YourNeko (OP)
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December 03, 2019, 10:05:20 AM |
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Greetings! I have been on hiatus from posting on BitcoinTalk for quite a while now, I have recently started school and have been extensively busy, but when I visited another e-marketplace that I frequent, I noticed a surge in Scam Reports, it all followed the general gist of this, the seller was contacted by a buyer interested in paying with Bitcoin, the buyer agreed to go first to the user, the buyer paid in bitcoin and the seller delivered the virtual product to them, and a few hours later, the $ that the buyer sent disappears from the wallet of the seller.
This is something that there is no doubt people on this forum are very familiar with, this is called Double Spending. Double Spending is described as the act of sending the same coins twice, this is an inherent risk with cryptocurrency and virtual tokens, and it has one which has been around forever, but not one that too many people who are new to crypto are familiar with. So consider this post an introduction to double-spending for newbies
**** I WILL NOT BE GOING IN-DEPTH ABOUT HOW TO DOUBLE-SPEND A TRANSACTION OR HOW IT WORKS ON A DEEP TECHNICAL LEVEL, IF YOU CAME FOR THAT, SORRY, YOU WONT FIND IT HERE ****
Anatomy of Double Spending - An example of a DS Scam To criminally over-simplify Double Spending, Double Spending is as the name states, spending the same coins multiple times. Here is an easy to understand example: - Lets say that Joe has a balance of BTC0.1 in the wallet 0x001 - Joe isn't a very good guy, but he wants to buy Item X for BTC0.09 from John - Joe sends BTC0.09 with a transaction fee of BTC0.01 and John delivers Item X - Joe used a very very low fee for the BTC0.1 transaction he sent to John, so the transaction has 0 confirmations after 30 minutes of waiting, John just thinks that the network is being slow - Joe decides to strike, taking advantage of the fact that the transaction hasn't confirmed and the fact that his fee was extremely low, along with using the RBF Protocol, he sends a duplicate transaction, a transaction with the exact same amount and fee that was used in the original transaction, but this time, he sends it to another address that he controls instead of John's, since the original transaction hasn't been confirmed yet, the first transaction is essentially overwritten on the blockchain, sending the funds to his own wallet instead of John's. - The original BTC0.09 that John had received disappears from his wallet andJoe has received his Item X, costing him only the price of the transaction fees.
** It obviously isn't this simple, but this is essentially how double-spend
Double spending is a threat that an unreal amount of casual BTC users are unaware of, this is a threat that is truly only present with virtual coins, as you cant do that with a physical currency, but theres always a price tag to progression, the price in this instance is knowledge, the more people know what Double Spending is and how to combat it, the less effective this scam will be.
And speaking of protection....
The importance of Confirmations - How to protect yourself from DSing There is only 1 100% effective way to prevent Double Spending, and it is much simpler than most people think, there is one way to absolutely ensure that a transaction never gets double-spent, and thats using confirmations, once a transaction has confirmed, there is essentially no possible way to double-spend it without the help of a 51% attack, I will not cover 51% attacks in this post but there are numerous other resources that you can use to learn about them on this forum
* I left a lot of stuff out of this post, I'm not too familiar with the technology behind double-spending attacks but I feel like this is something newbies to crypto should be aware of, if you have any additions I can make, please ensure that you comment them below so I may edit them in to the original post, thanks!
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