How to Prevent Double Spending in a Centralized Crypto Exchange?

Problem-
Double spending happens when an exchange allows users to submit multiple withdrawal requests before balances update. Without atomic transactions, funds can be manipulated.

Solution-
Use database transactions with ACID properties in PostgreSQL.

Example Implementation in Node.js using Sequelize ORM-
javascript

const { Sequelize, DataTypes } = require('sequelize');
const sequelize = new Sequelize('crypto_exchange', 'user', 'password', { dialect: 'postgres' });

const User = sequelize.define('User', {
    balance: { type: DataTypes.FLOAT, allowNull: false }
});

const withdrawFunds = async (userId, amount) => {
    const transaction = await sequelize.transaction();
    try {
        const user = await User.findByPk(userId, { transaction });

        if (user.balance < amount) throw new Error("Insufficient funds");

        user.balance -= amount;
        await user.save({ transaction });

        await transaction.commit();
        console.log("Withdrawal successful");
    } catch (error) {
        await transaction.rollback();
        console.error("Transaction failed:", error.message);
    }
};

withdrawFunds(1, 100); // Example call

Using ACID transactions ensures balance updates occur atomically.

Build secure, scalable, and feature-rich platforms tailored to your business needs. From blockchain integration to real-time trading, get end-to-end solutions for your crypto exchange project. Let's create the future of digital trading together with Centralized Crypto Exchange Development.