The market panicked due to a rumor, but then everything cleared up, and Bitcoin is now recovering.
A drastic drop in the bitcoin price due to rumors, misinformation, and confusion created a state of panic and uncertainty in the crypto-world. The cryptocurrency cost crushed the ground with a figure below the—$ 30,000 for the first time in a month.
Although Bitcoin has already managed to cross that line and its price begins to recover (at this time, it is trading over USD 31,680), it is essential to know what happened, what caused the stampede.
Different media attributed the sudden drop in price to rumors of a “double-spend,” which is a term to describe the phenomenon of a coin being spent twice in the Bitcoin protocol.
Andreas Antonopoulos claimed on Twitter: “There were headlines about a ‘double spend’ on #Bitcoin! Many understood that it means that Bitcoin has a catastrophic failure (it does not have it) or that the network is not secure (it is) or that Bitcoin broke down in some way (it is not).”
When block 666833 appeared posted, two conflicting transactions happened (which seemed to be a double-spend attempt). It is usual in a blockchain to discard the ‘bad’ block and spread the excellent block through the network. Bitcoin worked the way it needed to work, and the network proved its credibility. The bad block was left alone with a commit, while the excellent block gained more than 100 commits.
But several media said that there had been “double spending” due to a misinterpretation of the facts, a statement that produced the so-called a FUD (an expression in the crypto-world to qualify a commercial or political strategy, which works through the dissemination of negative, confusing or biased information).
It is an atypical event, but it ends up being usual. How things went out of control shows that the media coverage needs to reinforce the facts instead of circling bland theories that could lead to harm in the crypto-environment.
Antonopoulos’s Twitter Thread and Some of his Tweets about the Topic
In a thread of 24 tweets, Antonopoulos denies all the rumors and explains what happened. He explains in the line the difference between malicious double-spending and a natural reorganization of the blockchain.
The expert highlighted that one-block reorganization happens naturally on average once every two weeks. Two-block reorganization occurs once a year or so, and three-block reorganization has never happened to date. That is why the “3 confirmations rule “gained strength in the community as a legitimate proof of a BTC transaction’s immutability.
A chain reorganization on the Bitcoin blockchain occurred, which is a joint event that plays a role in the regular operation of Bitcoin. It is the result of a decentralized consensus under Proof of Work.
Two blocks quarried almost simultaneously, and both were competing for the same height, meaning they had the same parent block and were trying to expand the chain from the same block. Only one can be successful in the long run.
By: Jenson Nuñez
