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Author Topic: Time of verification  (Read 490 times)
roeylee
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May 28, 2014, 04:40:22 PM
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I read it takes about 10 minutes to verify a transaction.
A merchant might supply the goods to a customer and then find out that the transaction wasn't "approved"?
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hilariousandco
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May 28, 2014, 04:54:02 PM
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Have you sent a bitcoin payment yet? It takes ten minutes for a confirmation, but sending the money is instantaneous. It's highly unlikely that you're going to get a double spend, but most merchants will use a payment processor that will ensure against this sort of stuff just like credit card processors do.

http://www.reddit.com/r/Bitcoin/comments/1urklr/why_arent_the_transaction_confirmation_times_a/

Just do some googling and you'll see it shouldn't be a problem.

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May 28, 2014, 05:21:10 PM
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I read it takes about 10 minutes to verify a transaction.
A merchant might supply the goods to a customer and then find out that the transaction wasn't "approved"?
If a merchant is supplying tangible goods to the customer, it is advisable to wait for 6 confirmations.

If a merchant is supplying digital goods to the customer, it is advisable to wait between 1-6 confirmations depending on the good's value.

This paper could be the basis for an improved calculation: https://bitcoil.co.il/Doublespend.pdf

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May 28, 2014, 05:24:22 PM
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If a merchant is supplying tangible goods to the customer, it is advisable to wait for 6 confirmations.

6?

Why 6?

Why not 5, or 7?

Is there something magical about the number 6 that makes it the right number of confirmations to wait for?

Personally, I'd say that's excessive for most retail situations.

If a merchant is supplying digital goods to the customer, it is advisable to wait between 1-6 confirmations depending on the good's value.

That depends a lot on the particular digital goods being supplied.

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May 28, 2014, 05:26:04 PM
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I read it takes about 10 minutes to verify a transaction.
A merchant might supply the goods to a customer and then find out that the transaction wasn't "approved"?

If a consumer attempts to reverse a transaction for something they've purchased, that's called fraud.  The merchant should identify and prosecute the criminal.

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May 28, 2014, 05:47:39 PM
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its 10 minutes for each verification. A transaction is fully confirmed(that is, without possibility of fraud) in the 6th confirmation(this is why 6 confirmations is the magic number).

Some sites accept less confirmation, specially if they can revert your actions in case of fraud. For exemple, BTC-e requires 3 confirmations before your deposit be credited.
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May 28, 2014, 06:03:15 PM
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its 10 minutes for each verification. A transaction is fully confirmed(that is, without possibility of fraud) in the 6th confirmation(this is why 6 confirmations is the magic number).

In what way does the 6th confirmation make it "without possibility of fraud"?  Why isn't is "without possibility of fraud" after 5 confirmations?

The point I'm trying to make is that many people seem to imbue the number 6 with some magical power that makes it impossible to reverse.

In order to "reverse" a confirmed transaction, you have to create blocks faster than the rest of the honest network.  This requires a hugh amount of hash power.  If you have enough hash power to reliably reverse a transaction that has 5 confirmations, then you have a really good chance of reversing a transaction that has 6 confirmations too.

Once you have 1 confirmation, it becomes extremely difficult to reverse the transaction unless a very large mining pool is assisting you in your attempt at fraud.  Each additional confirmation makes it significantly more difficult to "reverse" the confirmed transaction (even with the help of a very large mining pool).

So:
5 confirmations requires more luck and more hashing power than 4 confirmations.
6 confirmations requires more luck and more hashing power than 5 confirmations.
7 confirmations requires more luck and more hashing power than 6 confirmations.

Each business needs to decide for themselves how much risk they are willing to accept, and at what cost.

Choosing "6 confirmations" as some sort of "magic number" that makes the transaction irreversible is a fantasy.  In the extreme majority of cases, most businesses will be just fine accepting 1 or 2 confirmations.  In many cases, a business can accept 0 confirmations (in other words, they can accept the transaction immediately after it is sent) without any increase in risk beyond the risks they are already accepting by operating the business.

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