All of the digital currencies that existed prior to Bitcoin had one feature in common, a central server or authority. While these systems worked, they had the serious drawback of being centralized, a fact that was lamented by many in the digital currency community.
This centralization ran counter to the peer-to-peer dream of many digital pioneers, like the renown “cypherpunks,” and introduced security and privacy risks. However, this centralization existed for one very good reason, the “Double-Spend Problem.” This term, “Double Spend Problem”, refers to the fact that digital goods are very easy to copy. Someone in possession of a digital token, even one that is managed with cryptography, can still copy that token rapidly and repeatedly. It doesn’t take long to realize that a currency that any holder can easily make copies of will not hold its value.
Check out the video to learn how Satoshi solved the double-spend problem!
Blockchain 101
Lesson 4/18
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