Post
Topic
Board Bitcoin Discussion
Merits 3 from 2 users
Re: Myth vs Facts and My Assumptions about Bitcoin
by
o_e_l_e_o
on 24/01/2022, 08:03:06 UTC
⭐ Merited by BlackHatCoiner (2) ,Falconer (1)
But I've also heard that 1 confirmation is not completely safe but it will be safer if the transaction has reached 4-5 confirmations. I forgot how confirmation was declared unsafe, maybe you still remember about that? I remember about the 51% attack, can they cancel a transaction that already has 1 confirmation?
If a single entity controls 51% of the hashrate (which is very unlikely), and can sustain that hashrate indefinitely (which is even more unlikely), then they can theoretically reverse a transaction with any number of confirmations. They would simply mine their own chain in secret which double spends the transaction they want to reverse, and then when their own chain is longer than the main chain they release it to the wider network. All the other nodes would now switch to this chain since it has more work, and consensus rules state the chain with the most work is the main chain. The cost of such an attack is astronomical though, and becomes larger and larger with every additional confirmation the attack needs to overturn. No one is going to use such an attack to reverse a transaction of $1000, $10,000, or even $100,000, because it would be more profitable for them to simply mine honestly and collect the block rewards. Even if an entity has lower than 51% of the hashrate, though, they can still attempt this attack, and be successful if they get lucky. If they don't get lucky, though, then again they lose a huge amount of money by funding such an unsuccessful attack.

There's also a very unlikely scenario which could happen by chance, when two honest miners find a block at the same time, and there are competing blocks at the same height. The split will be resolved when one of the two blocks has another block found on top it, becoming the longest chain, which would eject the competing block from the mempool. If your transaction was in this competing block but not in either of the two blocks on the main chain, your transaction would go from 1 to 0 confirmations, but would almost certainly just be picked up again in the next handful of blocks to be mined.

There are also a couple of other theoretical attacks which have never been seen in the wild which could result in a transaction with 1 confirmation being ejected from the main chain, but again, these are very costly.

Think of confirmations as a continuum. It's not "x is unsafe, y is safe", but rather "1 is fine, 3 is safe, 6 is super safe", and so on. What the individual numbers are depends on your individual risk model and the size of the transaction in question.