Bitcoin wallet and blockchain security provider, BitGo Inc. has announced the launch of BitGo Instant, a method of safely receiving zero-confirm Bitcoin transactions with a full financial guarantee. Companies which have already announced that they will be involved include: Bitfinex, Bitstamp, Kraken, CoinHako, FoldApp, Genesis Trading, Shapeshift, Korbit, Unocoin, and SFOX.
Standard bitcoin transactions currently take about ten minutes to receive confirmation. Bitcoin transactions which have not yet been included in a block are known as “zero-confirm” transactions. Recently the danger of accepting zero-confirm transactions has been highlighted by Peter Todd, who demonstrated the possibility for the sender to spend the money elsewhere before the transaction is confirmed (double-spending). Some companies have been accepting zero-confirm transactions for small transactions however many bitcoin businesses require multiple confirmations to credit a customer’s account; however, this has previously led to waiting times of anything up to several hours (although this is still miles ahead of the three day wait that traditional methods suffer).
Nejc Kodrič, CEO of Bitstamp, said: “BitGo Instant is an elegant solution that lets users send bitcoin quickly and easily. Many Bitcoin businesses would love to be able to accept zero-confirm transactions, but it’s been too risky to consider until now. We’re excited to be supporting this much-needed innovation from day one.”
Increasing the speed of transaction verification and allowing zero-confirmation transactions will create huge savings for users of the system. Partners have agreed to give customers using a BitGo Instant transaction immediate credit, giving the customer the ability to trade almost instantly. BitGo Instant means traders no longer have to pre-position bitcoin funds at exchanges they intend to trade on, since funds held in any Instant-capable BitGo wallet can be moved in seconds to the most beneficial exchange.
CEO of Kraken, Jesse Powell commented: “We look forward to working with BitGo and BitGo Instant partners to provide our clients with instant bitcoin settlement. Cross-exchange spreads will likely come down, improving the efficiency of bitcoin markets around the globe. Moreover, merchants or merchant processors who join the network will be able to instantly convert bitcoin they collect from customers, eliminating bitcoin price risk.”
By co-signing a BitGo Instant transaction, BitGo issues a cryptographically signed guarantee on the transaction. The recipient of a BitGo Instant transaction has the benefit of full compensation by BitGo if the transaction is not eventually confirmed by the blockchain.
Erik Voorhees, CEO of Shapeshift, noted: “Instant deposits to ShapeShift adds significantly to our user experience. BitGo Instant enables this without risk to ShapeShift or the user. I expect other wallets to follow their lead.”
BitGo Instant is fully open-access. Anyone using a BitGo Instant-capable wallet may send BitGo Instant transactions. Any business, whether using a BitGo wallet or not, may use BitGo’s API to receive BitGo Instant transactions.