When Can You Trust Bitcoin? Value-Dependent Block Confirmation to Determine Transaction Finalit
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866911276553207808 |
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| author | Hicks, Ethan Oglio, Joseph Nesterenko, Mikhail Sharma, Gokarna |
| author_facet | Hicks, Ethan Oglio, Joseph Nesterenko, Mikhail Sharma, Gokarna |
| contents | We study financial transaction confirmation finality in Bitcoin as a function of transaction amount and user risk tolerance. A transaction is recorded in a block on a blockchain. However, a transaction may be revoked due to a fork in the blockchain, the odds of which decrease over time but never reach zero. Therefore, a transaction is considered confirmed if its block is sufficiently deep in the blockchain. This depth is usually set empirically at some fixed number such as six blocks. We analyze forks under varying network delays in simulation and actual Bitcoin data. Based on this analysis, we establish a relationship between block depth and the probability of confirmation revocation due to a fork. We use prospect theory to relate transaction confirmation probability to transaction amount and user risk tolerance. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2511_15421 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | When Can You Trust Bitcoin? Value-Dependent Block Confirmation to Determine Transaction Finalit Hicks, Ethan Oglio, Joseph Nesterenko, Mikhail Sharma, Gokarna Distributed, Parallel, and Cluster Computing Cryptography and Security We study financial transaction confirmation finality in Bitcoin as a function of transaction amount and user risk tolerance. A transaction is recorded in a block on a blockchain. However, a transaction may be revoked due to a fork in the blockchain, the odds of which decrease over time but never reach zero. Therefore, a transaction is considered confirmed if its block is sufficiently deep in the blockchain. This depth is usually set empirically at some fixed number such as six blocks. We analyze forks under varying network delays in simulation and actual Bitcoin data. Based on this analysis, we establish a relationship between block depth and the probability of confirmation revocation due to a fork. We use prospect theory to relate transaction confirmation probability to transaction amount and user risk tolerance. |
| title | When Can You Trust Bitcoin? Value-Dependent Block Confirmation to Determine Transaction Finalit |
| topic | Distributed, Parallel, and Cluster Computing Cryptography and Security |
| url | https://arxiv.org/abs/2511.15421 |