Post
Topic
Board Beginners & Help
Re: Why some platforms need X confirmations?
by
ranochigo
on 28/11/2015, 01:17:19 UTC
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.
Unless there is 1 (or more confirmations) there is a risk of 'double spending' of bitcoin.

Even with 0 confirmations the risks of double spend are insanely overblown. Unless you are paying a lot for something really important, then chances are you can be perfectly ok with 0 confirmations and sleep better at night, certainly better than credit card transactions.
For daily transaction, the merchant is more likely to pay more in fees or accept a fraudent note compared to the amount of double spends that can happen. If the merchant takes precaution, it's hard for anyone to double spend unless a mining pool cooperates with attacker which is quite expensive and it isn't guaranteed unless it owns majority of network. The only problem I can see is in a spam attack, if the user does not pay sufficient fee, it can take sometime.

The worst case scenario is if pools accept RBF patch. If it does happen, users can simply use another transaction with higher fee and relay to the pool to replace the existing transaction. Won't succeed 100% of the time and the reference client don't even relay double spends.