Solutions to prevent Double-Spending of Bitcoins
Double-spending is the outcome of spending some money more than once. Bitcoin users secured themselves from double-spending cheating by waiting for verification when receiving payments on the blockchain. There is a possibility that a digital currency can be spent twice. Transactions in bitcoin is a digital file. It is possible to duplicate transactions and spend the same Bitcoin twice.
There is a weakness in double-currency that it faces the issue of copying and pasting.
Here are some examples of how you can double-spend a digital currency:
- Copy a coin and send it to another person while still keeping back the original one.
- Send the same coin to two different people at the same time.
- Alter a transaction that has been already been made while keeping the goods and the money.
The double-spend problem is a serious issue for any digital currency since it can boost up the money which spoils the value of the currency.
1. Centralized Solution:
The centralized solution is quite easy to spent double-spending. It includes a central administration that keeps data of each person’s balance in the system. The administration permits the transaction and the money is transferred. Every single bank in the world operates on centralized servers. This administration has access to all the individual person’s banking acts and has every information related to one’s bank account. Suppose, if someone got your internet banking password or hack the bank’s centralized servers, then the administration has access to all of this information.
If the centralized servers failed, then your access would be denied. A decentralized payment system solves all of these issues. When you are using a cryptocurrency to send or receive money, you don’t need to depend on a third party to confirm the transaction. There is no requirement for a third party. This makes cryptocurrencies perfect for sending or receiving a payment from someone in a different country.
2. Decentralized Solution:
In decentralized currency, there is no central administration for approving transactions. Bitcoin uses a mix of elements to solve the double-spend problem. Decentralized systems are having no boundary. It makes no difference if you are sending someone money to somebody in your hometown, or someone on the other side of the world. Your funds are much more secure when using a decentralized system. The only person that has access to your money is you.