Understanding the Basics of Bitcoin: Double Spending, Proof-of-Work, Trust, UTXO
If money is in a digital form instead of cash or heavy metal form such as gold, we can expect that the money flow is as cost and time efficient as sending an email.
We can send an email twice virtually without any cost, but if we do so with our money, it would be a disaster. The problem of "sending money" more than once is called "double-spending." Sending an email or other information is an Information network, the significant difference between sending money from sending an email incurred a new concept of "value network," which is what Bitcoin and blockchain–the underlying technology of the cryptocurrency, has aimed to build.
Likewise, we can expect to send money almost freely and instantly as the freedom of information that the internet has brought to us. But if we look at the cost of the movement of money and the high revenue of a typical financial institution, it is not hard to draw the conclusion that we are monetary and financially enslaved. The emergence of bitcoin and blockchain became the catalyst for "monetary freedom" and the reset of our monetary and financial system.
With traditional financial institutions, we do not need to worry about double-spending and we pay the cost of high fees and low efficiencies. The major problem is that we have to rely on trusted third parties. Other digital currencies have tried various methods; unfortunately, these digital currencies finally need to introduce trust.
Bitcoin is the first digital currency to solve the problem of double-spending. As stated in the Bitcoin white paper, "We propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes."