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Market Analysis Report (22 Jan 2021)

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Recent reports suggest that a double-spend of $22 worth of bitcoin – 0.0062063 BTC – had been spotted, implying the funds were spent twice on the blockchain. The double-spend did not happen, and the transactions associated with it were the blockchain working as intended.

If a double-spend was possible on Bitcoin, trust was as such broken and the cryptocurrency’s value would, as such, be worthless. What happened was, instead, a chain reorganization, which according to Andreas Antonopoulos, the author of “Mastering Bitcoin,” is a “common occurrence that is part of Bitcoin’s normal operation.”

Per his words, these reorganizations are common n Proof-of-Work (PoW) blockchains. He explained that when two blocks are mined “almost simultaneously” they compete for the same height, which means they both have the same parent block in the blockchain.

“This is Bitcoin working exactly as specified 12 years ago, exactly as Satoshi outlines on page 8 of the paper.”

In the long run, however, only one of these blocks can succeed. As a block is mined every 10 minutes, only 10 minutes later would another block be mined with one of those competing blocks is its parent block.

Reorganizations containing a single block, he said, happen every couple of weeks on average, and reorganization with two blacks happen “maybe a few times a year.” Transactions included in the discarded block, he said, are either included in the valid block, or the nodes move it back into the memory pool as “unconfirmed” so it can be added to another block.

Source: https://www.cryptocompare.com/email-updates/daily/2021/jan/22/

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