BitMEX Research FUD
BitMEX’s Research team recently discovered and brought to attention a double-spending attempt on the Bitcoin blockchain, and the result was widespread FUD across the cryptocurrency market.
[1/2] There was a stale Bitcoin block today, at height 666,833. SlushPool has beaten F2Pool in a race.
It appears as if a small double spend of around 0.00062063 BTC ($21) was detectedhttps://t.co/o8lz9xagYG pic.twitter.com/IEdPu8JEjt
— BitMEX Research (@BitMEXResearch) January 20, 2021
Whilst alarming indeed if it had succeeded, the blocks’ confirmation can be easily verified using the associated URL. It is quickly apparent that only one transaction request was confirmed.
This has been a thinly-veiled attempt at spreading Fear, Uncertainty, and Doubt amongst the particularly newly invested crypto participants.
Situations like this happen often as multiple stale, or orphaned blocks are abandoned when conflicting blocks are discovered. It is a fairly common occurrence.
User sent 1st transaction (T1), then sent new transaction (T2) that would replace T1.
2 blocks were found around the same time: B1 and B2. B1 included T1 and B2 included T2. In the end B1 ended up on the winning chain.
So is it really a double-spend? @BitMEXResearch
— hhuey (@hhuey8) January 20, 2021
It is not a double spend, that scenario when 2 blocks are accepted on chain at the same time happens some times, but the solution is when the blocks are getting confirmed several times, in the end the winning chain is accepted and the loosing is dropped
— Gigadig (@Gigadig1) January 21, 2021
Bitcoin utilizes multiple confirmations for each transaction to ensure that the block is properly verified across the vast majority of exchanges and wallets. BitMex uses a one-block confirmation method which assumes that transactions based on the first block confirmation are final, which is not entirely 100% accurate as blocks can be re-organized as further confirmations happen.
Using >=2 block confirmation to validate the transaction would save the recipient from this.
While this was likely a coincidence, this is sort of the reason why 6 block confirmations is commonly required before validating the transaction.
— Veeti Pitkoilija (@email@example.com) (@VeetinP) January 20, 2021
This intentional misdirection is absolutely being used for nefarious means as it only takes minimal efforts to verify that the alleged double-spend did not happen, and was not confirmed within the block using https://mempool.space/.
It would be wise to take everything BitMEX Research presents with a healthy dose of salt, and cross-reference the evidence. BitMEX executives have been charged with operating in the United States illegally.