BitMEX Research found an ingenious double-spend transaction worth 0.00062063 BTC, or roughly $21 – and doesn’t appear to be an example of this popular hacker wallet exchange.
Duplicate spending arises when the same unit of digital currency is fraudulently issued more than once. Often this is because digital files are easy to copy. While it is not possible to “copy” cryptocurrencies, there are several types of attacks that allow wrong participants to “reverse” crypto transactions and issue double coins.
On January 20, ForkMonitor BitMEX found that a participant created some blocks at the height of 666833. The exchange later wrote on Twitter notifying the public about the incident.
RBF Was Unaffected By the Double Spend
BitMEX Research, an hour later, traced the orphaned block back to RBF transactions where unconfirmed transactions got replaced with new transfers that pay higher fees. Since then, ForkMonitor has updated its suggestion to say, “No (RBF) bumps have received detection.”
Twitter user and Australian BSV attorney Eli Afram noted a mixed message from BitMEX Research, arguing that duplicate transactions should be a concern despite their low value. He stated that it looks like BTC doubled and not RBF. It was only $22, but it also could have been $22 million.
Satoshi Nakamoto’s White Paper on Bitcoin got credited with solving the double-fee problem in 2009. The challenge is ensuring that a decentralized network can independently check that the same coin has not received transfer more than once.
Vulnerability on Crypto Wallets
In July, ZenGo, a startup that builds a mobile crypto portfolio, discovered vulnerabilities in some of the most popular cryptocurrency portfolios, such as B. Ledger, BRD, and Edge hardware portfolios.
Known as BigSpender, this vulnerability can lead to an incorrect balance in your wallet as unconfirmed transactions reflect your total balance. Attackers can cancel transactions before they are confirmed, which can confuse users.
While wallet makers continue to investigate the exploits, Hayden Otto, a Bitcoin Cash supporter, warns that BTC could contain a feature replace-by-fee vulnerability. He previously used the same vulnerability in viral videos.
What makes Bitcoin unique to thousands of other cryptocurrencies is that its blockchain base layer transactions, when appropriately used, are irreversible and final. It means that if someone intends to double their bitcoin spending, that person must go back and return all transactions in the six confirmed blocks added after their transaction. In the crypto field, this technique is computationally impossible.
Other vulnerabilities in this system could, however, allow double-spend attacks to take place. If an attacker can somehow control at least 51% of the hash power of the network, he or she could reverse transactions and create a separate, private blockchain hence double-spending.