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Double-Spending Problem and 51% Attack

Double-Spending Problem​

One of the key challenges in digital payment systems is the double-spending problem. It refers to the possibility of using the same digital asset multiple times to make several payments.

In traditional centralized systems, this problem is solved by a trusted intermediary, such as a bank, which keeps track of balances and validates transactions. In a decentralized environment, where there is no central authority, this approach is not applicable.

Double Spending in Decentralized Systems​

In a decentralized network, participants do not have to trust each other. Without a special coordination mechanism, a malicious actor could attempt to send the same transaction to multiple recipients simultaneously.

Blockchain addresses this issue through:

Blockchain’s Role in Preventing Double Spending​

Each transaction in the blockchain is included in a block and assigned a position in the chain. Once the block is confirmed, the transaction is considered final.

Attempts to reuse the same funds will be detected by network nodes, since such a transaction conflicts with the already recorded state of the ledger.

Transaction Confirmations and Finality​

In most blockchains, a transaction is considered more reliable the more blocks are added after the block that includes it. These subsequent blocks are called confirmations.

The more confirmations a transaction has, the theoretically more difficult it is to alter the blockchain history and reverse the transaction.

Forks and the Importance of Confirmations​

Sometimes, multiple blocks are created almost simultaneously in the blockchain. This temporary "branched" chain is called a fork. Network nodes eventually select the chain with the highest cumulative difficulty (in Proof-of-Work) or the largest stake (in Proof-of-Stake).

In such cases, early transaction confirmations may be temporarily reversed until the chain fully stabilizes. Practical transaction finality is reached only after several subsequent blocks, reducing the risk of reversal or double spending. Transactions that were reversed are later processed and included in new blocks.

For example, in the Bitcoin network, a transaction is generally considered final after 6 confirmations. In PoS networks, practical finality is also achieved after several blocks, although the exact number depends on the protocol rules and the size of validators’ stakes. In practice, for the Ethereum network, some cryptocurrency exchanges wait for more than 50 confirmations (blocks) before considering a deposit final.

51% Attack​

A 51% attack is a hypothetical scenario in which a single participant or a group of participants controls more than 50% of the network's computational power (in Proof-of-Work systems) or stake (in Proof-of-Stake systems).

In this case, the attacker could potentially:

  • temporarily reorder transactions,
  • reverse their own transactions,
  • ignore other participants’ transactions,
  • execute double spending.

Limitations of a 51% Attack​

Even in the event of a successful 51% attack, the attacker cannot:

  • create transactions on behalf of other users,
  • access other users’ funds,
  • alter data in blocks with sufficient confirmations without significant cost.

Furthermore, executing such an attack requires enormous resources and typically undermines confidence in the network, making it economically unprofitable. However, a 51% attack on less popular blockchains is possible without substantial resources. For example, in mid-2025, the Monero network experienced a temporary control of over 51% of its computational power. The community actively resisted this centralization, and the attack caused no damage to the network.

Key Takeaways​

The double-spending problem is a fundamental challenge for decentralized digital systems. Blockchain addresses it through a combination of mechanisms:

Understanding the limitations and risks, including 51% attacks and forks, allows for a more realistic assessment of the security and trustworthiness of various blockchain projects.