Written by Nasser Saazi
One of the most fundamental properties of Bitcoin as a medium of exchange is that transactions, once made, remain valid and cannot be double spent. When Alice pays Bob, she wants the assurance that the payment made can never be invalidated. This is critical to the existence of the Bitcoin network.
But imagine this scenario involving cheques: Alice buys some groceries from Bob's shop. As payment, Alice hands Bob a cheque that matures in a week. But some time before the week elapses, Bob manages to form the exact cheque and forge Alice's signature, then takes his forged cheque to the bank and gets the money.
However, Bob also still has Alice's original cheque and when he takes it to the bank too, it is deemed invalid since according to the bank, the money has already been spent. Bob informs Alice of this unfortunate occurrence. Alice usually checks her bank balance through a bank app that sloppily displays inaccurate balances for customers, making them think they have more money than is the case. Due to this loophole...
Click here to read more in Nasser's article that breaks down technical details of transaction malleability.