<p>The primary mechanism of attack in most financial systems, Bitcoin included, is a "double spend" attack which essentially allows the spending of the same money in multiple places either by duplication of funds or by revocation of the earlier of two transactions. We've actually addressed a number of such attacks on the StackExchange site here. Try looking at questions with the <a href="/questions/tagged/doublespend" class="post-tag" title="show questions tagged &#39;doublespend&#39;" rel="tag">doublespend</a> tag.</p>

<p>The two most commonly discussed are the <a href="https://bitcoin.stackexchange.com/q/658/132">51% attack</a> and the <a href="https://bitcoin.stackexchange.com/q/1184/132">Finney attack</a>.</p>

<p>The 51% attack requires the attacker to hold 51% or more of the complete hashing power of the Bitcoin network. Once the attacker holds the majority of all hashing power he/she may spend bitcoins and then fork the blockchain in such a way as to not include the block they were spent in. This is incredibly expensive and not arbitrarily done. It would also be somewhat detectable as the forking blockchain would regularly cause problems with other transactions until the 51% attack completed.</p>

<p>The Finney attack can be done by a solo miner without 51% of the network hashing power. The miner waits until they solve a block and place a transaction in that block in which they send all their coins to another address they control, but withhold their result. They then spend coins from the originating address elsewhere and then release the block. This essentially breaks the order of operations and makes the valid transaction impossible since the originating address no longer contains an adequate balance to have sent the coins.</p>

<p>These have both been discussed at great length and from many angles here on the StackExchange site. Again, try looking up the <a href="/questions/tagged/doublespend" class="post-tag" title="show questions tagged &#39;doublespend&#39;" rel="tag">doublespend</a> tag.</p>

CC BY-SA 3.0
2011-09-24T00:20:19.543Z
2011-09-24T12:02:57.670Z
2017-04-13T12:47:36.707Z
David Perry
<ul>
<li>What are controls that are in place to detect and/or prevent fraud within the bitcoin system?</li>
<li>Are there any know exploits, or potential threats to the system?</li>
</ul>

CC BY-SA 3.0
2011-09-24T00:01:32.220Z
This question is pretty open-ended and vague. Is there a particular type of fraud or exploit you are concerned about?
lemonginger
CC BY-SA 3.0
2011-09-24T01:04:17.977Z
Attacks pretty much fall into three categories. Double spending attacks, exploiting client bugs, and defects in the cryptographic operations used. The most interesting (because they're unique to cryptographic currencies and thus less well studied) are double spending attacks.
David Schwartz
<security><fraud>
Fraud Detection & Prevention
blunders
# Fraud Detection & Prevention

(Asked by: username_0 on 2011-09-23)

* What are controls that are in place to detect and/or prevent fraud within the bitcoin system?
* Are there any know exploits, or potential threats to the system?

**Tags:** security, fraud

> **Comments:**
> **username_1**: This question is pretty open-ended and vague. Is there a particular type of fraud or exploit you are concerned about?  
> **username_2**: Attacks pretty much fall into three categories. Double spending attacks, exploiting client bugs, and defects in the cryptographic operations used. The most interesting (because they're unique to cryptographic currencies and thus less well studied) are double spending attacks.  

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## 1 answers

### Answer by username_3 on 2011-09-24. Score: 4 | Accepted answer

The primary mechanism of attack in most financial systems, Bitcoin included, is a "double spend" attack which essentially allows the spending of the same money in multiple places either by duplication of funds or by revocation of the earlier of two transactions. We've actually addressed a number of such attacks on the StackExchange site here. Try looking at questions with the [doublespend](/questions/tagged/doublespend "show questions tagged 'doublespend'") tag.

The two most commonly discussed are the [51% attack](https://bitcoin.stackexchange.com/q/658/132) and the [Finney attack](https://bitcoin.stackexchange.com/q/1184/132).

The 51% attack requires the attacker to hold 51% or more of the complete hashing power of the Bitcoin network. Once the attacker holds the majority of all hashing power he/she may spend bitcoins and then fork the blockchain in such a way as to not include the block they were spent in. This is incredibly expensive and not arbitrarily done. It would also be somewhat detectable as the forking blockchain would regularly cause problems with other transactions until the 51% attack completed.

The Finney attack can be done by a solo miner without 51% of the network hashing power. The miner waits until they solve a block and place a transaction in that block in which they send all their coins to another address they control, but withhold their result. They then spend coins from the originating address elsewhere and then release the block. This essentially breaks the order of operations and makes the valid transaction impossible since the originating address no longer contains an adequate balance to have sent the coins.

These have both been discussed at great length and from many angles here on the StackExchange site. Again, try looking up the [doublespend](/questions/tagged/doublespend "show questions tagged 'doublespend'") tag.


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