With traditional physical currency, the double-spending problem is dramatically less likely to occur. This is because everyone involved in an exchange has immediate visual access to the original physical currency involved. In this case, a currency-holder would coin double bitcoin much more likely to take the risk of spending a unit of currency twice, because it is less likely that they will be caught and made to face the consequences of the deceitful exchange. Bitcoins are a decentralized, open-source digital currency, which have become the most widely used alternative currency since being introduced in 2009.
With no central agency to verify that the currency is spent only once per possession, some were initially skeptical of its safety against market failure. Satoshi Nakamoto, the designer of the bitcoin protocol, had anticipated this problem, and built in a mechanism to verify each transaction that a bitcoin goes through. The bitcoin uses a mechanism based on transaction logs to prevent double-spending. Each bitcoin has a log of digital signatures attached to it, denoting the true path of its exchanges. This log is open for anyone to view, so anyone can verify the correct exchange path. SHA256 hash function given to them dependent on the rate at which mining is currently being done. In return for carrying out these difficult proof-of-work computations, bitcoin miners are compensated with new bitcoins generated after each transaction.