Double-Spending

Double-Spending

Double-Spending is a potential and specific flaw of digital currency: the same asset can be spent more than once.

Unlike physical money, a cryptocurrency asset exists as information that can be copied and duplicated in more than one payment. Close analogs in traditional economics: counterfeit money, which is a copy of real money; resale of the same property.

Preventing double-spending in a centralized currency (e.g., in a banking system) is carried out with the help of a trusted third party who verifies if the asset has not been previously spent. 

Decentralized systems solve the problem of double-spending by storing identical copies of the transaction ledger in the blockchain. If two different transactions attempt to spend the same token, only the transaction that was written to the block first will count. The presence of a time range between the spending of an asset and the recording of it by all members of the network carries a potential threat of fraud for double-spending.

There are several types of such fraud, usually directed against sellers who do not care about confirming payments. Another type of such fraud can be an attack on the entire blockchain, where an attacker tries to fake information about transactions.

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