What are Bitcoin Transaction Confirmations?

To start a transaction on the bitcoin network, a person needs to have an address of a recipient. Every bitcoin wallet can have an infinite number of addresses and it is recommended that members of the bitcoin network use one address per transaction.

Once a sender initiates a transaction by sending money to an address, miners need to validate the transaction. The information about all transactions that have occurred on the bitcoin network since its inception in 2009 is public and transparent.

Every block of the blockchain contains information about previous transactions. Blocks are tied together in such a way that changing information even about one transaction is impossible. This allows miners to verify the availability of funds for a transaction. Once a transaction is broadcasted to the network, every block will provide one confirmation for the transaction, assuming that blocks deem the transaction as valid. For a transaction to obtain a status of “spendable,” it needs to accumulate at least six network confirmations. Thus, a transaction confirmation on the bitcoin network means that the network has the network has accepted the transaction as valid. When a transaction doesn’t have enough confirmations, it is considered to be “between users” and until it receives the necessary number of confirmations from the network, it is a security risk for both the sender and the receiver.

When a wallet owner sends out funds, most wallets will show the status of a transaction as “spent” even before the transaction receives necessary confirmations from the network. Some wallets will show the status as “n/unconfirmed,” where n stands for the number of confirmations that the transaction has received. In most cases, reaching six confirmations takes about an hour, though exceptions are possible.

There is no way for the sender of the funds to force the number of confirmations to appear faster because the process depends on the network, which is completely decentralized. This means that there is no central hub that processes transactions. Bitcoin nodes and miners are located all over the world and there is no central authority that governs them or has any control as to when nodes and miners go online and offline. You can see real-time map of full nodes that are currently online here: https://bitnodes.earn.com/

 

One of the goals of the bitcoin network is to generate one new block every ten minutes, which is why there is also no way to influence the speed at which the network issues confirmations. There is just one factor that has an impact on how quickly you will receive the first confirmation. This factor has to do with when you broadcast the transaction in relation to the formation of the current block. If you do that right before the blockchain creates a new block, your first confirmation may happen very quickly because the transaction will be one of the last transactions added to the current block. If, however, the transaction is one of the first transactions of the new block, then even the first confirmation may take some time.

You can see the speed at which the blockchain is creating new blocks here: https://blockchain.info/

For example, block #494422 has a timestamp of 2017-11-15 04:48:20 (you can see the information here: https://blockchain.info/block/000000000000000000aada1c759c6f5893d4a8cba333d855aeff32479a27a8cc) while block #494421 has a time stamp of 2017-11-15 04:45:10 (see https://blockchain.info/block/0000000000000000007d903adb2cdc170bd6a4da0f75351e5447c2e4a9d22fa7 ). This means that in this very case it took the blockchain about 3 minutes to add a new block to the network.

The general rule about bitcoin transactions is that a transaction that doesn’t yet have required six confirmations is a risk for double-spending, meaning that the sender can try and send the funds to several recipients.

At the same time, every merchant and payment processor on the bitcoin network is free to set their own number of required confirmations. The rule doesn’t apply to desktop software users because the funds will remain “unconfirmed” until the network obtains the required six confirmations, but mobile users can choose a wallet that will allow them to spend incoming bitcoins much faster compared to desktop wallets.

The confirmation of a transaction by six blocks doesn’t make the transaction valid for the protocol of the network. The protocol requires a total of 100 confirmations. Many of the bitcoin mining pools only credit block rewards to miners after obtaining 120 confirmations from the network.

Recently, there has been a trend among merchants to mark payments in bitcoin as accepted without waiting for six confirmations. Typically, this trend occurs in offline venues such as bars and restaurants that are protected by their bitcoin payment processor should a double-spend scenario occur. Many of the payment processors, such as BitPay and BitKassa, provide merchants with protection against double-spending even when merchants choose to accept unconfirmed transactions.

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