Merchants have been embracing Bitcoin in recent years, and at the end of 2014, there were 100,000 places in the online and offline world where you could pay with Bitcoin directly. But there is still one issue that plagues merchants who accept – or are planning to accept – Bitcoin payments, and that is the delay in confirmation times. Instant Approval may be the solution merchants have been waiting for for quite some time.
The Bitcoin Network – One Confirmation Roughly Every 10 Minutes
One of the downsides to the Bitcoin network is the fact it takes six confirmations before a transaction has been fully confirmed and verified by the network. In recent times, however, more and more companies have been looking at ways to reduce the numbers of configurations needed in order to process a deposit or payment.
However, lowering the required number of Bitcoin confirmations is a risky strategy. Just last week, an issue occurred on the Bitcoin network which could lead to transactions going unconfirmed for longer times, or certain transactions receiving invalid confirmations. Granted, the latter was only true in less than a handful of cases, but from a merchant perspective, issues like these could pose a serious threat.
Most of these issues have been resolved however, even though there is still an advisory warning asking people to wait for a total of 30 confirmations before spending incoming transactions. And with a new block appearing on the network roughly every 10 minutes, 300 confirmations translates to a 5-hour waiting period.
It goes without saying that merchants who are accepting Bitcoin payments are not too happy with this situation. Even though Bitcoin transactions are designed to be lightning fast and cheaper due to non-existent transaction fees for the recipient, this scenario couldn’t come at a worse time. But have no fear, as Bitcoin payment processor Bitnet has come up with a potential solution.
Bitnet BlockCypher Launch Instant Approval Feature
Creating a way to “approve” a Bitcoin transaction faster could have tremendous benefits to the Bitcoin community in general. The new Instant Approval feature developed by Bitnet and BlockCypher will “look” at a Bitcoin transactions and determine its validity – probability it will either be accepted by the network or not – within the span of 10 seconds.
Assuming the transaction is indeed legitimate, the merchant will be notified instantly regarding the successful payment. If the Instant Approval feature would be successful, merchants will no longer have to wait anywhere from 10 minutes up to a few hours until a Bitcoin transactions is properly confirmed and executed.
The transaction data will be provided by BlockCypher, a blockchain web services company. This new Instant Approval feature will rely on various data points, including BlockCypher’s own double-spend detection and transaction propagation metrics. All in all, merchants will be facing a reduced risk when accepting Bitcoin payments for goods and services.
“One of the biggest challenges for merchants wanting to accept bitcoin is how to accommodate the delayed confirmation times into their ‘real-time’ checkout flows and still be assured of being funded. We partnered with BlockCypher to provide key data for our Instant Approval service due to their best-in-class metrics and enterprise service”.– Bitnet’s VP Product Seamus Cushley told the media.
Source: Press Release via Email
Images courtesy of Bitnet, BlockCypher, Shutterstock