Seattle startup CoinSafe posted an update on the company’s blog Friday that, admittedly, we’ve been sleeping on, but it contained potentially big news: CoinSafe has developed a system for confirming Bitcoin transactions within 10 seconds.
Normally, a transaction can take a few minutes — even a half hour — for sufficient confirmations on the network. To solve that problem, CoinSafe said it had developed a predictive tool on BlockCypher that can know within 10 seconds whether a transaction will be confirmed.
The company is even putting up a money-backed guarantee for its service. Any transactions predicted as successful that don’t get confirmed will be refunded by CoinSafe up to the equivalent of US$1,000.
“We've yet to have a single transaction fail, and we're so confident that we stand behind 100% of our predictions,” the company’s blog post reads.
How It Works
CoinSafe started with the premises that a single confirmation is sufficient for a transaction because the risk of a double-spend attack is negligible. The company was inspired, the blog post said, by this paper published by ETH Zurich students in which they set up a vending machine with a similarly fast transaction-speed prediction tool.
CoinSafe co-founder Michael Flaxman spoke to TechCrunch on Monday about the new service.
“When a transaction is broadcast, we detect that right away,” Flaxman told TechCrunch.
“Then, we start looking for our transaction in the memory pools of these nodes. If the transaction propagates across the network and no competing (double-spend) transactions are found on any nodes, then we can predict the odds it will eventually make it into a block.
“In about 10 seconds, we’re able to make this prediction, and then the app tells the store to release the cash to the customer. We’re now financially guaranteeing that the transaction will confirm as expected, so both parties don’t have to worry about it anymore.”
CoinSafe will be using this predictive feature for their own service, which we reported on in July.
The company’s idea is to turn people’s phones into Bitcoin ATMs, and they’re mostly targeting brick-and-mortar merchants by framing the service as an additional revenue stream.
“Stores set their own prices and then like BitPay, our software gives the customer 15 minutes to buy Bitcoin at that price — they have to pay cash to the cashier and optionally enter their info for a receipt,” Flaxman posted on Reddit shortly after CoinSafe launched.
“When a customer sells their Bitcoin to a store for cash, the price is locked in as soon as the valid transaction is broadcast, while the cashier is instructed to hold onto the cash until the BTC transaction is confirmed.”
Did you enjoy this article? You may also be interested in reading these ones:
Download our sleek and user-friendly free iOS app so you never miss the latest stories!
Follow us on Facebook