Double-spending reports continue to plague crypto-currency companies and investors alike. Will this issue ever be resolved, or is it here to stay?
Double-spending is a problem that has existed since the inception of Bitcoin (BTC), and according to a recent ZenGo report, it still persists in the portfolios of crypto-currencies such as BRD, Ledger Live and Edge.
Although these companies have updated their product offerings since ZenGo pointed out this discrepancy, there is speculation that millions of cryptomone users may have been exposed to this particular feat, called BigSpender. Ledger, one of the affected crypto coin wallet companies, even claimed that this vulnerability is just a flaw in the user experience.
Kraken discovered possible attacks against Ledger wallets, user funds were not affected
What is double spending?
Double-spending is a defect that arises on digital money platforms where a single digital token can be spent more than once. Although this is not an exclusive weakness of Blockchain technology and crypto-currencies, it becomes a very important problem for crypto-currency users. With centralized currencies, this problem is solved by having a trusted third party verify whether the currency has already been spent.
With decentralized currencies such as Bitcoin, a unique key point is that they offer a system that is not linked to any central bank, with the problem of double spending being addressed by having many servers store updated copies of the public transaction book.
The obstacle to this approach is that, once issued, transactions will reach each server at slightly different times, and if two transactions attempt to spend the same amount, each server will consider the first one valid and override the second. If these two servers do not agree, there is no way to reconcile the true balance, as each server’s observation is considered valid. Cointelegraph discussed the issue with Bilal Hammoud, founder and CEO of NDAX – a Canadian-based crypto currency exchange – who said that despite the recurring problems, Bitcoin has a prevention system:
„The Bitcoin Network used multiple measures to prevent such attacks, such as the time to produce a block that lasts an average of 10 minutes and the confirmation recommendation of 6, which makes it almost impossible to reverse a transaction unless the attacker has significant network power.