Thankfully those two duplicated transactions were never spent when they first appeared. Because of that, I chose to not not add them to the UTXO at all when they first appear. When the duplicates appear they get added to the UTXO successfully because the earlier, conflicting versions are not present. That way you can carry on assuming that all transaction hashes are unique, and enforce that rule over the entire blockchain.

Date: Mon, 14 Jul 2014 13:18:22 +0200
From: mike@plan99.net
To: me@ricmoo.com
CC: bitcoin-development@lists.sourceforge.net
Subject: Re: [Bitcoin-development] Self-dependency transaction question...

Conceptually all transactions in the block chain lie on a single timeline. The fact that we quantise that timeline into blocks is in many ways neither here nor there - it's still a strict line. 

What can happen and you must be aware of is duplicated transactions. Satoshi sort of assumed this could never happen because everything is hash based, but forgot that duplicating coinbases is possible and at one point this did happen. It was banned by a rule change afterwards but you still must be able to process the older parts of the chain that have this. There is a BIP that covers the new rule.


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