Double Spending Problem

This refers to the potential risk that a digital currency unit could be spent more than just once. When a digital currency can be reproduced at a negligible cost, it can lead to users producing several copies of it in order to spend it multiple times. This can cause the supply of the currency to rise and lead to inflation in the prices of goods quoted in the digital currency units.

The problem has been used to question the credibility of digital currencies. Various digital currencies, however, have managed to overcome the double spending problem through the use of public ledgers that record all transactions made by users and verify their authenticity.