Why some platforms need X confirmations?

[ranochigo]

Well, first of all hi to everybody, i'm a newbie in this cryptocurrency thing, so a lot of doubts are in my mind these days.
I have this question, looking here for the answer I didn't found yet, basically the subject says it all.

If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?

You answered yourself. Exactly due to fact that bitcoin transaction are irreversible it is wise to wait for at least 1 confirmation of the network.
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.

Even with 0 confirmations the risks of double spend are insanely overblown. Unless you are paying a lot for something really important, then chances are you can be perfectly ok with 0 confirmations and sleep better at night, certainly better than credit card transactions.

For daily transaction, the merchant is more likely to pay more in fees or accept a fraudent note compared to the amount of double spends that can happen. If the merchant takes precaution, it's hard for anyone to double spend unless a mining pool cooperates with attacker which is quite expensive and it isn't guaranteed unless it owns majority of network. The only problem I can see is in a spam attack, if the user does not pay sufficient fee, it can take sometime.

The worst case scenario is if pools accept RBF patch. If it does happen, users can simply use another transaction with higher fee and relay to the pool to replace the existing transaction. Won't succeed 100% of the time and the reference client don't even relay double spends.

[Amph]

Well, first of all hi to everybody, i'm a newbie in this cryptocurrency thing, so a lot of doubts are in my mind these days.
I have this question, looking here for the answer I didn't found yet, basically the subject says it all.

If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?

You answered yourself. Exactly due to fact that bitcoin transaction are irreversible it is wise to wait for at least 1 confirmation of the network.
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.

Even with 0 confirmations the risks of double spend are insanely overblown. Unless you are paying a lot for something really important, then chances are you can be perfectly ok with 0 confirmations and sleep better at night, certainly better than credit card transactions.

The risk is not zero though.   Double spends can happen so why not prevent them?

With waiting for a few confirmations you stop double spending, and assure you receive the BTC.  So I think it's worth it and we will people continue to wait.

they actually happened a couple of times, and i remember one of them was with okpay https://bitcointalk.org/index.php?topic=152348.0

[ranochigo]

Well, first of all hi to everybody, i'm a newbie in this cryptocurrency thing, so a lot of doubts are in my mind these days.
I have this question, looking here for the answer I didn't found yet, basically the subject says it all.

If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?

You answered yourself. Exactly due to fact that bitcoin transaction are irreversible it is wise to wait for at least 1 confirmation of the network.
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.

Even with 0 confirmations the risks of double spend are insanely overblown. Unless you are paying a lot for something really important, then chances are you can be perfectly ok with 0 confirmations and sleep better at night, certainly better than credit card transactions.

The risk is not zero though.   Double spends can happen so why not prevent them?

With waiting for a few confirmations you stop double spending, and assure you receive the BTC.  So I think it's worth it and we will people continue to wait.

they actually happened a couple of time, and i remember one of them was with okpay https://bitcointalk.org/index.php?topic=152348.0

It happened only once in Bitcoin's history. Of course it could have happened again if the merchant didn't run a full node in the recent chain fork. In the incident you said, the merchant wasn't on the correct fork which no amount of confirmations would help. There isn't much protection against this except to cease payments if a fork is reported or network alert is issued.

[Amph]

Well, first of all hi to everybody, i'm a newbie in this cryptocurrency thing, so a lot of doubts are in my mind these days.
I have this question, looking here for the answer I didn't found yet, basically the subject says it all.

If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?

You answered yourself. Exactly due to fact that bitcoin transaction are irreversible it is wise to wait for at least 1 confirmation of the network.
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.

Even with 0 confirmations the risks of double spend are insanely overblown. Unless you are paying a lot for something really important, then chances are you can be perfectly ok with 0 confirmations and sleep better at night, certainly better than credit card transactions.

The risk is not zero though.   Double spends can happen so why not prevent them?

With waiting for a few confirmations you stop double spending, and assure you receive the BTC.  So I think it's worth it and we will people continue to wait.

they actually happened a couple of time, and i remember one of them was with okpay https://bitcointalk.org/index.php?topic=152348.0

It happened only once in Bitcoin's history. Of course it could have happened again if the merchant didn't run a full node in the recent chain fork. In the incident you said, the merchant wasn't on the correct fork which no amount of confirmations would help. There isn't much protection against this except to cease payments if a fork is reported or network alert is issued.

it's actually two times and maybe three i have my source, the second one is this https://bitcointalk.org/index.php?topic=327767.0


p.s. third one is a perhaps, it was told to me by an user in one post, i don't remember it anymore, but maybe i'm confusing it with the second one, but anyway you have two attempts

[ranochigo]

-snip-
it's actually two times and maybe three i have my source, the second one is this https://bitcointalk.org/index.php?topic=327767.0

A double spend is defined as spending a coin twice and both getting accepted by the miner. It is quite impossible without the miner's participation.

Ghash.io sent a 0 fee TX which has a very low fee. If they win, they will mine the transaction and if not, they will mine a replacement transaction. This is very easy to do if you have a mining pool behind you with large hashrate. Betcoin revealed the result before the transaction was confirmed which is quite bad. Currently, satoshibones as an example only reveal the result if the unconfirmed TX has at least 0.0001BTC/KB of fee which is more than sufficient to be qualified as a medium-high priority. This effectively hinder the attacks and cause it to have a lower chance of succeeding. Of course, the attacker can mine a block with the transaction and relay it only if it wins and have to recalculate if it loses. It sounds great but the attacker would end up losing the miners or profits if he is mining itself.

Merchants can also take the same precaution to make sure that the transaction's output isn't spam and sufficient fees are included. It is alright for medium transaction to be accepted at 0 confirmation.

Third one please.

[zodiac3011]

this is used to avoid double spending attack I think or they want to make sure that the transaction is correct and they are on the right fork

[ATguy]

This confirmation things sucks sometimes... A while ago, there were some "flash" sales going on, and I ordered something. The deals expired every 1 hour and then they replaced it

with another item. I scanned and paid within the hour, but the transaction did not go through due to "stress testing" going on for nearly 2 hours 20 minutes. {You remember those

times?} Well the site confirmed the sale, once 3 confirmations went through, but they made me pay the full amount, less 20%. I lost out on a less 50% discount. 

Yes I remember I had to wait few hours in one of these "stress testing". People defending 1 MB Bitcoin and waiting for the fee market to develop are out of reality. Not only this stress testing will go on forever but the backlog of waiting transaction will never clear because there will be constant higher number of transactions wanting to be added than is even the current Bitcoin capacity! Hopefully this scenario will not happen because it is not hard to imagine how quickly would people abandom Bitcoin in such long lasting scenario...