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Is Bitcoin Transactions Reversible?

Once You Use Bitcoin You Can't Go 'back' And That's Its Fatal Flaw

Once You Use Bitcoin You Can't Go 'back' And That's Its Fatal Flaw

Once You Use Bitcoin You Can't Go 'Back' And That's Its Fatal Flaw Once You Use Bitcoin You Can't Go 'Back' And That's Its Fatal Flaw Once You Use Bitcoin You Can't Go 'Back' And That's Its Fatal Flaw Bitcoin is the worlds most popular digital currency not just a form of money, but a way of moving money around and the darling topic du jour of the tech industry right now. [WIRED has its primer on what bitcoin is and how it works here .] >As a security researcher, I admire bitcoin-the-protocol. But I believe bitcoin-the-currency contains a fatal flaw. As a security researcher, I admire bitcoin-the-protocol. Its an incredibly clever piece of cryptographic engineering, especially the proof-of-work as a way of maintaining an indelible history and a signature scheme which, when properly used, can limit the damage that might be done by an adversary with a quantum computer . But I believe bitcoin-the-currency contains a fatal flaw, one that ensures that bitcoin wont ever achieve widespread adoption as a currency. The flaw? That bitcoin transactions are irreversible. That is, they can never be undone: Once committed, there is no oops, no takeback, no control-Z. Combined with bitcoins independence it is a separate currency with a floating exchange rate this flaw is arguably lethal to money systems. >Once committed, there is no 'oops', 'takeback', or 'control-Z'. Bitcoin advocates will argue that both its irreversibility and independence are benefits. That they were explicit design decisions to defy control by governments or banks. But to me these features are flaws, because a tenet of modern finance asserts that anything electronic must be reversible. If bitcoin really is the internet applied to money then it, too, should have a back button. Without an undo/ back button, its onl Continue reading >>

What Is Bitcoin? The Cryptocurrency Explained

What Is Bitcoin? The Cryptocurrency Explained

Bitcoin is back in the headlines after soaring in value. One bitcoin was worth $2,800 on May 25, up from $1,200 at the end of April. In countries that accept it , you can buy groceries and clothes just as you would with the local currency. Only bitcoin is entirely digital; no one is carrying actual bitcoins around in their pocket. Bitcoin is divorced from governments and central banks. It's organized through a network known as a blockchain, which is basically an online ledger that keeps a secure record of each transaction all in one place. Every time anyone buys or sells bitcoin, the swap gets logged. Several hundred of these back-and-forths make up a block. No one controls these blocks, because blockchains are decentralized across every computer that has a bitcoin wallet, which you only get if you buy bitcoins. True to its origins as an open, decentralized currency, bitcoin is meant to be a quicker, cheaper, and more reliable form of payment than money tied to individual countries. In addition, it's the only form of money users can theoretically "mine" themselves, if they (and their computers ) have the ability. But even for those who don't discover using their own high-powered computers, anyone can buy and sell bitcoins , typically through online exchanges like Coinbase or LocalBitcoins . A 2015 survey showed bitcoin users tend to be overwhelmingly white and male, but of varying incomes. The people with the most bitcoins are more likely to be using it for illegal purposes, the survey suggested. Each bitcoin has a complicated ID, known as a hexadecimal code, that is many times more difficult to steal than someone's credit-card information. And since there is a finite number to be accounted for, there is less of a chance bitcoin or fractions of a bitcoin will go missin Continue reading >>

Bitcoin Cash Is Bitcoin

Bitcoin Cash Is Bitcoin

In 2017, internal strife and differing views on Bitcoins fundamental value proposition caused the currency and its community to break off into several distinct groups, each with their own vision of what Bitcoin is and what it is meant to be. This article will explore the different forks of Bitcoin and make the case for why Bitcoin Cash is the coin most aligned with the original system laid out the in the Bitcoin whitepaper . Introduced as a peer-to-peer electronic cash system, Bitcoin experienced explosive, exponential growth during its initial years. Users were drawn by properties of Bitcoin that allowed for cheap money transfers, instant confirmations, worldwide compatibility, round-the-clock operation, and no limitations on minimum or maximum transaction amounts. This electronic form of money quickly became popular with diverse groups of users all around the world. Merchants used Bitcoin to tap into a global marketplace. Migrant workers used it to send money back home for much less than Western Union. Charities and content creators used it as a virtual tip jar, collecting donations big and small from any country on Earth. Certain industries were even able to use Bitcoin to replace traditional payment methods altogether. This rapid rate of expansion continued for several years and led many to think that Bitcoin was well on its way to becoming an unstoppable revolution in financial technology. But, as the case with all technologies, scalability inevitably became an issue. Since the very beginning of Bitcoin, people have contemplated and argued about how the system should scale, not just to millions of users, but to billionshow else could Bitcoin become accepted as a mainstream global currency? In fact, when Satoshi Nakamoto first introduced the concept of Bitcoin in 2 Continue reading >>

Some Things You Need To Know

Some Things You Need To Know

If you are about to explore Bitcoin, there are a few things you should know. Bitcoin lets you exchange money in a different way than with usual banks. As such, you should take time to inform yourself before using Bitcoin for any serious transaction. Bitcoin should be treated with the same care as your regular wallet, or even more in some cases! Like in real life, your wallet must be secured. Bitcoin makes it possible to transfer value anywhere in a very easy way and it allows you to be in control of your money. Such great features also come with great security concerns. At the same time, Bitcoin can provide very high levels of security if used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your money. Read more about securing your wallet . The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you receive payments with Bitcoin, many service providers can convert them to your local currency. Any transaction issued with Bitcoin cannot be reversed, they can only be refunded by the person receiving the funds. That means you should take care to do business with people and organizations you know and trust, or who have an established reputation. For their part, businesses need to keep control of the payment requests they are displaying to their customers. Bitcoin can detect typos and usually won't let you send money to an invalid address by mistake. Additional services might exist in the future to provide more Continue reading >>

