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Double-spending is a flaw within cryptocurrency protocols that allow users to spend tokens or coins more than once. Cryptocurrencies consist of files that users can duplicate or falsify when they are vulnerable. Double-spending leads to the inflation of the cryptocurrency involved. Blind signatures and secret splitting are ways to prevent double-spending. 


Blind Signatures

Blind signatures are digital signatures in which the content of a message is disguised before it is signed. People can verify the blind signature against the original. 

Secret Splitting

Secret splitting or secret sharing is a method to distribute a secret among multiple people, each knowing a part of the secret. People can solve the secret only when they combine enough parts of the secret.

How are cryptocurrency transactions verified?

Centralized currencies use a central trusted party to verify transactions. Decentralized currencies don’t use a third party to verify transactions, but rely on validators. These are servers that store copies of the current blockchain ledger. Validators reach a consensus about the legitimacy of transactions. They do this by either proof-of-work or proof-of-stake. Proof-of-work is a cryptographic system that involves the solving of computational puzzles called mining. With proof-of-stake, the validators that own the most cryptocurrency have the most voting power when it comes to deciding the legitimacy of transactions. 

51% Attack

A 51% attack is when a network of computers contributes more than 51% of all computational power to a decentralized proof-of-work system. Any such network can overturn transactions and double-spend. In 2014 obtained more than 51% of the total Bitcoin computational power. They decided to voluntarily cap their hash rate to 39,99% and requested other mining pools to do the same if that ever were the case.

Business24-7 aims to help those interested in cryptocurrency make safe and informed investing decisions. We are dedicated to offering our readers unbiased reviews of leading cryptocurrency exchanges for traders at all levels. Cryptocurrency exchanges are included in our reviews if they are safe, liquid, regulated by proper authority, or decentralized. 

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

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Stefan Grasic (Dipl.-Jur) is the World Wide Director of research for Buisness24-7 and has considerable experience in the financial and investment niche, but also enjoys writing articles for the general readership. Stefan is an active Crypto, Forex and general investment researcher advising blockchain companies at their start up level. He keeps fit by mountain biking, surfing, skiing and lots of other adrenaline sports.


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