Crypto Academy Week 5 Homework Post for @gbenga on All About Blockchain Security by me @hadassah26.

Good day beautiful Steemians, today I will be writing about Double Spending as a security problem with Cryptocurrency as a requirement for the completion of Week 5 Homework by my professor @gbenga on All About Blockchain Security.

What is Double Spending:

"At the core of the economic logic of cryptocurrencies lies the problem of surmounting the double-spending problem, which poses an accounting and accountability challenge that effective cryptocurrencies have sought to overcome"
-Usman W. Chohan

Double-spending is a potential flaw in a digital cash scheme in which the same single digital token can be spent more than once. Unlike physical cash, a digital token consists of a digital file that can be duplicated or falsified. source

source

This which recently was major news on the bitcoin blockchain of recent.
I will be addressing discuss double spending as regards bitcoin.

Bitcoin being a Proof-of-Work (PoW) based currency that allows users to “mine” for digital coins by performing computations, users are therefore regarded to execute payments by digitally signing their transactions preventing them from double-spending their coins (i.e., signing-over the same coin to two different users) through a distributed time-stamping service source

So why does this flaw which seems to have been managed still exist?:

The thing is nowadays, Bitcoin is increasingly used in a number of “fast payment” scenarios, where the exchange time between the currency and goods is short. Examples include online services, ATM withdrawals, vending machine payments and fast-food payments, where the payment is followed by fast (< 30 seconds) delivery of goods. source

Karame et al.(2015) analyzed the conditions by performing successful double-spending attacks against fast payments in Bitcoin, where the time between the exchange of currency and goods were short, arguing that “unless new detection techniques are integrated in the Bitcoin implementation, double-spending attacks on fast payments will succeed with considerable probability and can be mounted at low cost.”source

Now How is Double Spending a Threat to Bitcoin?:

“Bitcoin falls 11% after report suggests a critical flaw in the cryptocurrency called 'double spend' may have occurred”
-MATTHEW FOX

On Jan. 20, at Bitcoin block height 666833, mining pools F2Pool and SlushPool both mined a BTC block simultaneously. The Bitcoin blockchain adds blocks one-by-one. Thus, only of them was eventually added to the major chain.

For ten minutes, nevertheless, transactions in both blocks showed confirmation.

A transaction from one set of addresses showed in both blocks with outputs of 0.00062063 and 0.00014499 BTC (total 0.00076562 BTC). The sending addresses had a total of 0.00071095 BTC only.

Hence, the input address received more Bitcoin than the sender held in the wallets.
source
This which made millions of users doubt the sustainability of bitcoin and caused a major drop on the price.

The 51% Attack:

The total computational power of a decentralized proof-of-work system is the sum of the computational power of the nodes, which can differ significantly due to the hardware used. Larger computational power increases the chance to win the mining reward for each new block mined, which creates an incentive to accumulate clusters of mining nodes, or mining pools. Any pool that achieves 51% hashing power can effectively overturn network transactions, resulting in double spending. . source

Attackers use 51% attacks to reverse transactions that have already taken place, in a blockchain, in what has come to be known as double spend. For instance, one can spend 5 bitcoins to purchase a motorcycle. Once the bike is delivered, logic dictates that Bitcoins are to be transferred to cater for the cost of the bike and can activate the attack.
However, on performing a 51% attack, an attacker would be able to reverse a transaction resulting in all coins used to fund the transaction being refunded. In the end, the attacker will be the owner of the motorcycle as well as the bitcoins used to buy it.source

In 2014, mining pool Ghash.io obtained 51% hashing power in Bitcoin which raised significant controversies about the safety of the network. The pool has voluntarily capped their hashing power at 39.99% and requested other pools to follow in order to restore trust in the network.
source

Conclusion:
With double spending being a threat to the security and more viability to bitcoin and other cryptocurrencies, it is best to find a quick and sustainable solution to this problem where

“new and lightweight countermeasure that enables the detection of double-spending attacks in fast transactions, would be possible and achievable”
-Karame et al.

Thank you.

CC:@gbenga
@steemcurator01
@steemcurator02