Bitcoin Plunge has Newbies skateboarding to Google Double-Spend

File: Crypto Losses Nearly $ 700 Billion in Worst Week Since Bubble Bursts

Photographer: Chritophe morin / Bloomberg

Bitcoin plummeted more than 10% on Thursday, triggering a hunt for reasons the notoriously volatile asset was selling away. One who caught attention questioned the very viability of the ticket itself – though it was not a cause for concern.

A report in a trade blog suggested that there has been what is known as double spending, where the same ticket is used by the same person in two transactions. It’s as if someone buys a car, pays the seller, drives away with its brand new wheels and then later complains about all the money. In the case of the blockchain – or the software underlying Bitcoin and other cryptocurrencies – the transaction in question would be excluded from the final account on the digital ledger.

But, “in this case, it doesn’t look like a trader has been fooled,” said Nic Carter, co-founder of Coin Metrics, a data firm. “This doesn’t look sinister to me. My best guess is this is a software experiment or bug. ”

It’s really a feature of the crypto world, where the blockchain is records Bitcoin transactions and performs the tracking functions in much the same way as banks do during traditional transactions. For Bitcoin, it is done by consensus on a decentralized network, and typically six confirmations (or blocks) are considered safe. It’s rare to consider a payment final after only one confirmation, Carter said. What is likely is that two blocks have a discussion of the same direction but that one whole block is ultimately excluded.

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