Definition of double spending There is hardly anyone who has not heard of bitcoin, but very few people know that before to the emergence of this cryptocurrency attempts had been made to create digital money,...
Definition of double spending
There is hardly anyone who has not heard of bitcoin, but very few people know that before to the emergence of this cryptocurrency attempts had been made to create digital money, but all of them have failed. The reason for that lies in the possibility of copying transactions, which could be quite easily done with those currencies. Therefore, transactions were unsafe, since the same funds could be spent over and over agaim. In other words, all the initiatives crashed against the wall of double spending.
In sum, double spending is a situation where the same assets are spent twice or even more times. It is mostly cryptocurrencies that are susceptible to it, as digital tokens are easy to copy (because they are just information inits), while where physical money is used, the parties to a transaction can immediately verify whether or not the money is genuine and confirm the transaction.
Methods to prevent double spending
Bitcoin, being the world’s first cryptocurrency, also faced the double spending challenge. It was solved using the PoW protocol. It is miners’ responsibility in that network and other similar networks to verify transactions. All the transactions are recorded in a decentralized public book, which guarantees the ownership of each bitcoin holder. A transaction is considered closed once has been recorded in the blockchain.
There is another, «centralized», way of countering double spending. The use of that method provides that the entire responsibility lies with the third party acting as a guarantor. It is a less reliable method of ensuring security, as the guarantor can himself be an attacker. Therefore, the method is hardly ever used in cryptography.
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