The bitcoin original has the "double spending problem." But in a transaction using standard currency (dollar), the double spending problem is not a problem. Why is this a problem in crypocurrency?


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With physical dollars, double spending is not an issue. You either physically possess the dollar or you don't. Once you give the dollar to someone else, it can't magically reappear in your wallet.

Non-physical dollars, such as a bank account, solve this problem by centralized trust. Your bank is trusted to decrease the value in your account when you transfer money from it, and increase the value when you transfer money to it. These transactions are audited against the records of the institutions the bank interacts with (other banks and financial institutions), which helps ensure the accuracy, but at the end of the day it is trust in your bank that prevents double spending.

Cryptocurrencies are digital, and digital assets can be copied perfectly. This had always been a problem for creating a digital currency. Let's pretend that a certain image was used as a digital currency. What prevents you from copying this image millions of times, and double spending it? This is the problem Bitcoin solves by using a blockchain. It is able to verify that a digital asset is only transferred once, and do so without a centralized authority like a bank. Without trusting anyone in particular, you can be sure that a payment you received was not (and never will be) received by someone else as well. Just like being handed a physical dollar.

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