'Double Spend' Chaos Leads To Bitcoin Plunging Over 11% — Here's What It's All About

A “double spending” scare sent Bitcoin’s (BTC) price downwards by over 11% on Thursday.

What Happened: Double Spending refers to a situation where a user is about to spend their bitcoins multiple times.

The much-feared transaction, first reported by BitMex Research, did not take place but instead, the confusion was caused by a user that carried out a replace-by-fee transaction, reported CoinDesk.

[1/2] There was a stale Bitcoin block today, at height 666,833. SlushPool has beaten F2Pool in a race.

It appears as if a small double spend of around 0.00062063 BTC ($21) was detectedhttps://t.co/o8lz9xagYG pic.twitter.com/IEdPu8JEjt

— BitMEX Research (@BitMEXResearch) January 20, 2021

The RBF transaction refers to an attempt to send the same bitcoin again but with a higher fee, as transactions with lower fees take longer to process at times.

Why It Matters: Cointelegraph pointed to a transaction as an instance of Double Spending citing BitMEX Research on Thursday. The transaction was valued at $21 or 0.00062063 BTC.

Bitcoin’s blockchain is supposedly immutable and transactions are said to be irreversible— a Double Spend would imply otherwise.

“This doesn’t look sinister to me. My best guess is this is experimentation or a software bug,” Nic Carter, co-founder of data firm Coin Metrics said, as per Bloomberg.

Price Action: Bitcoin traded 11.16% lower at $30,964.66 at press time. Grayscale Bitcoin Trust GBTC closed 9.66% lower at $31.93.

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