The Bug in the Bitcoin Protocol

In this podcast episode, the hosts discuss a bug in the Bitcoin protocol that originated with the first Satoshi bug. The bug allowed for two identical transactions to exist, and the original transaction would essentially disappear when a new one was created. This created a consensus failure in which the ownership records for these identical transactions would diverge, leading to chaos in the network. To address this bug, the BIP-30 rule was introduced in 2012, which ensured that no two transactions with the same hash could exist simultaneously. However, this rule added inefficiencies and was later optimized in 2015. In 2017, it was realized that there could still be exceptions to this rule in earlier coinbase transactions. To prevent any potential exploitation of this bug, the fix was deployed in 2018, and now Bitcoin core nodes start checking BIP-30 from block 1,983,702 onwards. Various other proposals, such as making segwit mandatory or adding the block height to the coinbase transaction, have been discussed as potential solutions. However, the consensus is that BIP-30 still remains the simplest and most reasonable approach. As of now, we have approximately 20 years to find a permanent solution to this bug before Bitcoin core nodes start checking BIP-30 again.