Blockchain tutorial 22: Double spending; third party Video Lecture | Blockchain Tutorial: A Fundamental Guide - Cryptocurrency

in this video I will explain what double
spending is and why third
this I use and why we shouldn't use
third parties
in 83 each case was conceived by David
job as an anonymous cryptographic
electronic money it worked as follows
this is a simplified explanation a bank
created the electronic money which are
cryptographically signed the digital
money contains a unique ID also known as
token users can purchase this digital
money Bob was to buy things from Alice's
shop he sends her the required a cash
value having received the payment she
sends the e cash to the issued bank and
waits for acceptance the bank check if
the e cash token has not already been
spent Alice sends the goods after the
bank has informed her that the ETS is
felid in 1989 the use of each cash was
abandoned mainly because credit cards
was the consumers choice for payment the
ecosystem needed a third party in this
example a bank to check if the digital
money is not double spent because
electronic files can be easily
duplicated in this drawing bob sense LS
digital money and Ellison sees digital
money to the bank to check if the
digital money is not being spent if it
is not double spin Ellison swap the
product the double spending problem is
the main problem you need to solve if
you introduce a new electronic money
scheme in this drawing if it's double
spending because it sends the same case
to both Alice and Bob
this problem can be solved by using an
online center of trusted third party
that can clarify whether a token has
been already spent this party can be a
bank broker or any entity which
facilitates interactions between two
parties who both trust the third party
however there are disadvantages using
third parties here are few disadvantages
using third parties related to financial
services the 2008 financial crisis where
several banks filled teaches us that
there is no such thing as a trusted
third party they failed because of
mismanagement greed or they can be
involved in illegal big activities half
of the adults around the world doesn't
have access to financial services
because the financial institutions are
too far away and or too expensive to use
third parties are commercial entities
and they will charge fees for their
services if you insert a new electronic
money one of the goal is to make it
accessible and payable to anyone in the
world third parties have the power to
suspend customer counts for example in
2010 PayPal has suspended WikiLeaks
donation account and froze its efforts
PayPal claims
British leaks to encourage others to
engage in illegal activity this was not
a result of a legal process but rather a
result of fear of falling out of favor
with Washington
third parties can deny or limit access
to your assets for example in 2015
Greek bags limited cash withdrawals
because of the rush on the banks the
Greeks grew fearful of the possibility
of an economic collapse but there is a
solution solving the total spending
problem without the use of a third party
because was the first application which
has solved the double spending problem
without the use of a central trusted
third party satoshi nakamoto consists
bitcoin and created its original
reference implementation satoshi
nakamoto solves the double spending
problem using a technology which is now
called today the blockchain technology
the system is based on cryptographic
proof instead of trust blockchain
technology was originally used as a
cryptocurrency for payment transaction
between two parties but nowadays it can
be used for example in notary services
identity services voting etc