Difference between revisions of "Confirmation"
 
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'''Bitcoin transaction confirmation''' is needed to guarantee that a payment is finalized. One of the main advantages of bitcoin is that it solves the problem of [[Double-spending|double-spending]][https://bitcoinsv.io/bitcoin.pdf], i.e. the risk that a digital currency token may be copied and spent more than once. In spite of having no central authority to verify that its tokens are not being duplicated, bitcoin successfully avoids double-spending through a system of decentralized transaction confirmation, based on the [[Consensus|consensus]] of a network of validators. Bitcoin SV transaction confirmation time cannot be precisely predicted. However, once a transaction has been relayed around the network it has a high probability of being included in the next mined [[block]].
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'''Bitcoin transaction confirmation''' is the process of finalising a transaction - with an economically expensive attestation - by the Mining network that the transaction is valid, and does not conflict with any previously seen transactions. One of the key functions of Bitcoin, is that it solves the problem of [[Double-spending|double-spending]] by establishing the order in which conflicting transactions have been publicly broadcast on the network. [https://bitcoinsv.io/bitcoin.pdf], i.e. the risk that a digital currency token may be copied and spent more than once. In spite of having no central authority to verify that its tokens are not being duplicated, Bitcoin successfully avoids double-spending through a system of distributed transaction confirmation, based on the [[Nakamoto Consensus|consensus]] of a network of validators. Bitcoin SV transaction confirmation time cannot be precisely predicted. However, once a transaction has been relayed around the network it has a high probability of being included in the next mined [[block]] if the including transaction fee is sufficient to satisfy most Miners.
  
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==How to confirm bitcoin transaction? ==
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==How Bitcoin transactions are confirmed==
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A transaction is a transfer of value between Bitcoin wallets that gets included in the [[blockchain]]. Bitcoin SV are not immediate but very fast. When a user wishes to send bitcoins, information is broadcast from her wallet to the (validators/miners in the) network, who verify that she has enough coins, and that they have never been spent before. Once validated, [[Mining|miners]] will include this transaction – along with others – in a new [[Block|block]] in the blockchain. This is called a '''transaction confirmation'''. The transaction is now said to be confirmed. Each time a new block is added to the chain (every ten minutes), the transaction is said to be confirmed again.  
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A transaction is the exchange of information between parties. That information can be a quantity of [[Satoshis}, tokens or data of some other kind. Confirmation occurs when that transaction is included in a block that is added to the Bitcoin [[Blockchain]]. When a user wishes to have a transaction confirmed, the complete transaction is broadcast from their wallet to Miners in the network who verify that it is valid.  
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Once validated, [[Mining|Miners]] will decide whether or not to include this transaction in their block template and attempt to mine it.
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When a Miner discovers a block that includes the transaction, it is considered '''confirmed'''. Each time a new block is added to the chain, the transaction is said to be confirmed again with the number of confirmations, being the number of blocks added to the ledger that build upon the block containing the transaction. This generally considered to be a measure of how difficult it would be for a dishonest Miner to invalidate the transaction by mining a longer competing chain containing a double-spend.
  
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== Bitcoin SV confirmation time ==
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Typically, a transaction that is sent to the network with fees that adhere to the acceptance rate of X% of the network's hash rate, will have X% chance of being mined in the next block.
  
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== Bitcoin SV Confirmation Time ==
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For example, if it is known that 20% of nodes will accept transactions at a given fee rate, the user can assume that there is a 20% chance of it being included in the next block, or conversely that it is likely to be mined in 1 of the next 5 blocks, or within a 50 minute timeframe.
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To answer the question "'''How long does it take to transfer bitcoins?'''" one needs to understand that bitcoin transaction confirmation time depends on many factors. The deeper a transaction is buried, the harder it will be to manipulate. Although 0/unconfirmed transactions could be reversed via Finney attack, race attack, or [[|Attacks|51% attack]], small amounts of money will not be worth the trouble. Larger sums are worth protecting under more bitcoin confirmations. The number six is just an arbitrary limit, beyond which the feasibility of an attacker being able to amass more than 10% of the network's hashrate for purposes of a transaction falsification becomes negligible (a risk lower than 0.1%).
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For users whose transactions are less time critical, this is a mechanism to reduce transaction fees, especially in high volume applications.
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Having understood how transactions occur, you should find out what affects the speed of processing and verification of information. To speed up the process, you need to know that it can slow down. Usually at the final time is affected by:
 
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* network utilization;
 
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* commission;
 
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* variation in network hash rate.
 
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The influence of the first factor is only noticeable when transaction throughput capacity is close to being reached. When the system needs to process many requests, users have to wait. However, as Bitcoin SV transaction volume rarely ever reaches block or network capacity and transactions are usually validated within a few seconds. Some transactions that pay ultra-low fees (<1 [[Satoshis|satoshi]]/byte) may not be relayed by a proportion of mining nodes on the network, reducing the likelihood of confirmation within 1 [[block]]. These transactions, however are rare as Bitcoin SV default minimum-fee settings are low.
 
