Daily use of Digital Money: The Dilemma
In today’s era, digital money is desired by every single individual, so that people may transfer them between themselves over the internet, similar to emails.
There is an abundance of fake and spam emails while we come across daily. In ancient times when the world is not aware of advanced AI-based anti-spam filters and mechanisms like Domain Key Identified Mail, spam emails used to be mammoth affair but now with the evolving system of new email platforms (DKIM, S/MIME) benefiting E-signatures to genuine messages it became strenuous to imitate a sender.
Likewise, digital signatures are entering into legal recognition by the regime as an authenticated connecting process of writing contracts between organizations and individuals. The evolving technology has a perspective to accelerate the remote commerce and indenture negotiation and execution. Furthermore, the contracts which are digitally signed can be used as a proof of authenticity to a third party, all remotely and through popular electronic channels.
The use of similar digital signature technology is being made by cryptocurrencies to prevent the fraud of impersonation and imitation.
Electronic money transactions have its own challenges, when a digital sender signed digitally it is not being recognized by above-mentioned cases ( email or document signing).
It is pertinent to agree on overall global transaction even after verifying the authenticity of the sender.
This may not look valid now, but when a prospective scammer who made two transactions at one point of time and owns $1000 in his account, both spending $1000 but send to different individuals. It is clear that only one party will receive the money because transactions may not be valid for both at the same time but the question is which beneficiary will receive the money?
The possible rules to approve these dilemmas are being figured out:
1.) The initial transaction gets cleared and the following transactions with the same balance get rejected.
This concept is clear but is it is difficult to find which transaction occurs first that is approved and which transaction occurs seconds that got rejected.
a) This requires a time stamp on each transaction.
Let us consider each transaction as a text message with an abundance of information with a detailed information of sender and receiver. To know the exact time of execution it is important to inflict an supplementary information about the transaction.
Is this the method to solve the problem?
If the digital user is baleful and has a desire to mess around with the system he could do it in a way by sending the first transaction out marked with current time. On his desktop and sending the second transaction claiming the first, according to the time information present in both of transactions. This could be treacherous if the sender is paying for goods and the receiver already accepts the payment without knowing that the same transaction could happen again misleading him with the timestamp. In this case, the sender could easily walk out with the goods without even letting the merchant know that he is not paid for this services.
It is not going to help to ask sender of digital currency to mark all his transaction if he already plans to attempt double spend attack.
b) whenever we receive a new transaction, make a note about the current time.
The above scam can be prevented if the receiver makes a record of current timestamp without relying on the honesty of the sender.
What if the receiver desires to use this digital money for his own use later? The original digital transaction can be used as an authentication, but can he prove to others that he was the first person to receive these digital coins in a worse situation when transaction by the sender has been done multiple times which means the sender sends that digital money to different merchant (found themselves under an active double spend attack performed by the sender), without knowing about one another? Even if all the victims are true to each other and are honest about the time they receive the digital currency, Which is again an improbable assumption, they could still run into an issue of comparing time stamps made at the different physical location.
2.) By the same amount of spending in different transactions can be assumed to be scam performed by the sender
Now that the issue related to signing a followed transaction that occurred prior is clear (and before another conflicting transaction), it is quite easy to believe of a similar situation in the context of this new antidote. In this rule, a trader would confirm an order trusting the sender and assume he has received the money in the form of a signed transaction by the buyer because there would be no conflicting transaction (one that spends the same digital coins) known for the merchant. As mentioned above the buyer then creates a different transaction with the same digital money which under this rule would void the first transaction which credited the trader’s account, without paying him for his goods and services.
This problem of fraudulent by digital currency is trapped in the vicious circle and are unsuccessful in the end. For a long time, this used to be considered an unsolvable problem, until the concept of Blockchain was introduced in Bitcoin.