Double-Spending

Double Spending is the risk of any particular cryptocurrency being reacquired and used again. Like the name suggests, if a cryptocurrency is spent more than once it means someone has exploited the blockchain.

How Double Spending Occurs?

When a block is created, it receives a hash number that includes a timestamp, information from the previous block, and transaction data. The entire information is encrypted. The block is closed once miners verify its information depending on what method they are using. After the previous block is closed, a new one is created with the timestamp, transaction information, and previous block’s hash. In the case of bitcoin, a full BTC is awarded to the miner whose machine verified the hash.

For a cryptocurrency to be used again, someone has to mine a secret block that outpaces the creation of the original blockchain. After that they would need to introduce that chain to the network before it is caught up, then the network would recognize that block as the latest set of blocks and add it to the chain. If it happens then the intruder could give themselves back any crypto they had spent and reuse it.

How to avoid Double-Spending?

Just like counterfeit money with fiat currencies, Double Spending remains a risk with cryptocurrencies. However, the likelihood of someone creating a false block and inserting into the blockchain is very low as it has to be verified by the network of miners. Currently, there is no record of a successful double spending attack on bitcoin blockchain or any other.

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About author
Disclaimer

Jai Pratap is a Crypto and Blockchain enthusiast with over three years of working experience with different major media houses. His current role at CoinGape includes creating high-impact web stories, cover breaking news, and write editorials. When not working, you'll find him reading Russian literature or watching some Swedish movie.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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