw in Bitcoin.
What is a double-spend flaw in a cryptocurrency?
A double-spend flaw is a highly dreaded scenario where users can spend their cryptocurrencies more than once. If it were to occur, it would cast lots of doubts about the credibility of any cryptocurrency since it would mean a crypto coin holder can sell crypto coins and still hold them after selling.
If the report was to be confirmed, it would paint a very bad picture of the world’s most used cryptocurrency. Not to mention that all eyes are due to the monster bullish rally the digital currency unleashed towards the end of 2020. Any confirmation would lead to panic among investors who in fear of losing their investments would jump into a selling frenzy resulting in a sharp decline in the value of the digital currency.
But how true is the report? What really happened?
While BitMEX pointed out that a small Bitcoin double spend was detected, Bitfinex’s CTO was quick to insist that whatever occurred was not a double spend.
The amount in question is 0.00062063 BTC, which would translate to about $21 as per the value of BTC at the time the incident occurred.
There were however attempts by BitMEX to clarify that the transaction that appeared to be a double spend was a Replace-By-Fee (RBF) transaction. But BitMEX’s Fork Monitor noted that there were no RBF fee bumps that were detected to qualify it as an RBF transaction.
But Paolo Ardoino, the Bitfinex CTO, in an email to Insider pointed out that what had happened is that two blocks were mined simultaneously and there had to be a chain reorganization to accommodate the two blocks. But it was ultimately not double-spending; according to Ardoino.
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