A double spend is where two different transactions sent into the Bitcoin network are trying to spend the same account balance. Bitcoin naturally defends against this by confirming which the transaction which is included in a block first.
If two transactions are sent into the network using the same private key and the same funds but sent to different bitcoin addresses – then as the transaction propagates through the network one half of the network will accept one transaction and the other half, another.
The situation is resolved by which side of the network resolves one of the two transactions into a block first.
So if you try and spend your bitcoins twice – once to a merchant and once back to another address under your control, then you will have a 50% chance roughly of regaining your money and getting the product for free if chance favours your address as being the bitcoin networks consensus .
This does depend though on which transaction gets propagated further into the network. For example if transaction A reaches ten mining nodes controlling 80% of the network hashing power first and the other transaction only reaches 20%, then transaction A will have an 80% chance of being included in the next block and be the confirmed transaction.
There are ways of safeguarding against this – whereby wallet operators keep strong links into mining nodes to propagate their transactions fed directly in – so another transaction spending the same output can’t be fed into the network on a fraudulent basis.
- What are Bitcoin Perpetual Swaps and How to Trade Them
- How to Securely Trade Cryptocurrencies Without Creating an Account
- Bitcoin Mining in the Future: How Profitable Will It Be?
- How One Player Won 1.79 BTC from a Blockchain Casino, and Why Dapps Can’t Compete
- How Cryptocurrencies and Blockchain Are Powering Artisanal Small Gold Miners
- How to Copy Trade Cryptocurrencies - eToro Guide
- Ceek VR: The Future Of Digital Content
- Crypto Trading and the Costs Incurred: What’s the Best Way to Buy and Sell?
- How Many Cryptocurrencies Are There? - in Depth Guide
- AdEx Review: Using Blockchain to Fix Online Advertising
This website is only provided for your general information and is not intended to be relied upon by you in making any investment decisions. You should always combine multiple sources of information and analysis before making an investment and seek independent expert financial advice.
Where we list or describe different products and services, we try to give you the information you need to help you compare them and choose the right product or service for you. We may also have tips and more information to help you compare providers.
Some providers pay us for advertisements or promotions on our website or in emails we may send you. Any commercial agreement we have in place with a provider does not affect how we describe them or their products and services. Sponsored companies are clearly labelled.