Double spending means spending the same money twice. As we know, any transaction can be processed only in two ways. One is offline, and another is online.
Offline: A transaction which involves physical currency or cash is known as an offline transaction.
Online: A transaction which involves digital cash is known as an online transaction.
Let us consider this example:
You go to Restaurants and order a cappuccino worth $5. You pay in cash. The service provider at Restaurants instantly confirmed that you have paid, and you received your coffee in exchange for the money. Now is it possible to spend the same $5 somewhere else to make another purchase? The answer is NO. But what if the answer is YES? It means the same person can use the same cash more than one times. This type of problem is known as Double Spending Problem.

Page 1 Image 1 1 — Double Spending Problem.

In a physical currency, the double-spending problem can never arise. But in digital cash-like bitcoin, the double-spending problem can arise. Hence, bitcoin transactions have a possibility of being copied and rebroadcasted. It opens up the possibility that the same BTC could be spent twice by its owner.

How Bitcoin handles the Double Spending Problem?

Bitcoin handles the double-spending problem by implementing a confirmation mechanism and maintaining a universal ledger called blockchain.
Let us suppose you have 1 BTC and try to spend it twice. You made the 1 BTC transaction to Alice. Again, you sign and send the same 1 BTC transaction to Bob. Both transactions go into the pool of unconfirmed transactions where many unconfirmed transactions are stored already. The unconfirmed transactions are transactions which do not pick by anyone. Now, whichever transaction first got confirmations and was verified by miners, will be valid. Another transaction which could not get enough confirmations will be pulled out from the network. In this example, transaction T1 is valid, and Alice will receive the bitcoin.

Page 2 Image 2 1 — Double Spending Problem.

What happened if both the transactions are taken simultaneously by the miners?

Suppose two different miners will pick both transactions at the same time and start creating a block. Now, when the block is confirmed, both Alice and Bob will wait for confirmation on their transaction. Whichever transaction first got confirmations will be validated first, and another transaction will be pulled out from the network.
Now suppose if both Alice and Bob received the first confirmation at the same time, then there is a race will be started between Alice and Bob. So, whichever transaction gets the maximum number of confirmations from the network will be included in the blockchain, and the other one will be discarded.

Blockchain Bitcoin Cash

Page 3 Image 3 — Blockchain Bitcoin Cash

Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank, and do not require any trusted third parties to operate.
Bitcoin Cash is a cryptocurrency developed from a hard fork of the bitcoin network. It came in existence from the mid of 2017. Bitcoin Cash is different from Bitcoin. It is the upgraded version of the bitcoin core software. It is faster, cheaper and more reliable to use. It increases the block size of bitcoin from 1 MB to 8 MB and allowing for around two million transactions to be processed per day.

How Bitcoin Cash came in existence?

The Bitcoin blockchain is a constantly updated ledger, and all transactions that take place on the bitcoin network are listed there. In the bitcoin network, the first transaction block took place on January 2009, and each new blocks are added to this Bitcoin blockchain approximately every 10 minutes. The bitcoin protocol ensures that every single block which gets added to the blockchain is valid and conforms to the rules of bitcoin. Furthermore, each block that is added in the blockchain contains a cryptographic hash of the previous block.
On August 1st, 2017, at block number 478,558, there was a split. The ViaBTC pool produced a 1.9 MB block which is not valid on the legacy Bitcoin network because bitcoin has a 1 MB limit. This new block did not have the 1 MB limit, and instead, it included 1.9 MB. It causes a split which resulted in the creation of Bitcoin Cash. The computers that are mining Bitcoin Cash have a protocol that limits the block size at 8 MB rather than 1 MB.

What is a Bitcoin Hard Fork?

A fork takes place when a blockchain splits into two different paths forward. In the case of bitcoin hard fork, to make transaction speeds faster on the network, one group(miners) within the bitcoin community wanted to increase the size of blocks on the bitcoin blockchain. As a result, the bitcoin blockchain may split into two different versions, resulting in two different chains with a separate coin in each one which gives birth of Bitcoin Cash.
As you can see in this diagram, there is a split that takes place on the network and essentially creates a new Blockchain with altered rules. The original and the forked version of the cryptocurrency had identical blockchains up to the block when the split occurred. After the split happened, everyone who held bitcoins before the hard fork, received the same amount of Bitcoin Cash tokens.

What differs Bitcoin Cash from other Cryptocurrencies?

