Bitcoin falls 10% after the report suggested that a critical fault in the cryptocurrency called ‘double spending’ may have occurred | Currency News Financial and Business News

NYSE trader worried
A trader reacts as he works on the floor of the New York Stock Exchange (NYSE) in New York, US, March 18, 2020.

  • Bitcoin fell as much as 10% on Thursday after a report by BitMEX Research suggested that a critical bug called “double spending” occurred in the bitcoin blockchain.
  • Double spending is a very scary scenario where a user can spend his or her bitcoin one more than once.
  • The double spend event has not been confirmed and BitMEX has received mixed messages on the specific example.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin fell as much as 10% on Thursday, hitting its lowest level in nearly three weeks as the popular cryptocurrency was hit with a double whammy that tarnished faith in its user base.

First, Treasury Secretary nominee Janet Yellen suggested ‘curtailing’ bitcoin during her confirmation hearing on Wednesday because of its suggested use in illegal activities, and secondly, an unconfirmed report by BitMEX research suggested a critical shortfall of the name “double spending” occurred in the bitcoin blockchain.

Double spending is when a bitcoin owner can spend the same bitcoin twice. It’s a scary and dire scenario for the digital asset, and the blockchain was thought to have resolved the issue when Satoshi Nakamoto published the Bitcoin White Paper in 2009.

Early attempts to launch a digital currency system were ultimately hampered by weaknesses that could have enabled double spending and undermined trust in the system.

Read more: Goldman Sachs unveils the 8 ‘green energy majors’ that are about to jump in value in a trillion-dollar sector as the renewable race heats up

BitMEX Research tweeted on Wednesday, “It seems as though a small double spend of about 0.00062063 BTC ($ 21) has been found.”

At first, it appeared that the assumed double spend was actually an RBF transaction, and that is when an unconfirmed bitcoin transaction is replaced by a new transfer paying a higher fee. But ForkMonitor has said of the alleged double spending transaction, “No lumps (RBF) found.”

BitMEX went on to tweet, “A loss chain transaction sent 0.00062063 BTC to the address 1D6aebVY5DbS1v7rNTnX2xeYcfWM3os1va, and only 0.00014499 BTC sent a transaction in the winning chain that expended the same inputs to this address.”

If the $ 21 double spend actually happened, it could be a fatal blow to the popular cryptocurrency in the sense that the Nakamoto deficit that went into solving it actually remains vulnerable and could crumble confidence in the asset.

Institutional investors, meanwhile, continue to be exposed to bitcoin. According to an SEC filing on Wednesday, BlackRock has enabled two of its mutual funds to invest in the cryptocurrency.

Read more: We spoke to crypto platform Gemini with Winklevoss support about bitcoin, how to use fixed coins, and why regulation won’t kill the boom in digital currencies