Bitcoin plunged more than 10% Thursday (Jan 21), sparking a hunt for reasons the notoriously volatile asset was selling off. One that captured attention questioned the very viability of the token itself -- though it turned out not to be cause for concern.
A report in a trade blog suggested that there had been what’s known as a double-spend, where the same token is used by the same person in two transactions. It’s like if someone bought a car, paid the seller, drove off with their brand new wheels and then later yanked back all the money. In the case of the blockchain -- or the software that underlies Bitcoin and other cryptocurrencies -- the transaction in question would be excluded from the final tally on the digital ledger.
But, “in this case, it doesn’t look like a merchant was defrauded,” said Nic Carter, co-founder of Coin Metrics, a data firm. “This doesn’t look sinister to me. My best guess is this is experimentation or a software bug.”