The double expense problem: Understand Ethereum’s solution
When it comes to digital currencies, security is essential. One of the most important concerns when implementing a decentralized system such as Bitcoin or Ethereum is the problem of double expense, where a user spends the same cryptocurrency twice. In this article, we will deepen how each important cryptocurrency addresses this problem and explore the role of nodes to maintain the integrity of the network.
Bitcoin: the traditional approach
In Bitcoin, each transaction contains a unique reference to the previous transaction (that is, the “hash”) and an unbounded transaction output (UTXO). This is known as a UTXO. Each node on the network has an extensive list of all the transactions you have seen, including input and output transactions. When processing a new transaction, the nodes verify that the sender’s funds are sufficient to cover the proposed payment. If they find that the sender does not have enough funds or that there is no valid utxo to spend, they reject the transaction.
Ethereum: a different approach
Ethereum adopts a different approach from Bitcoin by introducing the concept of “blockchains”. Instead of storing all memory transactions (as Bitcoin does), Ethereum stores them in a network of nodes worldwide. These nodes are called “miners” and verify each block of transactions to ensure that it adheres to certain rules, such as ensuring that all transactions have valid UTXO.
To avoid double expense, Ethereum is based on the concept of “blocking keys.” When a transaction is created, its sender uses a unique set of private keys to spend their funds. However, when creating a new transaction, the sender also blocks these keys by signing a UTXO for each entry and exit. This blocked key is used to create the transaction.
Nodes: Crucial components
In Ethereum, nodes play a fundamental role in maintaining network integrity. Each node has an extensive list of all the transactions it has seen, including entry and exit transactions. When processing a new transaction, nodes verify that:
- The sender has sufficient funds: The nodes verify that the balance of the sending account is sufficient to cover the proposed payment.
- There are valid utxes:
The nodes ensure that the sender has blocked keys for each entry and exit and that there are corresponding UTXO records on your list.
- Transaction inputs coincide with coincidence outputs: The nodes verify that transaction inputs coincide with transaction outputs, ensuring that all funds are assigned correctly.
Conclusion
In conclusion, the Ethereum approach to prevent double expense is based on its only blockchain architecture mechanism and lock keys. When using a decentralized network of nodes to store and verify the transactions, Ethereum ensures that each node has a precise and updated list of all the transactions it has seen. This not only avoids double expense, but also maintains the integrity of the entire network.
Key control:
- Each Bitcoin transaction contains a unique reference to previous transactions (UTXO) and is verified by nodes in the network.
- Ethereum uses a blockchain architecture with blocked keys, which avoid double expense.
- The nodes maintain an extensive list of all the transactions they have seen on the network.
- The role of nodes in the Ethereum network ensures that each node has accurate and updated information on all transactions.
