Double Spend

The delay in settlement of blockchain transactions, around 10 minutes for the Bitcoin network. Presents the opportunity to spend a digital currency multiple times before the initial transaction is settled. This conundrum is referred to as the double spend problem.

So how does the network distinguish the legitimate initial transaction from any subsequent illegitimate ones?

Proof of Work. When a transaction is initiated on the bitcoin network it is announced to all of the nodes in the network. Nodes are instructed to verify and process transactions in the order received.

Nodes reach consensus on what transaction was initiated first if multiple transactions involving the same token are pending and only validate the first one. Nodes identify the first transaction from the timestamp in the hash when it was broadcast to the network. 

This is why 6 confirmations are required for transactions to be considered final. These extra block cycles give the nodes in the network more time to reach consensus and validate a transaction. Increasing the confidence of the user receiving the funds to initiate the transaction in the first place.

Further Reading Double Spend

Double-Spending – Overview, How It Occurs, How To Resolve