How Do Zero-Confirmation Transactions Increase the Risk of a Double-Spend?
Zero-confirmation transactions are transactions that are broadcast to the network but accepted by a vendor or service before they are included in a block. This increases double-spend risk because the transaction is not yet secured by the blockchain's cryptographic proof-of-work.
An attacker can broadcast a payment transaction and immediately follow it up with a conflicting transaction that sends the same funds back to themselves, which a malicious miner can prioritize.
Glossar
Malicious Miner
Exploit ⎊ The term "Malicious Miner," within cryptocurrency, options trading, and financial derivatives, fundamentally describes an actor leveraging vulnerabilities in consensus mechanisms or market structures to gain an unfair advantage, often at the expense of other participants.
Zero-Confirmation
Risk ⎊ Accepting a transaction before it is included in a confirmed block exposes the recipient to the immediate risk of transaction reversal via a chain reorganization.