When a digital currency is spent more than once. Historically this was a problem with early versions of cryptocurrencies. Bitcoin was the first cryptocurrency to solve this problem.
Unlike physical cash, a digital token consists of a digital file that can be duplicated or falsified. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. This devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency.