Cryptocurrency and double spending history: transactions with zero confirmation

【Author】 Kang, Kee-Youn

【Source】ECONOMIC THEORY

【影响因子】1.423

【Abstract】We develop a general equilibrium model of cryptocurrency to study a double spending prevention mechanism without payment confirmations. Agents trade cryptocurrency using a digital wallet, and the cryptocurrency system provides a means to verify a wallet's double spending history. A digital wallet may obtain a good reputation for no double spending attempts based on its transaction history. If a buyer makes a payment with a digital wallet that does not have a good reputation, sellers provide goods after payment confirmations in the blockchain to prevent a double spending attack. On the other hand, sellers deliver goods immediately without payment confirmations if the payment is made through a digital wallet with a good reputation as long as the cost of losing a good reputation outweighs the short-run gain from double spending. As the time required for each confirmation increases, the utility loss from delayed delivery of goods increases so double spending incentives decrease.

【Keywords】Blockchain; Cryptocurrency; Precautionary confirmation; Double spending; Trade history

【发表时间】

【收录时间】2022-01-28

【文献类型】期刊

【主题类别】

区块链技术--