Bitcoin Cash and the Double-Spending Problem
If you happened to just put money into newcomer Bitcoin Cash and have no real idea just what double-spend is then you absolutely are oblivious to one of its most important flaws. And, trust me, this is certainly a whole lot worse than what’s taking place with Ethereum at this moment. Below I will show step-by-step exactly what double-spend is and the best way to keep from losing your shirt because of it.
What is Double-Spend?
A double-spend attack is when transactions are duplicated so the exact same money is spent twice.
For example:
Let’s suppose you show up at Starbucks to get a cappuccino for $10.00.
You pay in cash.
Now that $10.00 in cash is put into their cash vault.
Undoubtedly, you just can not spend the very same $10 elsewhere to make yet another purchase.
Unless you steal it… !!!
When you paid with your paper bill, the vendor at Starbucks immediately verified your payment, and so you received your coffee in return for the cash.
However BCH is, as its name represents, electronic cash, not physical cash.
Consequently, BCH is at risk of being replicated and then rebroadcasted. This opens up the likelihood that the very same BCH could very well be spent twice by the same person.
The Double Spend Attack
In our Starbucks scenario, you paid cash, which means that the payment was confirmed and verified on the spot by another person. But with BCH, if this confirmation process is absent, it may give rise to double spending.
Let’s imagine you possess a single BCH you attempt to spend twice.
You complete one BCH purchase with a service provider. Then, you again sign and send the same exact same BCH to a second BCH address in an attempt to scam this new vendor.
Now, both of these transactions enter the unconfirmed pool of transactions. Even so, only your initial transaction receives the required confirmations, since it was first, and is certified by BCH miners. Your subsequent transaction will fail to get sufficient confirmations given that the miners judged it as invalid, so it’s taken out of the network.
But wait… suppose both of these the transactions are grabbed at the time by miners?
When miners grab the two transactions simultaneously from the pool, it follows that whichever transaction receives the highest number of confirmations from the network is incorporated into the blockchain, so the other one is thrown out.
The Majority Attack?—?The 51% Attack or >50% Attack
Now, if by some means a miner captures over 50% of the hash power of the network, double spending can occur.
If you remember “Hash power” denotes the computational power which validates transactions as well as blocks in a Proof of Work (PoW) consensus process.
In the event that an attacker gains this control, he/she can easily reverse pretty much any transaction and make an independent blockchain which everybody will deem as genuine.
In effect, as the majority miner with the most hash power, he/she literally becomes the network.
That being said, check out just how many happen to be mining BCH: https://blockchair.com/bitcoin-cash/blocks
See The Dilemma
Now, picture what’ll take place with the price of your BCH when everyone starts screaming bloody murder over getting ripped off with BCH used in double-spending.
Now can you appreciate why you have to get rid of your BCH immediately?
But hang on … “Isn’t SXAS also susceptible to the very same thing?,” you might be asking.
Absolutely not! Why?
Because SXAS is built on the WAVES platform which happens to be not PoW but a Leased Proof of Stake consensus protocol which, by design, makes double-spend attacks out of the question.
This is obviously just one more good reason why SXAS is truly one of the most secure and attractive cryptocurrencies you can get.
What’s more, if you keep over 500K SXAS in your WAVES Wallet you are instantly enrolled in our 5% airdrop bonus program. So, if you would like to make 5% on your money month-after-month, simply keep that minimum amount and you’ll earn your instant rewards.
Easy, right?
Here To Serve,
Jo Polanco
CEO/Founder of Nexus Labs
Bitcoin Cash and the Double-Spending Problem was originally published in Saske on Medium, where people are continuing the conversation by highlighting and responding to this story.