Confirmation - what is it?

Confirmation is confirmation of each transaction in the cryptocurrency network, which is performed according to a specific algorithm.

The use of various funds in digital format requires mandatory verification of payments. In the fiat system, this function is performed through a code in SMS, a unique form in online banking. In the cryptocurrency system, everything happens differently.

Purposes of Confirmation

When applying for a Bitcoin money transfer, the new owner usually cannot immediately use the funds in his wallet. Once a transaction is completed, it must be included in a block. Only after this does it acquire legitimate status. The actual process of adding an operation to a block is called Confirmation. Inclusion in 1 block is equivalent to 1 confirmation. For the transaction to receive the status of the most reliable and safe, you can use these funds; six confirmations are required according to the standard. It is performed by miners who check the correspondence of the amount of money in the account of the user who applied. Confirmation is also necessary to ensure that the same coin is not reused for different purposes.

That is, in simple words, Confirmation is protection against repeated transactions and ensuring an appropriate level of security for the use of Bitcoins by all users of the ecosystem.

The importance of the number of confirmations

Despite generally accepted standards, individual services and sites may vary the number of required confirmations for a transaction to become legitimate. This number was chosen as the norm of 6 confirmations based on the assumption that attackers cannot accumulate more than 10% of the network hash rate to forge a transaction. However, if the scammer’s computing power is high enough, it is theoretically possible to carry out a fake transaction. To do this, it will be necessary to invest several million US dollars in equipment to achieve the required hash rate. That is a futile occupation.

6 Confirmation is a condition for all network users when creating various transactions. However, the conditions for receiving and using rewards are somewhat different for miners. The money will be available to them only after 100 confirmations, which also confirms the validity of the found block.

However, it is essential to understand that the more confirmations are required, the more time is spent verifying the transaction. This is because each new block is created every 10 minutes. That is, about 1 hour is spent on 6 Confirmations of one transaction.

Therefore, when using micro-amounts for mutual settlements, some users may not expect the completion of all 6 Confirmations but, for example, indicate the optimal number of 3 confirmations. On the contrary, if the amount is very significant, the verification requirements will be higher - from 60 to 120 confirmations.