What Is Double Spending?

Double spending can be defined as an activity when an individual transacts more money than the required amount. Most currencies online face this issue. Traditional currencies keep check on such problems by paying real cash or acquiring the help of reputed third-party organizations like banks, credit card services, PayPal, etc., which all transact the amount and record the changes in the account balances based on the transactions.

However, Bitcoin functions in an open digital world, where third-party organizations do not

influence or monitor it. Its philosophy counters the traditional approach we witness in the

financial world. Thus, if I say to you that I have 20 Bitcoins with me, how will you come to

know that I am not lying about it?

Thus, to keep everything in check, a public ledger was fabricated that records all the transactions. This public ledger is referred to as Block Chain. I will discuss it in detail in later. This public ledger lets you trace all the Bitcoin transactions right from the very first time they were recorded.

But Bitcoin is a digital currency, and is not monitored by any intermediaries. This technology’s philosophy counters the monitoring activities practiced by third party enterprises. So, if you say that you own 25 Bitcoins, how will I trust that you are being honest or not? The solution is that public ledger with records of all transactions, known as the blockchain. (We will learn about it

later.) There is no way you can lie about the number of coins in your possession, when this

technology fabricates a way to trace every transaction right from the start.

Thus, for every Bitcoin transaction, miners go through the ledger and check for malicious

practices of double spending. If everything is found perfect, the transaction is validated and recorded in the public ledger. It sounds simple, but it is not.