There has been a great deal of discussion in the Bitcoin Cash (BCH) community recently over retail and the increase of zero-confirmation BCH transactions. More merchants are now warming up to the idea, making for what will ultimately be a wider acceptance of the digital currency by merchants around the world which, in turn, could lead to greater acceptance as the currency solution BCH is meant to be.
Currently, almost all transactions have to be confirmed six times for the transaction to be considered “valid.” While the number six is not a rule, it has served as a guideline since crypto first started spreading, and is used to help prevent double spending. Zero-confirmation transactions, like the name implies, allows for a transaction to be instantaneously accepted. While it is broadcast to all players on the network, it is accepted without having been recorded on the blockchain.
Zero-confirmation transactions were discussed by Satoshi Nakamoto himself in 2010. On Bitcointalk.org, he said in a discussion called ‘Bitcoin Snack Machine,’ “I believe it’ll be possible for a payment processing company to provide as a service the rapid distribution of transactions with good-enough checking in something like 10 seconds or less. The network nodes only accept the first version of a transaction they receive to incorporate into the block they’re trying to generate.”
While merchant acceptance of zero-confirmation transactions isn’t new—eCommerce sites such as Keys4coins, Bitpay, Cryptonize.it and Mini-POS have been accepting them for some time—more retailers are getting onboard. This is due, in part, to an increase in the development of the transactions. Mike Hearn, a developer for Bitcoin, discussed a solution for double spending in 2015, but the idea was scrapped at the time.
The previous ideas have been embraced and improved to be offered on the BCH platform. There are currently two development proposals being considered to boost zero-confirmation transactions even more. OpenBazaar developer Chris Pacia wrote a proposal entitled, “Double Spend Alerts,” which would deliver an alert to nodes on the network every time a double spend occurs on an unconfirmed transaction. Pacia realizes that the solution is not fool-proof, and that more work needs to be done.
Another project, being developed by the Bitcoin Unlimited team, is called “Double Spend Proof Creation and Forwarding.” According to the proposal, “By receiving double spend proofs sellers learn about attempts to defraud them faster and can take appropriate steps—This will make a 0-conf transaction on Bitcoin Cash more safe and will give it broader acceptance.”
The developers also indicate that “The goal of the implementation is that any node that has access to both transactions can create the proof—And that any other node (even with none of those transactions in the mempool) can validate and forward it.”
BCH continues to improve and provide real-world solutions for it to operate as a legitimate currency. More and more retailers are opening their eyes and realizing that the risk associated with zero-confirmation transactions is extremely low and easy to counter. Compared to credit card fraud, which costs merchants in the U.S. alone $190 billion annually, BCH is without a doubt the safe solution.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.