endthelie.com / By Adam B. Levine, Contributing writer for End the Lie / March 14, 2013
Monday, March 11th saw calamity strike at the core of the Bitcoin system – over the last 3 years the number of users has increased exponentially, and the value along with it. In the past we’ve seen large public thefts, but Monday’s event was fundamentally different.
Note: be sure to read Adam’s previous article, “Ulterior motives behind the Copyright Alert System“
Bitcoin is basically one big public distributed ledger (known as The Blockchain) where the ownership of every Bitcoin ever created is tracked, accounted for, and verified automatically by various participants in the system. Transactions can be detected within a few seconds, but merchants generally take the hour or so to gather 6 confirmations to ensure the payment cannot be reversed.
Other participants, upon receiving news of the ownership transfer (payment), check the payer’s account to ensure that they haven’t already spent them publicly. A confirmation is the return message saying “Yes, this all seems to be in order, the value is truly available to be transferred to the intended recipient and we’ve updated our ownership records to reflect that.”
With that background in mind, on Monday the blockchain split in two without warning.