Double Spending

An attempt to spend the same transaction output twice. There are two major ways to perform a double spend: (1) reverting an unconfirmed transaction by making another one which has a higher chance of being included in a block. This only works with merchants accepting zero-confirmation transactions, or (2) by mining a parallel blockchain with a second transaction to overtake the chain where the first transaction was included. The Bitcoin proof-of-work scheme, virtually guarantees the prevention of double spend transactions recorded in the blockchain. The deeper the transaction is recorded in the blockchain , the more expensive it is to “reverse” it. If someone tries to spend the same bitcoins at two different places at the same time, one transaction would be recorded in a block and confirmed and the other would be considered non-valid and thereby deprive the intended recipient the bitcoins. As the transaction gains in confirmations, the risk of a double spend decreases. Although possible, double spends would not be worth the effort in small transactions and those conducting large transactions would certainly be willing to wait for 1-6 confirmations. Double spending is not easy to do, but it is nevertheless a risk run by those choosing to accept zero-confirmation transactions. Bitcoin mining and the blockchain are there to create a consensus on the network about which of the two transactions will confirm and be considered valid. See also 51% attack .

Reference:

Malone, J.A (2015). Glossary of Bitcoin Terms and Definitions. United States: Lulu Press, Inc

A deliberate blockchain fork, where a user with a large amount of mining power sends a transaction to purchase some produce, then after receiving the product creates another transaction sending the same coins to themselves. The attacker then creates a block, at the same level as the block containing the original transaction but containing the second transaction instead, and starts mining on the fork. If the attacker has more than 50% of all mining power, the double spend is guaranteed to succeed eventually at any block depth. Below 50%, there is some probability of success, but it is usually only substantial at a depth up to about 2-5; for this reason, most cryptocurrency exchanges, gambling sites and financial services wait until six blocks have been produced (“six confirmations”) before accepting a payment.

Reference:

http://ethdocs.org/en/latest/glossary.html

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