What is money? If I will ask what money is? What would be the answer in just a single word? Well, the answer is Payment, Right? Money is the power of exchanging that we can exchange it for goods because there are different values of different products in different countries. But what about the blockchain and bitcoin value?
It is open to the world, which means anyone can see the value; it is decentralized and controlled by one person. Can we spend the same money twice? No, but if I will say yes? Yes, this is right; in digital currency, there could be an issue called double-spending, and in this article, we will talk about the double-spending system in blockchain and how it can solve. So without wasting time, let’s understand double-spending first.
Double Spending
Double spending means spending the money or cryptocurrency twice. In simple words, if you send the money to one person digitally at the moment, it is not verified, which means you can send that money to another person because it is not verified. This is the biggest problem faced by bitcoin and blockchain payment systems in the initial stage.
Double Spending in Offline and Online Payment Method:
Let’s understand the double-spending limit concept clearly with an example and before starting, let’s see the two main important payment systems. There are the following two payment systems given below:
- Offline payment
- Online payment
Offline Payment:
Is there double-spending happen in offline payment. Well, the answer is never. Understand it through an example. When you would go to the shop and ask for a product, what would be your next step? To make payment? Yes, you would pay, and they would give you a product, that’s it. But can you spend the same money twice to purchase the same or other product from the shop, the answer is never.
In offline mode, you cannot spend money twice because the seller or receiver would verify your payment; after the verification, you would have no choice to spend that money twice because you already gave it to the seller. So the offline payment method is the safest in terms of double-spending. There would never be a chance for double-spending.
Online Payment:
Online payment is also the safest and efficient way to transfer money from one person to another person by using the internet all over the world. However, if something has benefits, it has also had limitations. The biggest problem that arises with online payment is double-spending.
There are more chances of a double-spending system in the blockchain because there is late verification of transactions on the blockchain. Blockchain is the platform where are bitcoin transactions got verified and broadcasted. In the offline payment method, the payment got verified at the moment of purchase or sending.
Still, in the case of bitcoin payment, it takes time because miners have to solve the difficult equations, and without solving these equations, transactions may not be verified. It takes time to solve the mathematical equations to verify transactions, and until the transaction is verified, the sender of the bitcoin can send the bitcoin to another person.
How Bitcoin Solved Double Spending Issue?
The first thing we need to understand is about the blockchain and miners. How blockchain works and how miners help to validate the transactions. When one person who has a bitcoin spends his bitcoin or sends a bitcoin to another person, the receiving the bitcoin to another person, the transaction is validated by the miners.
These miners solve the complex mathematical equation to validate the transaction and after successful validation, they validate more and more transactions. By making and adding new transactions into the block, the block (it is a pool of validated transactions verified by the miners) is then broadcasted to the blockchain network, which means the transactions got verified. Go with the official trading platform like quantum ai to make secure trading.
For example:- Suppose there are three people, Mr.A, Mr.B, and Mr.C. Mr.A has a bitcoin, and he transfers his bitcoin to Mr.B; now Mr.B does not receive the bitcoin at the moment. The transaction is under process.
Now Mr.A thinks that the transaction is not verified; I can send this bitcoin to Mr.C, he sends his bitcoin to Mr.C, and now again, the transaction is under process. On the blockchain side, miners are validating the transactions, and bitcoin would be received by the person whose transaction would get first verified. Only one transaction can get verified, and there is now no issue of double-spending.
