Topic: Why some platforms need X confirmations? - page 2. (Read 1406 times)
to prevent double spending/fraud transactions
If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?
Saying that "a bitcoin transaction is irreversible" is a simplification. A transaction is not reversible in ordinary circumstances, but...
Without getting into too much technical detail, a transaction can possibly be canceled before the first confirmation by simultaneously making another transaction that spends the same bitcoins (so-called "double-spending"). If the competing double-spend transaction is the one that is added to a block, then the original is canceled (and thus reversed).
It is possible for a block in the block chain to be replaced by another block. There is about a 1.5% chance of that happening to a newly added block. So, even if the original transaction is added to a block in the block chain, there is a small chance that the block is replaced by a diiferent block that may contain the competing double-spend transaction, which would cancel the original transaction.
The permanence of a block depends on the number of blocks that follow it, so waiting for a certain number of blocks (typically 1, 3, or 6) reduces the chances of becoming the victim of a double-spend.
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. 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?
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.
51% hashrate is a number which miners need for a double spend attack to succeed with 100% chances. The lower the percentage, the lower the chances. Services that require significant amount of confirmations probably do not want to lose their coins at any case for example, exchanges. For normal brick and motar stores, 1 confirmation or even 0 confirmation is enough for the risk to be reduced. That is if precautions are taken.
If bitcoin transactions are irreversible, why some platforms (online wallets, exchanges, etc) need X confirmations to "validate" a transaction?
To prevent a double spending attack, at times the network can take more than 10 minutes to validate the transaction and if a block is not found quickly then in order to ensure that their is no mistake between two different communicating transactions to different addresses being propograted exchanges use 1 to 3 confirms before confirming the amounts.
There is always a risk that the blockchain might fork, which means there will be two blockchains for a short duration until the miners decide which is the best chain. Coins on the blockchain that gets discarded can be invalid on the other blockchain. After six confirmations it's safe to assume there has been no fork, and that your coins are safe. Most exchanges wait for six confirmations to protect themselves from the possibility of a fork.
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. 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?
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.
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?
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?
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