Bitcoin transactions aren’t actually instant. Because each transfer requires a number of confirmations via the mining process, some Bitcoin moves can take minutes or even half an hour. CoinSafe, however, may have created a solution that can process BTC transactions in seconds.
CoinSafe, a company founded by Michael Flaxman and Tom Chokel, is a “free Bitcoin ATM service.” It allows almost anyone with smartphone to become an BTM (you become the cash dispenser, in this case). There are about 300 stores signed up now and you can go in and buy and sell bitcoin via an app.
You can go to CoinSafe.com and have a free BTM up and running in minutes,” said Flaxman. “Your employees don’t have to understand bitcoin in order to buy or sell it.”
However, even with their BTM, bitcoin transactions took half and hour. To prevent this, they began using blockcypher.com to monitor hundreds of nodes AKA mining machines. Then it gets a little complex:
“When a transaction is broadcast, we detect that right away,” said Flaxman. “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.”
Flaxen explained that most transactions are somewhere in between being confirmed.
“By design it takes an average of 10 minutes for each block to be mined, and each of these blocks adds more certainty that the transaction will eventually be confirmed. The statistical odds of a transaction being double-spent after receiving 6 confirmations on the bitcoin blockchain are astronomically low,” he said.
In short, the technology reduces the speed of transactions from 10 minutes to about 10 seconds. It’s very specific to CoinSafe’s system and doesn’t apply to many other bitcoin systems. However, it does make CoinSafe a little more interesting as an ATM provider.
IMAGE BY Jason Benjamin UNDER Public Domain LICENSE (IMAGE HAS BEEN MODIFIED)
CoinSafe, a company founded by Michael Flaxman and Tom Chokel, is a “free Bitcoin ATM service.” It allows almost anyone with smartphone to become an BTM (you become the cash dispenser, in […]