What is Bitcoin confirmation and does it work?
Bitcoin processing can take a long time, up to one to two weeks depending on your Bitcoin wallet. It is therefore important to ask what confirmation means and when you should expect your transaction to be confirmed by the Bitcoin network. The term “confirmation” refers to the number of blocks deep that a transaction has passed through the Blockchain before it can be considered irreversible. Each block added to the Blockchain contains a certain number of transactions, and each transaction must be validated by the network before it can be considered irreversible. To validate funds, computers on the Bitcoin network must calculate a cryptographic hash function for all of these transactions. The output of this cryptographic hash is then used to confirm that all inputs are in order and that the transaction has not been tampered with. The more confirmations a transaction has, the more secure your funds are.
When your transaction is first included in a block, it may go through multiple confirmations quickly. However, if the transaction is subsequently modified in any way, the modification will be leveraged by future blocks. A transaction can reject an alternate block and become permanently invalid. As such, it is important to rely on your Bitcoin wallet to tell you when your transaction is considered irreversible and unchangeable.
How long does a Bitcoin transaction take?
Bitcoin transactions can take a long time to be confirmed. Confirmation times may vary and are dependent on network hashing power, network latency and other factors. In order to understand the delay, you need to measure the time between when your transaction is included in a block and when it is considered irreversible. The first confirmation takes place when the last of your entries has been validated by the network and your wallet has received a notification that your transaction is ready to be included in a block. A few blocks may pass before this first confirmation occurs. It is therefore important to note the number of confirmations of an entry without checking the status of your transactions. The more confirmations your transaction has, the safer your funds are. If you want to know more about bitcoin and its use, Click here.
How does a transaction enter the blockchain?
Bitcoin transactions are subject to a strict set of rules and regulations. Their legitimacy depends on compliance with these rules and regulations. When a transaction is first broadcast by the payer’s wallet, it must include all entries that the payer intends to use to make a payment. Inputs must also be properly confirmed before they can be used in an outgoing transaction. In this way, inputs are locked by their relationship to previous outputs and cannot be spent twice without invalidating the entire transaction.
The problem with proof of work:
Bitcoin uses the Proof of Work (PoW) consensus algorithm, which is an incentive approach to validating transactions. PoW algorithms encourage users to compete against each other in order to solve a mathematical puzzle required for validation. In return for successfully solving the puzzle and adding a new block to the Blockchain, Bitcoin miners receive transaction fees and a set number of newly generated Bitcoins. This process is called Bitcoin mining.
The problem with proof of stake:
Proof of Stake (PoS) is a consensus algorithm that allows validators to earn rewards for placing their trust in validators who have already earned said rewards. Currently, only two consensus algorithms compete on the Bitcoin network and both are based on PoW: PoW and PoS. These two algorithms are incompatible due to the incentives provided to users by each system. Bitcoin miners need large amounts of resources to successfully compete with other users.
How to check if Bitcoin transaction is verified?
A user can check the “Confirmation” status of a transaction by going to their Bitcoin wallet and checking the number of confirmations. Bitcoin transactions have a fixed confirmation number, which is one less than your blockchain block size. It is calculated by taking the mathematical hash that came out of your transaction. This hashed data will appear next to your address in any blockchain explorer. If your hashed data output is less than the block size, you have an unconfirmed transaction and you should wait until your transaction has at least one confirmation before attempting a withdrawal from your wallet.
Some wallets may also display a “double spend” error message. This message alerts you that there is an unconfirmed inbound transaction with the same entries as your outbound transaction. If you see this error, it means someone else submitted another transaction with the same entries before you.
Bitcoin transactions are not instantaneous and can take a long time to process. The longer you expect your transaction to take, the more confirmations you have to wait before completing your withdrawal. Most bitcoin wallets will tell you how many confirmations are needed before an incoming transaction is considered secure. The safest way to withdraw funds is to wait until your transaction has received a number of confirmations to ensure it cannot be changed.