What is Double Spending in Crypto Transactions?

Deposit.redaksinet.com – Speaking of digital currencies, we should immediately focus on Bitcoin and its friends. So far, we know Cryptocurrency as a digital currency transaction with a fairly high level of security.

However, the security offered still has loopholes for hackers to enter. Therefore, Cryptocurrency is still inseparable from the name of theft, hacking and such actions.

When transacting with Cryptocurrencies, we are actually supported by technology that prevents cyber theft. Unfortunately, there are some people who can find the flaws of cryptography and do double spending.

Surely you are wondering about double spending crypto, right? How could he do so much damage?

Double Expenses

Literally, double spending is defined as double spending. But technically, double spending is a system where crypto transactions on the blockchain are duplicated or faked.

To perform crypto transactions, we need a token that is only used once. Well, in this double spending, Tokens will be duplicated or counterfeited by irresponsible parties.

Crypto transactions are closely related to nodes that need to process receipts and confirmations in each transaction. Every transaction takes time. It is in this time-consuming process that double costs tend to occur. Therefore, we need to be careful if someone copies and rebroadcasts transactions before they are confirmed to the network.

When you make a crypto transaction that has not been 100% successful or confirmed, there is a process that takes about 10 minutes. This time lag is usually used by crypto thieves to double tokens and spend the same amount twice.

There are two ways of Double Spending, namely:

  • Copy coins and send them to others while keeping the original;
  • Send the same coin to two different people at the same time.

Double withdrawal type in Crypto

To find out more about double-spending crypto, here we present the types by type of attack. There are three types of double spending, namely:

Race Attack

In Race Attack, a hacker sends two transactions consecutively and only one is later confirmed on the blockchain. The goal is to buy something with an unconfirmed transaction, then cancel it before it is confirmed.

The above events are only possible if the merchant accepts unconfirmed transactions. To reduce this risk, traders can take precautions by disabling incoming connections and only connecting to good/trusted nodes.

However, this method is not 100% effective. Therefore, what must be ensured is to be careful when accepting unconfirmed payments.

Finney’s Attack

This second type of attack involves quite shrewd crypto miners. This attack is carried out by pre-mining transactions into blocks from one wallet to another.

The perpetrator will use the first wallet to make the second transaction and broadcast the pre-mined block that includes the first transaction in it. Just like a race attack, this attack can occur if the victim receives an unconfirmed transaction.

51% attacks

The 51% attack is also referred to as the majority attack and is a major concern of the Bitcoin system as it can be fatal. In this attack, the attacker has more than half of the computing resources of the P2P network. Judging by the required capacity, the attacker can consist of a set of miners with a large accumulation of computing power.

The 51% attack puts the attacker ahead of the POW competition given the superiority of computing resources, so that it can reverse each block of transactions. So, these rogue miners can control and control more than 50 percent of the network hash mining rate.

No kidding, these irresponsible miners can also stop payment delays, reverse completed transactions, and double spend.

Tips to Avoid Double Spending

In fact, the tips for avoiding double spending crypto are very simple, namely not accepting or forwarding transactions that have not been confirmed by the blockchain. As long as you don’t accept it, chances are there won’t be a double charge. In addition, many exchanges have labeled unconfirmed transactions as ‘unconfirmed’.

Apart from that, you also need to know that the longer it takes to confirm, the more secure the transaction will be. The recommended waiting time depends on the amount sent and what blockchain is used.

For payment of bitcoin transactions under $1,000 for example, so far it is still quite safe with standard confirmations. Meanwhile, payments up to $10,000 usually require three confirmations. For very large transactions, many recommend making six confirmations.

Within the Bitcoin network itself, confirmations occur for each block approximately once every 10 minutes. Some blockchain networks have different block confirmation times; some are much shorter than Bitcoin, from seconds to minutes.

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