Just imagine that Ken has 0.1BTC and wants to buy a pair of Nike sneakers from a store online that accepted Bitcoin.

The sneakers cost 0.001BTC. Ken agrees to buy it. He proceeds to pay for the shoes but with a plan to not pay he creates a duplicate of the transaction as though it’s real so that he can get the shoes fast.

The sales rep on the other side without much knowledge about the crypto world gets a screenshot of the transaction from Ken and instantly tells their rep to send the shoes to Ken who happened to be at the beach to make sure his plans work out well.

And when he gets the shoe, he’s on his way home and nowhere. Whereas the sales rep calls the representative to hold on because the transaction was false.

No Bitcoin was transferred. The transaction was not confirmed. Ken is a double spender.

In simple terms, “double spending is the risk that a digital currency can be spent twice,” says Jake Frankenfield.

Types of Double Spending

  • Race Attack

In a race attack, the hacker creates two transactions in quick succession but one is later confirmed on the blockchain.

The aim is to buy the Nike with the unconfirmed transaction and then invalidate it before it’s confirmed.

Race attack only happens when the “sales rep” or recipient says yes to an unconfirmed transaction.

Ken used this for his Nike sneakers.

  • Finney Attack

Let’s say a miner pre-mines a transaction into a block from wallet A to wallet B. Then, uses wallet A to make a second transaction and broadcast the pre-mined block, which includes the first transaction.

For it work, a very good specific sequence to work is needed and the recipent too will accept an unconfirmed transaction.

  • 51% Attack

When a miner or group of miners have more than 50% control of the hashing power of the network, then this attack happens.

So, you see a double spending procedure being initiated immediately.

However, the hash rate in the Bitcoin protocol is making it near impossible compared with other Blockchain platforms with lower hash rate.

If this is possible, how safe are our cryptocurrencies?

One of the greatest defect of double spending is inflation.

And that means with time, that particular currency will be devalued.

So, how can this be controlled or are there systems in place to check this?

  • Centralised third party system

This is an option to be explored but it’ll take us back to traditional financial system.

Thereby removing the Hallmark of cryptography – decentralized system. And other cost implications too will be atta he’d if we use this route.

  • Waiting time

You can use your waiting time and number of confirmations to mitigate double spending. Remember, double spending can only occur when you accept a transaction that has not been confirmed.

According to gemini.com, the recommended wait time depends on the amount sent and what blockchain you’re using.

For Bitcoin payments of less than $1,000, one confirmation is widely considered safe.

For payments up to $10,000, three confirmations is standard practice. Many recommend six confirmations for very large transactions.

On the Bitcoin network, confirmations happen for every block approximately once every 10 minutes.

Some blockchain networks have much shorter block confirmation times, ranging from seconds to a few minutes.

  • Secure your wallet properly

It’s known that majority of the double spending that happens within the Blockchain space is as a result of insecure wallets.

So, make sure your wallet is secured and your password is not released to anyone for any reason.

  • Use of a consensus algorithm.

Examples of such algorithms include the proof-of-stake and the proof-of-work consensus mechanisms.

  • The use of blind signature and secret splitting checks double spending activities.

These algorithm makes it even more difficult for the double spending procedure to occur.

While this phenomenon might be seen along the progression of cryptography, there will definitely be more strategies that’ll be used to reduce it otherwise the idea behind cryptocurrency will crush before us.