Double Spending

The Double-Spending problem is the potential for a digital currency to be spent twice. Double spending is an issue associated with digital currencies because of the fact that data associated with currencies can be reproduced using the appropriate tools. Thieves and hackers can do this by sending multiple packets related to a transaction to the network but then reversing those transactions with the intention of making it appear that they never occurred.

Bitcoin (BTC), however, is considered to have solved the double-spending problem through blockchain technology because all transactions need to be verified and recorded on the blockchain. This record is immutable because every new block mined has to contain references to previous blocks. This blockchain is then distributed across many thousands of computers and locations. In order to make a single change to the ledger, hackers need to have an enormous computing power that is considered impossible to do so.