Double-spending

Definition

Double spending is the act of sending a transaction containing inputs that have already been spent, in an attempt to commit fraud on the network.

Consequences

Double spends are one of the most commonly discussed attacks on Bitcoin however there has yet to be a documented case of someone executing a successful double spend using Bitcoin in commerce.

The reason for this is that double spending is a crime and analogous to intentionally bouncing a check - the difference is that the merchant would have cryptographic proof that the customer attempted such an act.

Economic incentives

Bitcoin solves the double spending problem via its economic incentives. Miners have a strong incentive not to include these transactions in a block because they are at risk of having their block rejected by other miners as well as would be complicit in carrying out a crime.

These factors highlight why the solution to double spending is an economic solution, not a technical one. Many arguments have been made by developers in the past that changes are necessary to the protocol to fix this issue, but they are all unnecessary.