In a recent study of European mathematics Cyril Grunspan and Ricardo Perez-Marco with the help of mathematical analysis and game theory showed that due to the high level of network security and relatively high price of bitcoin small transactions don’t need six confirmations, which are now required by some exchanges, cryptocurrency services or participants of the OTC market.
The habit of waiting for six confirmations inherited directly from Nakamoto — the classic bitcoin client will show a transaction as “unconfirmed” until there are six confirmations (6 blocks found). This figure was not chosen by chance: it is based on the theory that the probability that an attacker will be able to seize more than 10% Hasrat network is extremely low and negligible risk (less than 0.1%) is acceptable. However, the calculations of mathematicians show that every member of the network may, at its discretion, to lower the threshold to two or three confirmations.
“Our new article combines two previous studies,” said Perez-Marco in the comments for Bitcoin Magazine. “The first is the accurate calculation of the probability of success of the attack is double spending and the second considers the profitability of the strategies of selfish mining”. A new study raises the question: “How profitable is double spending and how many network confirmations are enough honest mining?”
According to the results presented, the potential attacker, which owns 1% of the total Hasrat will have to spend at least 50 coinbase transactions (currently 625 and 312,5 BTC BTC after reducing the rewards for mining in 2020) to cancel one confirmation. To undo two confirmations, the attacker needs 1666 coinbase transactions.
“We compared the profitability of double spending and fair of mining,” explained Perez-Marco. “Any large miner with high hasraton not interested in spending double minor… Only a large sum could justify double-spending from the point of view of profitability. For example, when herate 1% and only 1 confirmation minimum waste is more than 49 coinbase transactions — today is 612 BTC”.
After taking into account several scenarios of mathematics came to the conclusion that after two confirmations on the network is an honest mining is more profitable than a double waste. This conclusion game theory is applicable even in cases when the transaction cost is equal to the coinbase transactions.
“Six confirmations is not a Protocol rule and the requirement of the recipient of the transaction”, concluded Perez-Marco. “Satoshi had a good rating, but he had no theory of profitability”.
However, it seems unlikely that conservative exchanges and cryptocurrency companies will lower the threshold of evidence for the convenience of users, and that mathematical research has not received much attention from the community.
If and when it is accepted by a wide community, it may happen that the majority will agree to consider the transaction final after one or two confirmations. However, this change may also attract the attention of economically irrational players who don’t mind to burn a portion of their profits just in order to ruin the credibility of bitcoin.