First Seen Rule for Transaction Validity

We need a way for the payee to know that the previous owners did not sign any earlier transactions. For our purposes, the earliest transaction is the one that counts, so we don't care about later attempts to double-spend.

- Satoshi Nakamoto, Bitcoin Whitepaper

To address the double-spending issue without a centralized authority, Bitcoin employs the First Seen Rule. This rule dictates that the first valid transaction that spends a given UTXO is the one accepted by the network. In scenarios where two conflicting transactions are broadcast simultaneously, the transaction that reaches the majority of nodes with the most hashpower is the one that gets recorded in the blockchain.

This mechanism ensures that only one version of the transaction is accepted, while the other is discarded, thus preventing double spending. Additionally, systems such as Double Spend Notifications can alert network participants of any attempts to double spend, further enhancing the security of transactions.