On August 6, 2022, he participated in a conference where he explained how bitcoin is a technological gem. On this occasion, it returns to bitcoin’s ability to not replicate itself. In the digital space, this specificity, he believes, has enormous value. Architecture in this sense is a computing tool that can be the engine of start-ups. To avoid being duplicated, the Bitcoin network has solved the well-known problem of double spending.
Double Spending: What is it?
Double spending is the computing problem that Bitcoin solves. This ability is the source of bitcoin’s value. Without this criterion, anyone could replicate a transaction in which a single unit was spent. In the same way as a fiduciary currency whose ticket is unique, Bitcoin had to specify each unit.
Therefore, double spending can be defined as the fact that the same unit of fiat or crypto currency can be spent twice. This would result in a loss of confidence in the currency. However, trust is the cement of any monetary system. To avoid double spending, cryptocurrencies use a blockchain that combines a public ledger with cryptographic algorithms. Concretely, a blockchain is an unfenced database archiving all the transactions made within the network. For this reason, the risk of double spending can be analyzed as a systemic risk.
Double spending: A solution through decentralization
In a decentralized system, it is more complicated to ensure that the funds are not spent twice because there is no supervisor. Equally powerful participants must coordinate a set of rules that prevent fraud and encourage all users to act honestly. This problem was solved with the amazing innovation of bitcoin. Attached is the white paper where the algorithmic solution is presented with the data structure now known as blockchain.
The blockchain is publicly available. As a result, it is easy to identify and then block fraudulent activities. These activities include transactions that attempt to double spending.
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Sami AYADI
As for the angels of intervention in the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.
