News recently broke that a double spend, bitcoin is processed for two separate transactions when only one was meant to occur, occurred on the Bitcoin blockchain. A double-spend would be disastrous news for Bitcoin as that was one of the main problems that Bitcoin was created to solve.
Fortunately for Bitcoin and holders of the cryptocurrency, a double spend did not occur. In fact, what occurred is exactly what was supposed to happen on the Bitcoin blockchain. We will explain exactly what happened with this “double spend” in this article and why the media misreported it.
Here’s What Really Happened With This Double Spend
Basically, what happened with the recent “double spend” is that a transaction was sent with 1 satoshi/byte transaction fee, which meant it would take forever to be mined on the blockchain. The sender then resent the transaction with a higher transaction fee to try and jump the previous transaction.
However, the low transaction ended up being mined on a block before the higher fee transaction. Subsequently, the higher fee transaction was then mined on an “orphan block” on the blockchain.
In other words, one transaction was mined on two separate blocks of the blockchain, which does technically make it “double spend.”
The good news is that Bitcoin has a protocol in place to handle this scenario and prevent a double spend from occurring:
Separate blockchains. It was even discussed in the original whitepaper by Satoshi Nakomoto.
That’s right, the higher fee transaction actually ended up on a separate blockchain that is not considered part of the main blockchain ledger. This means that one confirmation went through with that transaction to make it a double spend, but the network noticed the double spend after that confirmation and disregarded the block from the ledger that updates the wallet.
No wallet received two transactions instead of one and no extra bitcoin was created. Therefore, no double spend occurred on the blockchain.
What Caused The Confusion?
The confusion was likely caused by a poor understanding of how mining on the blockchain operates. It’s more complicated than this, but basically miners can mine the same block at the exact same time. When this happens it creates a double spend except that the miners then choose the next blocks to build the main blockchain history.
The other block that the other mining pool mined is then disregarded from the blockchain.
Again, this is how Bitcoin is supposed to operate. The confusion arises because many journalists writing these articles do not have any understanding of blockchain technology.
Is a Double Spend Possible on Bitcoin?
A double spend is probably not possible on Bitcoin. If it is possible, then a double spend has either not occurred or been noticed for the past 11 years on the blockchain.
For a double spend to occur it would require collusion of over 51% of the miners on the blockchain. And there simply does not seem to be any incentive for miners to do that because a double spend would likely kill Bitcoin.
Remember, Bitcoin miners receive payment in Bitcoin, so they would shoot themselves in the foot if they decided to collude and cause a double spend on the blockchain.
Would a Double Spend Kill Bitcoin?
Yes, a double spend would kill Bitcoin. There is really no doubt about that at this point.
The trustworthiness of the blockchain network to not double spend any coins is what keeps the value of Bitcoin so high and is why people use it.
Now, what would most likely happen if a double spend occurred is that Bitcoin would fork after the double spend and a solution would be created. The blockchain with the double spend would likely become irrelevant as people would no longer trust it.
The fork and ensuing chaos would crater the price of Bitcoin. However, Bitcoin is extremely resilient and would more likely than not find a way to recover it, but it would probably take a few years for the recovery to occur and trust in Bitcoin would be damaged for years after the double spend.
The good news is that a double spend on the blockchain is exceedingly unlikely at this point. Minor problems might arise or people might falsely claim that a double spend has occurred, but further investigation would most likely prove that a double spend did not occur.
Has a Double Spend Ever Occured on The Bitcoin Blockchain?
As mentioned previously, it’s possible a double spend may have occurred on the Bitcoin blockchain. However, the following criteria likely apply to any double spend that occurred:
- It occurred when the blockchain architecture was different.
- No one noticed it.
The first point is the most likely scenario if a double spend did occur on the blockchain. If one did occur, then it was likely when Bitcoin was first created and the architecture was different. Less miners were on the network in the early days and Bitcoin was used for fun in the first year of its existence, so a double spend may have occurred as Bitcoin enthusiasts may have attempted to “break” the programming.
Those situations will not arise due to the size of Bitcoin, so a double spend that occurred in the past is irrelevant.
The second point of no one noticing a double spend is also exceedingly unlikely. There are computer programs and people that analyze individual blocks for any unusual transactions or suspicious activity – a double spend would certainly be noticed by someone sniffing around. Not to mention that a recipient of a double spent Bitcoin may report the double spend.
For all relevant purposes, a double spend has most likely not occurred on the blockchain.
Overall, there has never been a known double spend on the Bitcoin blockchain. It seems exceedingly unlikely that a double spend will ever occur on the blockchain because there are so many checks in place to ensure that one does not occur.
Additionally, miners are incentivized to not allow a double spend to occur on the blockchain as that would make the bitcoin they receive for mining blocks worthless.