January 10, 2014
Spending the same BitCoin twice - forgery & Counterfeit bitcoin

For any currency, the only factor that influence it’s value is trust. Bitcoin have been going through a lot of troubles recently, but new problems might pose a serious risk to the digital currency!

Unlike physical currencies that are based on some sort of commodity or power, Bitcoin is based solely on the trust in it’s system or the gamble on it’s value.
But This is about to change, when you know that certain entities might be able to spend the same bitcoin twice!

To understand that, you’ll need to understand how the system of bitcoin works, mining bitcoins is not simply solving tough mathematical equations, it is also validating other transactions done by others.

In theory, if one entity is mining 51% of the bitcoins, that means that it will start validating it’s own operations, the result would inject instability in the system, allowing to spend the same bitcoin twice in the best case scenarios. In practice, 33% of the global bitcoin computational pool, is enough to hijack bitcoin (according to a research paper)

Yesterday, a single bitcoin mining collective known as Ghash.io reached 45% of the computing power of all global bitcoin miners, that means it already surpassed the 33% and was few point short of reaching 51%.

A wide panic spread, and many left the collective leaving it at 38% of the global collective power, Ghash.io took some measure to avoid making the currency crumble, by no longer accepting any additional minors and letting existing miners, mine somewhere else as well (thus decrease mining power of Ghash.io)

In reality, Bitcoins have been double spent, and the tip of the iceberg was discovered few months ago, when miners from Ghash.io gambled on a bitcoin gambling site, using the same bitcoins more than once (which prompt the attention of bitcoin community)

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