Duplicate Transactions in Bitcoin: A Rare but Interesting Technical Flaw

There are two identical transactions in the Bitcoin network, which is caused by a technical flaw in the early Bitcoin system. This situation is possible because coinbase transactions have no transaction inputs and directly generate new Bitcoins. Therefore, two different coinbase transactions may send the same amount of coins to the same address and be constructed in exactly the same way, resulting in completely identical transactions.

These two sets of duplicate transactions occurred in mid-November 2010, with a time span of about 16 hours. The first set of duplicate transactions is sandwiched between the second set. We categorize the transaction with the ID starting with d5d2 and ending with 8599 as the first duplicate transaction because it became a copy first, although strangely, it first appeared on the blockchain after another duplicate transaction.

These duplicate transactions each involve 50 BTC, totaling 200 BTC. However, from a certain perspective, 100 BTC of that actually does not exist. As of now, none of these 200 BTC have been used. Theoretically, if someone has the private keys associated with these outputs, they could use these Bitcoins. But once used, the duplicate 50 BTC will be irretrievably lost, meaning that in reality, only 100 BTC may be recoverable.

Duplicate transactions can clearly cause confusion for wallets and block explorers, and it may also obscure the source of Bitcoin. It can also introduce some potential attack and vulnerability risks. For example, an attacker could pay someone twice with two duplicate transactions, but in reality, the recipient can only recover half of the funds.

To address this issue, Bitcoin developers proposed and implemented the BIP30 soft fork in 2012, prohibiting the use of duplicate transaction IDs for transactions unless the previous transaction ID has been used. In July 2012, the BIP34 soft fork was proposed, requiring coinbase transactions to include block height information, which further ensured the uniqueness of transactions.

However, BIP34 did not completely solve the problem. In some blocks before the activation of BIP34, there were some coinbase transactions where the first byte of the scriptSig happened to match the future valid block height. This means that at certain specific block heights in the future, duplicate transactions may still occur.

The next block that may experience duplicate transactions is 1,983,702, expected to be generated around January 2046. However, to exploit this loophole, miners would need to incur a huge cost, which could exceed 15 million USD at the current Bitcoin price. Considering the difficulty and cost of duplicating transactions, as well as the rarity of opportunities to exploit it, this loophole does not pose a significant security threat to Bitcoin.

Nevertheless, Bitcoin developers are still working hard to find a complete fix for this issue. One possible solution is to enforce the SegWit commitment. In any case, this rare technical flaw offers us an interesting perspective, allowing us to glimpse the complexity and evolution of the Bitcoin system.