What is double spending?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
Double spending means using the same coin twice, and it is the core problem blockchains were designed to solve. Once a transaction is in a block and further blocks stack on top, reversing it becomes progressively harder. For a recipient, the defence is simply not treating a payment as settled until enough confirmations exist.
Key points
- Spending the same coin twice
- Each additional confirmation makes reversal harder
- An unconfirmed transaction is not a completed payment
- The larger the amount, the more confirmations to wait for
Definition
Broadcasting more than one transaction that spends the same funds, so that one of them can later be invalidated and the coin effectively spent twice.
Digital data can be copied, so the hardest part of building money without an administrator was preventing the same balance from being spent twice. A blockchain fixes the order of transactions into a single shared history, which lets everyone treat a later conflicting transaction as invalid.
A freshly broadcast transaction, though, is not in any block yet. At that stage a competing transaction spending the same funds can still be included first. A merchant who releases goods on the strength of a 'sent' screen can end up with no payment at all.
The confirmation count tells you how many blocks have been added on top of the one containing your transaction. Each one raises the resource cost of replacing that history and lowers the chance of reversal. In practice: a few confirmations for small amounts, and the count your exchange publishes as the guide for large ones.
Watch out for
- · Never release goods or services on the strength of an unconfirmed transaction screen
- · Scale the number of confirmations you wait for with the size of the payment
- · Do not choose a thinly secured chain for large settlements just because it confirms quickly