Double-spending is the risk that a digital currency can be spent twice. It is a potential problem unique to digital currencies because digital information can be reproduced relatively easily by savvy individuals who understand the blockchain network and the computing power necessary to manipulate it.Physical currencies Fiat money is a government-issued currency that is not backed by a physical commodity but rather by the government that issued it.Learn more do not have this issue because they cannot be easily replicated, and the parties involved in a transaction can immediately verify the authenticity and past ownership of the physical currency. Bitcoin Bitcoin is a decentralized digital currency that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.Learn more has a mechanism based on transaction logs, known as the blockchain A blockchain is a digital ledger of transactions that works from a decentralized network.Learn more, to verify the authenticity of each transaction and prevent double-counting. Bitcoin requires that all transactions, without exception, be included in the blockchain. This mechanism ensures that the party spending the bitcoins really owns them and also prevents double-counting and other fraud.
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