So, immediately after I published my Crypto YouTube channel, bitcoin crashed to levels not seen since 2 weeks ago! Bitcoin started January strong and rallied to $42K, before commencing a sharp pull back to $30K. It sort of recovered and was hovering around $35K when it began falling again, this time to around $29K. The fall over the last 48 hours has been attributed to news that double spending had been detected on the bitcoin blockchain.
Bitcoin double spend what?
In case you didn’t know, the strength of blockchain technology and bitcoin in particular is that it has solved for double spend.
Solving the double spend problem
Double spending occurs when a digital currency is duplicated and spent twice. This is a common problem because a digital currency is simply code on a computer network, and can potentially be manipulated.
The growth that bitcoin witnessed over the last decade was predicated on bitcoin having solved for the double spending problem, and is secure enough to be able to maintain a transparent and accurate ledger of all spends and transactions.
The double spend saga
Bitmex Research first reported a small double spend detected on the blockchain.
If it were true, then the entire structure and validity of Bitcoin as an asset will have been hugely undermined, however small the amount was.
But after one block, it was resolved, and in the end, only one transaction was accepted and no double spend happened.
We can all breathe a collective sigh of relief, and Grayscale can continue scooping up unexpectedly cheaper coins for another day or two.
As far as I can tell, this news has been largely debunked, not that anyone really believed it in the first place, because if they did, Bitcoin will now be trading at near $0, as opposed to slowly climbing back above $31K as I am typing this.