Bitcoin Plunge prompts newbies to double Google spending

Photographer: Chritophe morin / Bloomberg

Bitcoin plunged more than 10% on Thursday, triggering a hunt for the reasons the notoriously volatile asset was selling. One that caught the eye questioned the very viability of the token itself – although that was not of concern.

A report published in a trade blog suggested that there had been something called double spending, where the same token is used by the same person in two transactions. It’s like someone bought a car, paid the seller, drove off with their new wheels, and later got all the money back. In the case of the blockchain – or the software behind Bitcoin and other cryptocurrencies – the transaction in question would be excluded from the final count on the digital ledger.

But, “in this case, it doesn’t look like a trader was defrauded,” said Nic Carter, co-founder of Coin Metrics, a data company. “It doesn’t sound grim to me. My best guess is that this is an experiment or a software bug. “

Bitcoin was created with the intention of being a digital currency that does not require any centralized authority to support it or to oversee transactions. Instead of banking software handling wire transfers, Bitcoin is processed on a blockchain – essentially a spreadsheet that records the movement of coins and their destination. Transactions are entered on the blockchain after an unaffiliated third party verifies the transaction, often in exchange for partial coins.