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How proof-of-work prevents double spending

Blockchain makes use of the utility consensus mechanism known as proof-of-work to ensure every transaction carried out on the platform is verified simultaneously, blocking out the possibility of double-spending.

How proof-of-work prevents double spending

With the help of proof-of-work, all participating nodes are involved in the verification process; this is to help avoid double-spending. With this, no single node has enough power to manipulate the system. Before we go further, what is double-spending?

Just like the name implies, it is a situation where a single digital currency is spent multiple times unchecked. This problem arises when multiple transactions share a single input broadcasted on the same network. Double spending is a problem associated with digital currencies only. This is probably because digital currencies can easily reproduce verification of property rights and transfer.

Blockchain was introduced in 2008 as a public ledger. Blockchain was the first workable solution against double-spending; it is the first time a financial structure offered property rights and transfer.

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In blockchain, double-spending is almost impossible (note the use of the word almost). Before a user can fraudulently double-spend, the node needs to be backed by high-level computing power to clear the previous blocks then make a double-spend transaction within the chain.

Still, on paper, blockchain is vulnerable to double spending if, for example, a node manages to control up to 51% of the network (which is not feasible in an operational public ecosystem). Only then can the node be allowed to double spend.

If the node can control 51% of the network for some reason, it will have enough computational power to create a private chain and reverse transactions.

Just like I said, this can only happen on paper, so, in reality, double-spending on the blockchain is impossible because over time, the block exponentially grows, thereby protecting transactions.

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In practical terms, if you have 1 BTC and you send it twice as two different transactions to two separate bitcoin wallet addresses, they will be transferred to the pool pending confirmation. Verification will first be carried out on the first transaction, and it would be verified through proof-of-work. On the other hand, the second transaction would be flagged as invalid since it doesn’t meet the proof-of-work verification requirement.

However, if both transactions are simultaneously pulled for confirmation, as is the case when two users on bitcoin-code.io enter into a transaction, only the transaction with more confirmation would be allowed into the new block, the other transaction would be discarded.

Overall the process of verifying transactions is what makes double-spending on blockchain difficult. However, it has its downsides; for example, a receipt for the second transaction will not be generated, so the supposed receiver of the second transaction will not receive the bitcoin and yet no receipt to explain why the receiver has not received it.

“Proof-of-work has the nice property that it can be relayed through untrusted middlemen. We don’t have to worry about a chain of custody of communication. It doesn’t matter who tells you a longest chain; the proof-of-work speaks for itself.”

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— Satoshi Nakamoto

Proof-of-work is a feature blockchain adopted to combat the double-spending problem; with POW in place, double-spending is almost impossible. Satoshi Nakamoto saw the need to solve the age-long problem and implemented POW in almost all bitcoin processes like hashing, timestamping, and mining. PoW has proven to be successful; for over twelve years since its implementation, there has not been a recorded case of double spending in blockchain.

The combination of all these processes proved to be successful while maintaining a distributed, decentralized, and public ecosystem. After POW, every other new consensus, like the Proof of Stake, maintained the structure that blocks out double-spending.

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