Why Does Double Spending Occur in Blockchain (Why Did Blockchain Suddenly Become Popular)

Why does double spending occur in blockchain? After the transaction records in the blockchain are confirmed, two irreversible transactions are produced.

Firstly, Bitcoin was the first cryptocurrency to experience this situation. However, due to different consensus mechanisms (different block rewards), a phenomenon occurs: a transaction includes a small part of the transaction. When processing this transaction on the Bitcoin network, there is a vulnerability where miners use computational resources to obtain block space in the block and pack it into a new data structure. If there is not enough network capacity, nodes that cannot effectively verify these block information will be vulnerable to attacks. When the block height on the Bitcoin chain exceeds a certain time, double spending occurs. What is a 51% attack? This problem can be explained in two aspects:

First, a single participant controls multiple blocks but also has more blocks. Because they have the same information, the entire network loses funds. Second, each node initiates two hash power battles using different algorithms for the same transaction.

Third, obtaining the same message and signature from another person, allowing the second party to successfully obtain the same batch of private keys from the first party.

In fact, these two founders have already realized this risk, so they started trying different methods to solve this problem.

To solve this problem, the blockchain development team designed a new model: adding transaction records in the Bitcoin blockchain to a new repository. According to the definition, it consists of three layers: mining pool, miners, and other service providers; users, validators, and the final target.

The mining pool refers to the entity that sends a specific amount of tokens to the exchange or sells them at a specific price. In other words, only customers who have been specially reviewed and approved can perform operations within the system and will not incur any fees for transactions. In addition, since the transaction data is publicly transparent and cannot be changed or tampered with. In addition, some applications are using distributed ledger technology to improve transaction speed, such as Bitcoin Cash and Ethereum.org.

For ordinary investors, the price volatility of Bitcoin is too high, making it difficult to understand how to achieve payment methods like Bitcoin Cash, and the value of many digital assets may also fluctuate significantly due to the characteristics of Bitcoin itself. Bitcoin Cash is a peer-to-peer (P2P) electronic cash system used to transfer virtual goods such as BTC. Although Bitcoin’s native supporters believe that Bitcoin is a better choice than the traditional banking system, it has its flaws in theory. Although there is currently no difference between Bitcoin Cash and fiat currency, Bitcoin Cash is indeed an attractive alternative.

Why Did Blockchain Suddenly Become Popular

According to the Securities Daily, on January 8th of this year, the “China Blockchain Application Research Center” (referred to as the “Chain Center”) was officially established in Shenzhen. This research was initiated by the Tsinghua University Institute of Technology Innovation and the Shanghai Branch of the Institute of Computing, Chinese Academy of Sciences. It aims to provide intellectual support for the development of China’s blockchain industry by combining cutting-edge theories and practical methods in the field of digital economy. At the same time, it also explores the security issues existing in domestic internet giants.

Since March 2018, the technology dominated by Bitcoin has been recognized and used by more and more people. Since 2019, Ethereum has received much attention as the most disruptive product, especially its appearance has brought new vitality to the financial technology field. People have started to focus on blockchain technology and believe that blockchain has suddenly become popular. Let us take a look at what blockchain is, what it is, how it works, and its two main characteristics:

1. Immutable and traceable;

2. High transparency (public);

3. Easy to manage.