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==Number of Bitcoin SV Confirmations==
 
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A regular bitcoin sv client will show the number of confirmations as part of the transaction metadata. In some older implementations of bitcoin the transactions were labelled "unconfirmed" until they had 6 confirmations. There is nothing special about the default, often-cited figure of 6 blocks. It was chosen based on the assumption that an attacker is unlikely to amass more than 10% of the hashrate, and that a negligible risk of less than 0.1% is acceptable.
 
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Both these figures are arbitrary, however;
 
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6 blocks are overkill for casual attackers, and at the same time powerless against more dedicated attackers with much more than 10% hashrate (see: [https://bitcoil.co.il/Doublespend.pdf Analysis of hashrate-based double-spending]).
 
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Users and cryptocurrency exchanges that accept bitcoins as payment set their threshold in the number of required blocks until the payment is confirmed.
 
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To find out how many checks are required to process the transaction and how long to wait for the receipt of funds, it is necessary to understand the features of cryptocurrency transfers. This process consists of several stages:
 
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* addressee sends money;
 
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* information about transactions is made in special blocks, each of which has a room and a hash (special data);
 
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* the blocks are sent for scanning to different computers;
 
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* if everything is done correctly, the received information replenishes various databases;
 
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* checked blocks complete the chain;
 
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* the money goes to the recipient.
 
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Note that
 
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* Unconfirmed transactions do not expire.
 
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* Freshly-mined coins cannot be spent for 100 blocks.
 
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* It is advisable to wait some additional time for a better chance that the transaction will be propagated by all nodes.
 
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==Confirmations in commerce==
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Transaction confirmations are a means for receivers to gain assurance that the information they have received is valid, [[immutable]], and backed by the proof of work on the network. For most applications, including small to medium value commerce, confirmations are not required, however many businesses including cryptocurrency exchanges will make users wait for up to 6 confirmations before accepting funds for trade. Importantly, it is up to the user to set their own comfort threshold for doing business.
  
 
=See Also=
 
=See Also=

Latest revision as of 02:14, 22 April 2022

Bitcoin transaction confirmation is the process of finalising a transaction - with an economically expensive attestation - by the Mining network that the transaction is valid, and does not conflict with any previously seen transactions. One of the key functions of Bitcoin, is that it solves the problem of double-spending by establishing the order in which conflicting transactions have been publicly broadcast on the network. [1], i.e. the risk that a digital currency token may be copied and spent more than once. In spite of having no central authority to verify that its tokens are not being duplicated, Bitcoin successfully avoids double-spending through a system of distributed transaction confirmation, based on the consensus of a network of validators. Bitcoin SV transaction confirmation time cannot be precisely predicted. However, once a transaction has been relayed around the network it has a high probability of being included in the next mined block if the including transaction fee is sufficient to satisfy most Miners.

How Bitcoin transactions are confirmed

A transaction is the exchange of information between parties. That information can be a quantity of [[Satoshis}, tokens or data of some other kind. Confirmation occurs when that transaction is included in a block that is added to the Bitcoin Blockchain. When a user wishes to have a transaction confirmed, the complete transaction is broadcast from their wallet to Miners in the network who verify that it is valid. Once validated, Miners will decide whether or not to include this transaction in their block template and attempt to mine it. When a Miner discovers a block that includes the transaction, it is considered confirmed. Each time a new block is added to the chain, the transaction is said to be confirmed again with the number of confirmations, being the number of blocks added to the ledger that build upon the block containing the transaction. This generally considered to be a measure of how difficult it would be for a dishonest Miner to invalidate the transaction by mining a longer competing chain containing a double-spend.

Bitcoin SV confirmation time

Typically, a transaction that is sent to the network with fees that adhere to the acceptance rate of X% of the network's hash rate, will have X% chance of being mined in the next block.

For example, if it is known that 20% of nodes will accept transactions at a given fee rate, the user can assume that there is a 20% chance of it being included in the next block, or conversely that it is likely to be mined in 1 of the next 5 blocks, or within a 50 minute timeframe. For users whose transactions are less time critical, this is a mechanism to reduce transaction fees, especially in high volume applications.

Confirmations in commerce

Transaction confirmations are a means for receivers to gain assurance that the information they have received is valid, immutable, and backed by the proof of work on the network. For most applications, including small to medium value commerce, confirmations are not required, however many businesses including cryptocurrency exchanges will make users wait for up to 6 confirmations before accepting funds for trade. Importantly, it is up to the user to set their own comfort threshold for doing business.

See Also

References

[1] Nakamoto, Satoshi. "Bitcoin: A Peer-to-Peer Electronic Cash System."

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