Double-Spend Problem

What does double-spend problem mean?

Double-spending is a potential flaw in a digital cash scheme in which the same single digital token can be spent more than once. This is possible because a digital token consists of a digital file that can be duplicated or falsified.

There have been cases where hackers have attempted to double-spend Bitcoin by sending a fraudulent transaction to a merchant and a separate valid transaction to the blockchain, but this has met with limited success.

There are other cases of trying to out-compute the Bitcoin network security measures, but as the cost of solving Bitcoin encryption problems increases this isn’t a viable hack any longer.

As with counterfeit money, such double-spending leads to inflation by creating a new amount of fraudulent currency that did not previously exist. This devalues the currency relative to other monetary units and diminishes user trust as well as the circulation and retention of the currency.