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What is the Double Spending Problem?

This was the biggest problem with digital currency. It was due to the fact digital information can be reproduced relatively easy.

This issue was never brought up with physical currencies because it’s not easy to replicate.

Imagine you had a digital token. You could easily make it a copy of the token and send it as payment and just keep your original one.

 

So, how do we eliminate double-spending?

Minions Double SpendingIntroducing Bitcoin…

If you want to know more about Bitcoin see “What Is Bitcoin?

The important part is it operates on something called blockchain that keeps transaction logs to confirm the authenticity of each transaction and prevents double-counting.

This is known as Bitcoin Mining. To simply, when someone mines they prove every transaction is real, and are rewarded with some coin of their own. Known as “Proof of Work”

If you want to learn more about mining see “Bitcoin Cloud Mining“.

 

How Bitcoin Eliminates Double-Spending

Here’s what we’ve established so far….

Blockchain is a public transaction log.

Bitcoin operates on the Blockchain.

Therefore, Bitcoin requires all transactions to be shared in the Blockchain, no exception. So, every Bitcoin transaction is public knowledge.

This prevents all double-spending or any other type of fraud.

Bitcoin is fraud proof. To this day, no one has been able to hack Bitcoin.

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