Social and mainstream media lost their collective minds last week as reports of a bitcoin double-spend transaction spread everywhere from Bloomberg to CoinTelegraph. It took quite a while before everyone realized there actually wasn’t a double spend...kinda.

Why was everyone spooked?

BitMEX’s research arm first noticed the one-block reorganization and tried to offer a simple explanation of the fairly routine event on Twitter. But the words “double spend” quickly became sensationalized and widespread.

Misinformed reporting on the incident even caused one publicly traded technology company to liquidate its entire $4 million in bitcoin. 

Technically, a double-spend transaction was attempted; one block was reorganized. But, given bitcoin’s probabilistic transaction settlement design, this occurrence is not uncommon, and it was resolved by the next block. (Deeper reorganizations, however, are of course much more problematic.) 

The total value of the attempted double spend was $22, and the one-block chain split only happened after the sender attempted three different times over a period of a couple days to have the transaction included in a new block by raising their fee spend. Coin Metrics on-chain data analyst Lucas Nuzzi explains the timeline of these events in this Twitter thread.

Here are three other Twitter threads on the incident that go into more detail.

• Thread by BitMEX Research

• Thread by Andreas Antonopoulos

• Thread by Peter Todd

To further clarify the “possible double spend,” which BitMEX Research notes again was resolved after one block, the below diagram was posted to Twitter by their researchers. The bottom line is: this one-block reorg is not uncommon and certainly not a reason to panic, let alone liquidate one’s entire bitcoin holdings.

Drama around publicly traded mining company Bit Digital is intensifying after a class-action lawsuit was filed in the Southern District Court of New York last week. The lawsuit seeks damages for shareholders after J Capital Research released a report earlier in January calling Bit Digital a “sham bitcoin business.”

The mining firm responded by flatly calling the accusations “false.” 

In February 2020, Bit Digital started mining cryptocurrency after pivoting from a car rental business and other prior ventures before that. According to its SEC filings, Bit Digital says it operates tens of thousands of ASICs spread throughout Asia and the U.S.

Doubts cast by J Capital’s research have not only prompted legal action but also caused the company to lose over $130 million. This loss comes shortly after the mining company surpassed $1 billion in market capitalization.  

Shares of Bit Digital are currently trading around $16, down over 30% since J Capital published its report. The company now has a market value below $786 million.

• Mining difficulty increased again. 

  • The latest difficulty adjustment pushed difficulty above 20.8 trillion, a 1% upward adjustment from 20.6 trillion at the end of the previous epoch. 

• Bitcoin’s price is still trading above $30,000 (barely). 

  • Bitcoin is chopping around the mid and low $30,000 range, briefly dipping below $31,000 on Sunday and almost to the same level Tuesday morning. 

• Poolin’s hashrate token’s volatility is settling down.

  • After soaring above $200 a couple days after its launch, Poolin’s pBTC35A hashrate token has leveled off in the $90 - $100 range, per data from CoinGecko . At its peak so far on Jan. 13, the token recorded over $22 million in daily volume on Uniswap. 

• Marathon bought $150 million worth of bitcoin.

  • Marathon Patent Group isn’t just mining bitcoin. They bought $150 billion worth to hold in their corporate treasury. CEO Merrick Okamoto said he wants the company to become a "pure-play bitcoin investment option" for Wall Street. (CoinDesk) 

• A public Chinese gaming company wants to mine bitcoin.

  • Nasdaq-listed gaming company The9 said it has agreed to buy over 26,000 ASICs, which a subsidiary will operate and manage as part of its new mining venture. The9 brought on former Canaan director Jianping Kong to help launch the project. (CoinDesk)

• Hut 8 gets $11.8 million to buy more ASICs. 

  • Toronto-based Hut 8 secured $11.8 million from Foundry to buy over 5,000 Whatsminers from MicroBT. The price tag also includes an additional $2.9 million deposit from Hut 8. (CoinDesk)

• Some Ethereum mining pools formed a cartel to thwart a EIP 1559.

  • Eight mining pools (roughly 30% of Ethereum’s hash power) are organizing to prevent the implementation of Ethereum Improvement Proposal (EIP) 1559. The upgrade would burn the majority of  transaction fees earned by miners in a bid to address fee volatility. The proposal has not been formally accepted, but has received strong support from some Ethereum developers. (CoinDesk) 

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