1. Bitcoin Cash is based on the Bitcoin original source code with the difference of bigger blocks (8MB) size.
2. In contrast to Bitcoin, bitcoin cash does not focus on becoming a store of value. Instead, its main aims are to be used for digital payments only.
So, this brings us to the end of blog. This Tecklearn ‘Concept of BlockChain Double Spending and Bitcoin Cash’ blog helps you with commonly asked questions if you are looking out for a job in BlockChain or Ethereum. If you wish to learn BlockChain or Ethereum and build a career in BlockChain domain, then check out our interactive, Blockchain and Ethereum Developer Training, that comes with 24*7 support to guide you throughout your learning period. Please find the link for course details:
https://www.tecklearn.com/course/blockchain-and-ethereum-certification-training/

Blockchain and Ethereum Developer Training

About the Course

Tecklearn’s Blockchain and Ethereum Certification Training course in the blockchain technology that covers essential concepts like Blockchain programming, Ethereum, Solidity, Digital ledger types, Smart Contracts, Multichain, Bitcoin mining, Cryptocurrency, etc. The course provides an overview of the structure and mechanism of Blockchain. You will learn about the Ethereum ecosystem, how smart contracts are developed using Solidity and how to deploy a business network using Hyperledger Compose.

Why Should you take BlockChain and Ethereum Certification Training?

• The average salary of a Blockchain Ethereum Developer is $158,860 per annum – Paysa.com.
• Blockchain tech has gone far beyond its beginnings in banking and cryptocurrency: In 2019, businesses are expected to spend $2.9B on the technology.
• IBM reports that Blockchain markets are headed to $60 Billion worldwide by 2024.

What you will Learn in this Course?

Introduction and origin of Blockchain

• How does our current financial system work?
• What can be the possible solution
• What is a distributed system
• What is Blockchain
• How does a Blockchain work
• Components of Blockchain
• Business network
• Consensus, Provenances, immutability and finality

Cryptocurrency and Blockchain

• Distributed system
• Distributed Ledger technology
• Global Payments
• Why BlockChain
• BlockChain and use case needs
• Requirements of blockchain for business
• BlockChain benefits
• Types of BlockChain
• Hands on

Bitcoin Platform

• What is Bitcoin?
• Why use Bitcoins?
• Bitcoin Ecosystem
• Structure of a Bitcoin Transaction
• Merkel Trees
• Scripting language in Bitcoin
• Applications of Bitcoin script
• Nodes in a Bitcoin Network
• Bitcoin Economics
• What is Bitcoin Mining?
• Types of Mining
• Mining and Consensus
• Hands On

Introduction to Ethereum

• What is Ethereum?
• Ethereum Layers
• Introducing Smart Contracts
• Cryptocurrency in Ethereum
• Mining in Ethereum
• Consensus Mechanism
• Platform Functions in Ethereum
• Technologies that support Ethereum
• Ethereum Programming Language
• Components for the development of Ethereum DApps
• Editors and tools
• Frontend Development
• Ethereum Test Networks
• ERC Tokens
• Hands On

Solidity

• Introducing Solidity
• Sample Code, Layout of Source File
• Structure of a Contract
• State Variables, Functions Types, Reference Types
• Special Variables and Functions, Expressions and Control Structures
• Function Calls, Error Handling
• Visibility for Functions and State Variables
• Inheritance, Constructors
• Importing Smart Contracts
• Gas Limit and Loops
• Sending and Receiving Ether
• Recommendations
• Contract ABI
• Setting up the development environment and Deploying DApp
• Hands On

Hyperledger

• Introduction to Hyperledger
• Hyperledger architecture
• Hyperledger Fabric V1 Architecture
• Consensus
• Hyperledger API
• Hyperledger Application Model
• Hyperledger project and tools
• Network Topology
• Exploring Hyperledger frameworks
• Business Network Deployment on Hyperledger Composer Playground
• Sample Transaction
• Service invoices
• Hands On

Hyperledger Composer

• Development Environment using Composer
• Developing business networks
• Testing business networks
• Introduction to Hyperledger Fabric
• Hyperledger Fabric Model
• Ways to create Hyperledger Fabric Blockchain Network
• Hands On

Create and Deploy Your Private Blockchain On Multichain

• What Is MultiChain
• MultiChain Privacy and Permissions
• Mining in MultiChain
• Multiple configurable Blockchains using MultiChain
• Setting up a Private Blockchain
• Hands On

Blockchain Use Cases

• Potential use cases in Blockchain
• BlockChain project

Got a question for us? Please mention it in the comments section and we will get back to you.

479