What is double-spending in cryptocurrency?

Double spending (double-spending) is a situation where the same cryptocurrency is used twice. This is possible due to the features of the blockchain, which is a distributed database where all transactions with cryptocurrency are stored.

How does the blockchain work?

A blockchain is a chain of blocks, each of which contains information about transactions. When a user sends cryptocurrency to another user, this transaction is recorded in a block and added to the blockchain. After that, you can't change or delete this transaction.

However, before a block is added to the chain, it may be temporarily available for modification. If an attacker manages to make changes to this block before it is added to the chain, they will be able to spend the same cryptocurrency twice.

To prevent double spending, the blockchain uses various mechanisms, such as proof of work(proof-of-work), proof of stake(proof-of-stake), and others. These mechanisms make it almost impossible to make changes to an already added block.

Examples of double spending

There have been several cases of double spending in the history of cryptocurrencies. One of the most famous cases occurred in 2014 with the Ethereum Classic cryptocurrency. Then the attacker was able to spend double spending in the amount of about $ 50,000. However, due to the fact that the Ethereum Classic blockchain uses a proof-of-work mechanism, the attacker was not able to save his changes to the block chain. As a result, his actions were canceled, and the cryptocurrency remained with the original owner of the company.

Another case of double spending occurred with the Verge cryptocurrency in 2023. The attacker spent double spending for a total amount of more than $ 1 million. However, even in this case, thanks to the confirmation mechanism, the attacker's changes were canceled.

These examples show that double spending is possible, but it is not a serious threat to the security of the blockchain. Thanks to proof-of-work mechanisms and other security measures, the probability of successful double spending is extremely low.