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Author Topic: What is the required confirmation of bitcoin transactions? Read to know!  (Read 190 times)
The Cryptovator (OP)
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July 22, 2020, 07:47:31 AM
Last edit: July 25, 2020, 06:02:41 PM by Coolcryptovator
Merited by DdmrDdmr (2), witcher_sense (1), tranthidung (1), -CryptoViking- (1)
 #1

I don't know how much from us have read Bitcoin official community website. Perhaps we are lazy or don't have enough time to acquire basic knowledge. We know about bitcoin transaction confirmation, but I think we don't know there was an explanation on Bitcoin.org website. Even I just noticed now when I was searching for something else. That's why wondered to share with you, especially those who are newbies. I believe everyone from newbies should read this article, Some things you need to know. Here I found the information that how much confirmation for bitcoin transactions is safe. The chart is below.



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July 22, 2020, 08:21:49 AM
 #2

Thank for the info. Honestly I didn't know about this at all. Knew about 3 confirmations as that was the number I saw the most while I was waiting for transactions and 1 confirmation in most cases.

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July 22, 2020, 08:44:10 AM
Last edit: July 22, 2020, 08:59:09 AM by witcher_sense
Merited by DdmrDdmr (1)
 #3

The specific number of confirmations you should wait for depends on the amount you are receiving, not sending. For example, if you are a merchant selling coffee, you shouldn't wait for 3-6 confirmations to sell each cup of drink, because you assume no one will try to double spend such a small amount. In case your customer wasn't honest and did double spending, you will not lose much and will likely to refuse any payments from that particular customer. If you are selling your house or car, wait for as much confirmations as possible, because in this case risk much higher, I would say 30-100 confirmations is optimal for this, you are not going to risk big amounts.

A.Antonopoulos well explained that in his book "Mastering Bitcoin"

Quote
A common misconception about bitcoin transactions is that they must be “confirmed” by waiting 10 minutes for a new block, or up to 60 minutes for a full six confirmations. Although confirmations ensure the transaction has been accepted by the whole network, such a delay is unnecessary for small-value items such as a cup of coffee. A merchant may accept a valid small-value transaction with no confirmations, with no more risk than a credit card payment made without an ID or a signature, as merchants routinely accept today.

the cafe owner, is willing to accept payment for cups of coffee without waiting for confirmation (mining in a block), because the risk of a double-spend on a cup of coffee is low in comparison to the convenience of rapid customer service. This is similar to the practice of coffee shops that accept credit card payments without a signature for amounts below $25, because the risk of a credit-card chargeback is low while the cost of delaying the transaction to obtain a signature is comparatively larger. In contrast, selling a more expensive item for bitcoin runs the risk of a double-spend attack, where the buyer broadcasts a competing transaction that spends the same inputs (UTXO) and cancels the payment to the merchant.

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July 22, 2020, 10:07:02 AM
 #4

Generally almost all merchants accept bitcoin through the payment gateways which take all the risk (sure included into the fee of exchange) from "unconfirmed" transactions so in their estimation  everything happens instantly, literally.
It was just an example of a single transaction, but it is good to know that merchants can mitigate risks of accepting unconfirmed transactions with help of crypto payment processors and payment gateways. However, for those users making dozen transactions per month or per year without any intermediaries, in a pure peer-to-peer way, information regarding required, or, to put it more accurate, reasonable number of confirmation for each type of transaction will be helpful. Personally, if I wanted to sell my car for bitcoins, I would not use any third-party solutions, instead, I would wait until transaction is fully ummutable (in my opinion) and only then would allow the buyer to take it away.

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July 22, 2020, 12:26:18 PM
Last edit: July 22, 2020, 02:56:08 PM by hd49728
 #5

There are two types of transactions relate to confirmations:
- Unconfirmed.
- Confirmed.

The first one is more important and people should pay more attention on its details:
- The set up transaction fee (high, low, average).
- The estimated priority on the waiting transactions on the network.
- Replace-by-fee (RBF) enabled? I randomly took the transaction to explanate this point (RBF is not enabled).
If the fee is too low, there is risk to be rejected at the end by miners. It means that transaction will not be confirmed and be removed from the mempool.

The second one is less important. With it, people only have to pay attention on number of confirmations. 1 is only a start, 3 is good, 6 is better and 30 is a strong one.

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July 22, 2020, 02:39:22 PM
 #6

FYI bitcoin.org isn't official Bitcoin website, in fact there's no such thing as official Bitcoin website due to decentralized nature of Bitcoin.

Yeah! I was scrolling down to reply the same thing. @Coolcryptovator you should remove the word 'official' from the OP as it's misleading. Bitcoin.org is a compiled Bitcoin resource just like this forum and several other websites. After Will Binns left Bitcoin.org as website maintainer last month, I trust the website even less. Nevertheless, it still has some of the best compiled resources for Beginners to understand Bitcoin.
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July 22, 2020, 04:56:38 PM
 #7

In short, 0 confirmation tx are risky because they might be dropped from mempool if the sender use low fee; sender may trick here to scam you by using low fee and later double spend. It's possible to use the same input to spend again with higher fee and miner will confirm the later one with higher fee. One confirmation is more or less safe; it's not that easy to double spend one confirmation tx.

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