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Glossary

Confirmation

November 21, 2023 - Around 3 mins mins to read

Confirmation is a crucial concept in the world of blockchain technology. It refers to the process of validating and securing transactions on a blockchain network. In simple terms, confirmation provides proof that a transaction has been added to the blockchain and is considered final and irrevocable.

When a transaction is initiated on a blockchain, it is initially considered unconfirmed. It means that the transaction has been broadcasted to the network, but it has not yet been added to a block and validated by miners. The transaction’s confirmation status changes as miners include it in new blocks and verify its validity.

Each block added to the blockchain represents one confirmation for the transaction. As more blocks are added, the level of security and immutability of the transaction increases. This is because altering a transaction that has several confirmations would require tampering with multiple blocks, which is computationally infeasible and economically unviable.

Confirmation is particularly important for larger transactions and higher-value assets. It provides confidence and assurance to participants that the transaction is legitimate and has a minimal risk of being reversed or invalidated. For smaller transactions, such as purchasing a cup of coffee with cryptocurrency, zero or a few confirmations may be acceptable due to the lower financial risk involved.

The required number of confirmations for a transaction can vary depending on the blockchain network and the specific use case. Bitcoin, the most well-known blockchain, typically considers three confirmations as a reasonable compromise for smaller transactions, while six confirmations are recommended for larger ones. However, these recommendations may change over time as the network’s security requirements evolve.

It’s important to note that the time needed for confirmations depends on the specific blockchain’s protocol. In the case of Bitcoin, a new block is added to the blockchain approximately every 10 minutes. Therefore, it takes around 10 minutes to obtain one confirmation for a transaction. As more blocks are added, the transaction accumulates additional confirmations, increasing its security level.

For example, let’s say Alice sends one Bitcoin to Bob. Once Alice initiates the transaction, it becomes unconfirmed. After the first 10 minutes, assuming the transaction is included in the next block, it receives one confirmation. If another 10 minutes pass and two additional blocks are added, the transaction would have three confirmations. This process continues as more blocks are mined and added to the blockchain.

The number of confirmations required can also vary depending on the specific use case and the level of risk involved. For example, some cryptocurrency exchanges may require a certain number of confirmations before crediting a user’s account with deposited funds. This additional waiting time ensures a higher level of confidence in the transaction’s validity and reduces the risk of potential double-spending attacks.

It’s worth mentioning that the confirmation process is not limited to transaction validation. In some blockchain networks, such as Ethereum, confirmations are also used to validate smart contract execution and state changes. These confirmations ensure that the executed code is correct and that the desired outcome has been achieved.

Overall, confirmation is a crucial aspect of the blockchain ecosystem that provides security, immutability, and trust in the validity of transactions. It ensures that participants can rely on the blockchain’s decentralized nature and the consensus mechanism employed to validate and secure transactions.

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Coincu

Glossary

Confirmation

Confirmation is a crucial concept in the world of blockchain technology. It refers to the process of validating and securing transactions on a blockchain network. In simple terms, confirmation provides proof that a transaction has been added to the blockchain and is considered final and irrevocable.

When a transaction is initiated on a blockchain, it is initially considered unconfirmed. It means that the transaction has been broadcasted to the network, but it has not yet been added to a block and validated by miners. The transaction’s confirmation status changes as miners include it in new blocks and verify its validity.

Each block added to the blockchain represents one confirmation for the transaction. As more blocks are added, the level of security and immutability of the transaction increases. This is because altering a transaction that has several confirmations would require tampering with multiple blocks, which is computationally infeasible and economically unviable.

Confirmation is particularly important for larger transactions and higher-value assets. It provides confidence and assurance to participants that the transaction is legitimate and has a minimal risk of being reversed or invalidated. For smaller transactions, such as purchasing a cup of coffee with cryptocurrency, zero or a few confirmations may be acceptable due to the lower financial risk involved.

The required number of confirmations for a transaction can vary depending on the blockchain network and the specific use case. Bitcoin, the most well-known blockchain, typically considers three confirmations as a reasonable compromise for smaller transactions, while six confirmations are recommended for larger ones. However, these recommendations may change over time as the network’s security requirements evolve.

It’s important to note that the time needed for confirmations depends on the specific blockchain’s protocol. In the case of Bitcoin, a new block is added to the blockchain approximately every 10 minutes. Therefore, it takes around 10 minutes to obtain one confirmation for a transaction. As more blocks are added, the transaction accumulates additional confirmations, increasing its security level.

For example, let’s say Alice sends one Bitcoin to Bob. Once Alice initiates the transaction, it becomes unconfirmed. After the first 10 minutes, assuming the transaction is included in the next block, it receives one confirmation. If another 10 minutes pass and two additional blocks are added, the transaction would have three confirmations. This process continues as more blocks are mined and added to the blockchain.

The number of confirmations required can also vary depending on the specific use case and the level of risk involved. For example, some cryptocurrency exchanges may require a certain number of confirmations before crediting a user’s account with deposited funds. This additional waiting time ensures a higher level of confidence in the transaction’s validity and reduces the risk of potential double-spending attacks.

It’s worth mentioning that the confirmation process is not limited to transaction validation. In some blockchain networks, such as Ethereum, confirmations are also used to validate smart contract execution and state changes. These confirmations ensure that the executed code is correct and that the desired outcome has been achieved.

Overall, confirmation is a crucial aspect of the blockchain ecosystem that provides security, immutability, and trust in the validity of transactions. It ensures that participants can rely on the blockchain’s decentralized nature and the consensus mechanism employed to validate and secure transactions.

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