Topic: Transaction Finality on Bitcoin - page 3. (Read 770 times)

Is this related to exchange or wallet? 10, 6, 3, or whatever number it is, most of them are self-decided by the exchanges.

The number of 'required' confirmation is 'arbitrary'. Considering how secure the network right now then 1 confirmation is probably good enough for most cases.

"A few forks here and there."Haha,that's funny.
Can you explain in detail how a few forks can alter our transaction history?You admit that you are not an expert in Bitcoin's technical aspects,but you question the security of the blockchain and you come up with this weird "transaction finality" concept.
I'm not a blockchain guru or expert,but I have my own childish and oversimplified concept about how the blockchain works.
Old transactions get confirmed again and again every time a new transaction happens.The new transactions get confirmed again and again,every time a newer transaction happens.That's why we call it blockchain.It's like a chain.

It would depend on the transaction amount in my opinion. For small transactions in the Bitcoin blockchain, one is usually enough, for bigger, some merchants ask for three, some for six confirmations.

Plus also because of the total hashing power that Bitcoin has, one confirmation is equal to more confirmations in other blockchains, which make the other blockchains less secure.

we define a transaction to be "final" when it has a certain number of confirmation so that the cost of reversing it is so huge that it can be considered piratically impossible.
in bitcoin, 1 confirmation already increases the cost of reversing it (the 51% attack) by a lot but usually 3 is the magic number of confirmation that you can call it "final". of course there are additional consideration such as the network state, for example if there is a planned fork like in 2017 that could have a risk of splitting the chain. and also the type of node the user is running (full versus SPV).

it comes down to how centralized the cryptocurrency is. for example in bitcoin thanks to its decentralization you can't just have a fork anytime you want! forks take a lot of  time and convincing of the entire network (or at least 95% of them) to take place otherwise they won't happen. in short you have to ask whether the cryptocurrency is immutable or not.
but when it is centralized, has low hashrate, has flaws in the protocol,... like ethereum, new attack surfaces exist that can increase risks. we saw how the ethereum owners easily reversed a huge number of blocks a couple of years ago, which led to ETH not being immutable anymore. and that means your ethereum transactions can never be considered final no matter what.

I think most exchange consider 1 transaction on Bitcoin Blockchain to be consider as final. The same is applicable for wallets as after 1 confirmation you can retransfer Bitcoin to another wallet. Actually 10 confirmation are required but, 6 is considered final.

Most exchanges consider 3 confirmations secure enough to consider a transaction as final. This website uses 6 confirmation as an example but it perfectly shows how secure the Bitcoin network is, compared to altcoins: https://howmanyconfs.com/

As far as I know, confirmations are different from finality in a blockchain. Confirmation is the amount of validation made my miners on a transaction. On the other hand, Finality refers to the method on how blockchain protocols consider a transaction final.

On Bitcoin network, they appeal on what's called Probabilistic Finality. From the term itself 'Probability', it appeals to the chances of reverting a transaction to mere impossible, because it digs deep the transaction of up to six blocks, making forks extremely difficult to alter hashes.

There are other types of finalities for other blockchain-based systems. Though all of them are given criteria for either availability (fast transactions), or consistency (security filtering out bad transactions).

Reference here: https://medium.com/mechanism-labs/finality-in-blockchain-consensus-d1f83c120a9a

In short, there's no such concept.

I've curious lately to know about "Transaction Finality" on the Bitcoin blockchain. Even after being years on the crypto space, there are a lot of things related to Bitcoin's technical aspects which I'm not aware of. I'd like to know how many confirmations does a transaction need to be considered as "final" on the Bitcoin blockchain?

This is important, because if Bitcoin lacks transaction finality, then a few forks here and there could alter the history of your transactions across the Blockchain. Ethereum has been deeply concerned about "Transaction Finality" which is why the dev team has come up with Casper PoS + Sharding consensus to prevent this. Does this mean that transactions on a PoW blockchain are not final at all? I'm sort of confused with this, and I'd like someone to help me clarify about this matter.

Any help would be greatly appreciated. Thanks in advance.