Receiving BTC Via Electrum Question

[jerry0]

I will most likely be trading with someone where i send them funds and they send me btc to my electrum.  On my electrum when i receive funds from a site or someone, i recalled it would show the btc amount such as 0.05 unconfirmed when i open up electrum to check if i receive payment or not.  Thus its added to my btc balance...well sort of with the unconfirmed.


So basically when i see that showing in my electrum wallet such as 0.05 btc unconfirmed, that means the btc is sent to me already right?  Thus it just depends how long it would take until it fully shows up in my account?  I just want to make sure of this because i will be trading with someone.  Thus i heard mentioning about double spending but once it shows that btc amount and unconfirmed, then its fine? 

[Mi5h0]

I will most likely be trading with someone where i send them funds and they send me btc to my electrum.  On my electrum when i receive funds from a site or someone, i recalled it would show the btc amount such as 0.05 unconfirmed when i open up electrum to check if i receive payment or not.  Thus its added to my btc balance...well sort of with the unconfirmed.


So basically when i see that showing in my electrum wallet such as 0.05 btc unconfirmed, that means the btc is sent to me already right?  Thus it just depends how long it would take until it fully shows up in my account?  I just want to make sure of this because i will be trading with someone.  Thus i heard mentioning about double spending but once it shows that btc amount and unconfirmed, then its fine? 

The simplest protection is to not consider a payment to have been made to you until it receives some number of confirmations. The number can depend on the value of the payment. For small payments, one is probably sufficient.
Only allowe zero-confirmation transactions from people you can trust.

[jerry0]

Hi there.  So if it has 0 confirmations, thats not safe?  I thought as long as it shows up in electrum even with no confirmations, it was okay. 

[Xynerise]

Hi there.  So if it has 0 confirmations, thats not safe?  I thought as long as it shows up in electrum even with no confirmations, it was okay.  

0-conf transactions aren't safe -- no matter what bcash shills would say.
It's even written in the white paper.
A transaction that hasn't been included in a block(i.e a transaction with 0 confirmations) can be spent elsewhere.
So if you are a merchant selling goods and you accept a transaction with 0 confirmation, after releasing the goods and the transaction still hasn't confirmed, the sender / buyer can spend the inputs for that transaction to another of his addresses and get to keep both the Bitcoins and the goods.
This breaks no consensus rules as the transaction hasn't been included in any blocks yet.

However, depending on your security model, you could choose to either reject 0 confs and wait to they have at least 1 confirmation, or accept the risk that you could be cheated before the transaction gets confirmed.

[HCP]

There is a reason most online services (like exchanges/gambling sites etc) require at least one confirmation before releasing/crediting funds... and a lot of them will require more.

If someone is trying to convince you that it is "safe" with 0 confirmations, there is a chance they are attempting to scam you.

[pooya87]

when trading with someone it depends on how much you know that someone and how much you trust them. for example i made a trade with someone recently for an amount of 0.1BTC, he never waited for any confirmation because he knew me and this was not our first trade.

but if you do not trust them or don't want to, then you have to wait for confirmation.
the recommended number of confirmation depends on the amount you are receiving and mostly on the type of wallet you are using. using a full verification wallet (full node like bitcoin core) you need a smaller number which is between 1 and 3 as long as network is normal (no forks,...).
but since you are using an SPV wallet (ie Electrum) you need a higher number of confirmation which can be as high as 30.

[jerry0]

hi there.  yes if it someone i know, then usually there is no waiting because you trust other person.  But i meant someone you dont know well etc.  Such as me sending some bank funds for their btc etc.  Obviously someone would not send btc first because its not reversible.  But i want to know if i send them money and they receive it, then they send me say 0.10 btc and it shows in my electrum wallet but unconfirmed and 0 confirmations, that means its not safe? 


When i receive btc from gambling sites, i dont ever notice since those sites i trust.  Thus sometimes it might be really fast, other times longer but that was when btc transfers were taking very long.


But are you serious about 30 confirmations?  When i receive btc from a gambling site, usually when i get a few confirmations, it shows up in my wallet and it is no longer unconfirmed.

[TryNinja]

But i want to know if i send them money and they receive it, then they send me say 0.10 btc and it shows in my electrum wallet but unconfirmed and 0 confirmations, that means its not safe?  

I would wait until you get at least 1 confirmation since the sender can try to double-spend and keep the money.

But are you serious about 30 confirmations?  When i receive btc from a gambling site, usually when i get a few confirmations, it shows up in my wallet and it is no longer unconfirmed.

Usually 1 confirmation is enough, while some services (like BitPay) will require 6 confirmations. But I haver never seen anyone talking about 30 confirmations (even for a SPV wallet).

@pooya87 Care to explain?
You can read more here: https://en.bitcoin.it/wiki/Confirmation

[Ayanamirs]

Hi there.  So if it has 0 confirmations, thats not safe?  I thought as long as it shows up in electrum even with no confirmations, it was okay.  

0-conf transactions aren't safe -- no matter what bcash shills would say.
It's even written in the white paper.
A transaction that hasn't been included in a block(i.e a transaction with 0 confirmations) can be spent elsewhere.
So if you are a merchant selling goods and you accept a transaction with 0 confirmation, after releasing the goods and the transaction still hasn't confirmed, the sender / buyer can spend the inputs for that transaction to another of his addresses and get to keep both the Bitcoins and the goods.
This breaks no consensus rules as the transaction hasn't been included in any blocks yet.

However, depending on your security model, you could choose to either reject 0 confs and wait to they have at least 1 confirmation, or accept the risk that you could be cheated before the transaction gets confirmed.

Merchants are more likely take the risk because it is more practical.

[pooya87]

the number of confirmation that you wait for depends on the risk you are taking. and the risk depends on the person you are trading with, the amount of the transaction, type of the wallet you use and also the network status.

1. if the person you are trading with is known, for example when you are buying a house and have contract with the payment address and transaction ID written inside of it. the risk is lower so you can ask for lower number of confirmation

2. it is somewhat obvious, for example someone sending 0.001BTC doesn't have the power or incentive to reverse this transaction but someone sending 10,000BTC may have that power (mining power) even though it may be nearly impossible and easily detectable.

3. when you are running a fully verifying node (like bitcoin core) you get the benefit of fully verifying everything yourself without relying on anybody else, this increases the security, for example you can detect chain splits yourself and do it fast. but when you use a Simplified Verification node (SPV like Electrum) you are relying on the node you connect to to give you correct information. for example if a fork happens your transaction may be on a wrong chain and you find out about it much later so you have to wait for more confirmation.

4. network status is the status that bitcoin network has for example currently everything is normal, but back in July 2017 there was a big risk of chain split because of UASF, SegWit, BCH fights so the recommendation goes up to 30+ read more here: https://bitcoin.org/en/alert/2017-07-12-potential-split

you can read this: https://bitcoin.org/en/you-need-to-know#instant
and bitcoin paper section 11 (page 6) for more information.