Reported “double spending” of bitcoin never happened
One of the most revolutionary aspects of bitcoin is its blockchain technology that makes it impossible for a coin to be spent twice by the same person through duplication – a phenomenon known as “double spending”.
This innovation – which has later become an important part of all cryptocurrencies – was what differentiated bitcoin from older digital money systems when it launched just over ten years ago.
This works by miners competing with each other to create new blocks on the bitcoin blockchain. When a transaction is made, it is registered in a block, along with a number of other transactions, and can never be erased or changed.
Reported by major media outlets
Therefore, there were probably many in the crypto world who were surprised on Tuesday, when news broke that the same bitcoin transaction of $22 had been registered in two different blocks.
This prompted several major news outlets – including Business Insider and Cointelegraph – to publish headlines about a double spending.
The only problem was that this was not entirely true.
Only one transaction counts
Two miners actually obtained the right to create a new block on the bitcoin blockchain simultaneously. As a result, the same $22 could be spent twice at the same time.
So, why was this not a double spending?
Well, bitcoin’s blockchain is constructed in such a way that only one of the two transactions (the one that first manages to be confirmed three times) is valid. Lucas Nuzzi, analyst at the blockchain company Coin Metrics, explains it all in more detail.
“The important thing to know is that, yes, there may be different versions of the same transaction, but only one will ultimately be accepted by nodes and users on the bitcoin network,” he writes on Twitter.
Like overdrawing a bank account
Totte Löfström, crypto expert and CEO of the Swedish crypto exchange Trijo, compares the phenomenon to overdrawing a bank account.
“It’s like when you pay with your card in a store, notice that the money has not been deducted and then are able to go to an ATM and withdraw the same money. The difference is that the bank then gives you a negative balance, but on the bitcoin network you can not have a negative balance, so it is decided instead that one of the transactions was invalid. What the consequences are in the real world is less important, as the most important thing of all is that it is not possible to spend the same bitcoin twice.”
Summary: Yes, the same bitcoin was spent twice. However, this does not matter as only one of the transactions counts.
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