Bitcoin Wallets Vulnerable to Double Spending Bug

While many Americans were busy barbecuing and celebrating the Fourth of July, the bitcoin blockchain was suffering from a double spending bug. A small number of the network’s miners delayed implementation of updated Bitcoin Core software, resulting in a fork in the network that created two versions of the bitcoin blockchain. The fork continued for six blocks on the fourth, and an additional three invalid blocks were added the following day.

As the name suggests, the glitch makes it possible for users to spend the same Bitcoin twice. This problem is supposed to be obstructed by a safety mechanism that checks the blockchain to ensure that Bitcoins have not already been spent.

Bitcoin Core developers issued a warning on Bitcoin.org that still remains in effect, as this is currently an unresolved issue. The new risk that funds can be double spent caused the website to suggest that providers place increased scrutiny on incoming transactions. The warning advises providers to wait an additional 30 confirmations before considering transactions valid.

Some experts argue that the root of the problem lies in the blockchain’s decentralized nature. Users have the ability to have some control over how they interact with the network, which resulted in some miners being able to neglect software changes. The network was able to carry on, however, despite their neglect.

Founder of developer API Coinkite Peter Gray noted that software update issues are common, saying:

I think it’s useful to remind people that forks happen every week on bitcoin. Typically only a single block gets orphaned in a week, and it’s not a bug or attack or anything; just the way bitcoin works.”

With only about 5 percent of the network running the outdated version of the software, the risk remained low. Bitcoin.org assured customers that if their transactions were confirmed before midnight on July 6th, 2015, they have not been affected by the bug.

Read more here- “Double Spending Risk Remains After July 4th Bitcoin Fork” (Pete Rizzo, CoinDesk)

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Mackenzie is a Marketing Fellow and a rising junior at Villanova University. She is planning to co-major in Marketing and Finance and minor in Business Entrepreneurship. As a part of her studies, she has created and presented a comprehensive marketing plan to professionals from The Vanguard Group featuring Vanguard's exchange-traded funds.

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