Software company NexTech AR Solutions sold 130 Bitcoins for about $ 4 million, citing recent reports of a possible “double spend” on the blockchain.
What is double spend?
When a blockchain processes the same data in two blocks, double spending occurs. This is a malfunction potentially disrupting the system. Because faith in cryptocurrencies is heavily dependent on the security of these neutral, decentralized systems, a single flaw can have far-reaching consequences for the market.
However, analysts argue that the “double spending”, according to rumors, never happened.
BitMEX Research, the analytics blog of the BitMEX exchange, tweeted on Wednesday about the possibility of “small double spending of about 0.00062063 BTC ($ 21)”. Afterwards, the Bitcoin price fell 11% and fell below $ 30,000.
[1/2] There was a stale Bitcoin block today, at height 666,833. SlushPool has beaten F2Pool in a race.
— BitMEX Research (@BitMEXResearch) January 20, 2021
According to reports, this may be the product of a routine split in Bitcoin’s blockchain, also known as block rearrangement. This means that no Bitcoin is spent twice and the blockchain remains uncompromised.
Double-spending claims for Bitcoin cause software company to empty its vault
An annotator from the renowned blockchain researcher Hasu concludes: “We can very precisely know that the funds have reached their goals and are not actually spent twice.”
BitMEX Research followed up to clarify that what once looked like “double spending” is actually an example of RBF, or replaced by fee.
NexTech emptied the entire Bitcoin cache after the initial “double spending” rumor. NexTech CEO Evan Gappelberg commented on the sale in a statement:
This sale reflects our awareness that something potentially changes with Bitcoin… If the system is based on scarcity and trust in the system, then “double spending” eliminates both, essentially destroying the store of value that should be. In light of this potential outcome, we decided to go to cash as this story is still developing.