Double-spending
Double-spending is a failure mode of digital cash schemes, when it is possible to spend a single digital token twice. Since, unlike physical token money such as coins, electronic files can be duplicated, and hence the act of spending a digital coin does not remove its data from the ownership of the original holder,[1] some other means are needed to prevent double-spending.
Trusted third party
This is usually implemented using an on-line central trusted third party that can verify whether a token has been spent.[1] This normally represents a single point of failure from both the technical and trust viewpoints.
Decentralisation
By 2007, a number of distributed systems for double-spending prevention had been proposed.[2]:{{{3}}}[3]:{{{3}}}
The cryptocurrency Bitcoin implemented a solution in early 2009. It uses a scheme called proof-of-work, to avoid the need for a trusted third party to timestamp transactions. These timestamps are recorded in its public ledger called the block chain. This avoids anyone double-spending the currency.[4]:{{{3}}}
See also
References
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