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249 sats \ 1 reply \ @nullcount 4h \ on: Why isn't one confirmation enough for a bitcoin transaction? bitcoin_beginners
Re-read page 6-8 of the white paper. Satoshi explains his reasoning and calculations.
In his examples, he estimated that IF the largest miner has 10% of hashrate, people should require 5-confs to reduce the probability that their transaction gets reorged to less than to 0.1%
A reorg happens when a miner is able to "undo" a block and replace it with multiple blocks which don't include your txn.
Foundry Pool regularly mines 6 blocks in a row. Foundry has approx 30% of hashrate today.
If Foundry wanted to be malicious, they clearly have enough hashrate to routinely reorg the chain.
So if we account for REALITY, satoshi would recommend requiring 24 block confirmations to reduce the probability of reorg to 0.1%.
Here's a list of orphaned blocks: https://bitcoinchain.com/block_explorer/orphaned
If you think mining pools are too centralized, you should require more confirmations for your txns, when possible.
If you operate a LN node, you can set the min required blocks before a channel becomes active, for example.
If you operate an economic node (like a bank or business) you can require more confs before delivering the merchandise or crediting the customer's account.
Unfortunately, you cannot easily require more confirmations as a user requesting withdrawals from an exchange. Maybe your widthdrawl is included in a block that immediately gets reorged or orphaned. Your widthdrawl tx is no longer included in any block nor the mempools at this point. Your only recourse is to plea to the exchange and hope that they recognize the validity of the reorg and re-issue the widthdrawl tx in your favor.
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