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Bitcoin drops 11% after report suggests a critical bug in cryptocurrency called ‘dual consumption’ may have occurred | Currency News | Financial and business news



NYSE traders worried
  • Bitcoin fell as much as 11% on Thursday after a report from BitMEX Research suggested that a critical bug called “double-consumption” had occurred in the Bitcoin blockchain.
  • Dual consumption is a very dreaded scenario where a user is able to use their bitcoins more than once.
  • A dual-consumption event has not been confirmed and BitMEX has given mixed messages.
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Bitcoin fell as much as 11% on Thursday, hitting its lowest level in nearly three weeks when the popular cryptocurrency was hit with a double whammy that pushed faith in its user base.

First, Janet Yellen, President Joe Biden’s candidate for secretary of state, suggested during her confirmation hearing on Tuesday that lawmakers “restrict” the use of Bitcoin because of its use in illegal activities.

And second, an unconfirmed report from BitMEX Research on Wednesday suggested that a critical bug called “dual consumption” had occurred in the Bitcoin blockchain.

Dual consumption is when someone is able to use the same bitcoin twice. It is a dreaded and eerie scenario for the digital asset, and blockchain was considered to have solved the problem when Satoshi Nakamoto published the Bitcoin White Paper in 2009.

Early attempts to launch a digital cash system were ultimately halted by vulnerabilities that could have enabled dual use and undermined trust in the system.

BitMEX Research tweeted that “it appears that a small double consumption of around 0.00062063 BTC ($ 21) was detected.”

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BitMEX later said that it appeared that the dual consumption was actually an RBF transaction, which is when an unconfirmed bitcoin transaction is replaced with a new transfer that pays a higher fee. But BitMEX’s Fork Monitor said that “no (RBF) fee bump has been detected.”

BitMEX said in another tweet: “A transaction in the losing chain sent 0.00062063 BTC to the address 1D6aebVY5DbS1v7rNTnX2xeYcfWM3os1va, and a transaction in the winning chain using the same input sent only 0.00014499 BTC to this address.”

If the double consumption actually took place, it could be a fatal blow to the popular cryptocurrency, indicating that the mistake Nakamoto set out to solve is still a vulnerability that could shatter confidence in the asset.

Meanwhile, institutional investors continue to gain exposure to bitcoin. Submissions to the Securities and Exchange Commission on Wednesday said that BlackRock had enabled two of its mutual funds to invest in the cryptocurrency.

Read more: We spoke with the Winklevoss-backed cryptocurrency platform Gemini about Bitcoin, how to use stable coins, and why regulation does not kill the boom in digital currencies

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