Irreversible Transactions, Combining Reversible And Irreversible Assets, Why Irreversible Transactions Are Arguably Superior - Bitcoin For The Befuddled - Academic Library - Free Online College E Textbooks

Irreversible Transactions, Combining Reversible And Irreversible Assets, Why Irreversible Transactions Are Arguably Superior - Bitcoin For The Befuddled - Academic Library - Free Online College E Textbooks

However, there are some types of financial transactions that are completely irreversible. The most common transaction of this type is a transfer of physical, paper money. If the ATM machine goes crazy one day and spits out $10,000 in cash that you don't actually own and you decide to bury that money in the woods that evening, no legal contract, action by the bank, or action by the government will ever be able to recover that cash; if you decide not to tell them where you buried this money, it is not directly reachable by the legal system. [1] Bitcoins have this same property, which is why people sometimes call it digital cash. If you give somebody bitcoins using a standard Bitcoin transaction, nothing you can do or say can ever reverse that transaction. Such a transaction is enforced using pure mathematics and is not a party to any legal contract, in itself. Combining Reversible and Irreversible Assets Now we can finally understand why it is often a hassle to buy bitcoins. When you buy an irreversible asset using a reversible asset it leads to something call an impedance mismatch: While it is possible to build efficient financial systems that involve reversible transactions (our modern financial system) and those that involve irreversible transactions (as is currently found in the world of cryptocurrencies), it is difficult to exchange assets between these two categories. This is why banks have such strict cash withdrawal limits at ATMs and why it can take several days to buy a bitcoin. In both cases, the institution has no way of reversing the irreversible transaction if something goes wrong and needs to take extra precautions that the reversible half of the transaction has a high probability of completing successfully before agreeing to the transaction, especially if Continue reading >>

Bitcoin Transactions Vs. Credit Card Transactions

Bitcoin Transactions Vs. Credit Card Transactions

Bitcoin Transactions Vs. Credit Card Transactions Satoshi Nakamoto, the inventor of bitcoin , titled hisoriginal white paper on the subject "A Peer-to-Peer Electronic Cash System." This description touches on the core differences between bitcoin and credit card transactions. Bitcoin payments are analogous to a wire transfer or cash transaction, where payment is 'pushed' directly from one party to another, without going through another financial institution . Payment processing is executed through a private network of computers, and each transaction is recorded in a blockchain , which is public. Bitcoin is based on peer-to-peer technology and relies on the blockchain and the cryptography securing it, without any third party oversight. By contrast, credit card transactions entail the buyer effectively authorizing the seller to 'pull' a payment from their account, passing through several financial intermediaries in the process. For example, a typical Visa transaction involves four parties: the merchant, the acquirer (the financial institution that enables payments to the merchant), the issuer (the card holder's bank), and the individual cardholder. When making a bitcoin transaction, it is not necessary to provide personal identification information such as your name and address. Bitcoin transactions are made using an anonymous alphanumeric address that change with every transaction and a private key. Payments can also be made on mobile devices by using quick response (QR) codes. While credits cards are stored physically in a wallet, bitcoin transactions are sent to and from electronic wallets, which can be stored on your computer, smartphone, or in the cloud. Bitcoin transactions are irreversible and can only refunded by the receiving party --a key difference from credit Continue reading >>

Stop Saying Bitcoin Transactions Arent Reversible

Stop Saying Bitcoin Transactions Arent Reversible

Head of global policy and communications at Boom. Stop Saying Bitcoin Transactions Arent Reversible One of the criticisms leveled at Bitcoin by those people determined to hate it is that Bitcoin transactions are irreversible. If I buy goods from an anonymous counterparty online, whats to stop them from taking my bitcoins and simply not sending me the goods? When I buy goods online using Visa or American Express, if the goods never arrive, or if they arent what was advertised, I can complain to the credit card company. The company will do a cursory investigation, and if they find that I was indeed likely ripped off, they will refund me my money. Credit card transactions are reversible, Bitcoin transactions are not. For this service (among others), credit card companies charge merchants a few percentage points on the transaction. The problem with this account is that its not true: Baked into the Bitcoin protocol, there is support for what are known as m-of-n or multisignature transactions, transactions that require some number m out of some higher number n parties to sign off. The simplest variant is a 2-of-3 transaction. Lets say that I want to buy goods online from an anonymous counterparty. I transfer money to an address jointly controlled by me, the counterparty, and a third-party arbitrator (maybe even Amex). If I get the goods, they are acceptable, and I am honest, I sign the money away to the seller. The seller also signs, and since 2 out of 3 of us have signed, he receives his money. If there is a problem with the goods or if I am dishonest, I sign the bitcoins back to myself and appeal to the arbitrator. The arbitrator, like a credit card company, will do an investigation, make a ruling, and either agree to transfer the funds back to me or to the merchant; again Continue reading >>

Reversecoin Worlds First Cryptocurrency With Reversible Transactions

Reversecoin Worlds First Cryptocurrency With Reversible Transactions

Reversecoin Worlds First Cryptocurrency With Reversible Transactions Nuno Menezes December 15, 2014 2:00 pm The world of cryptocurrencies is in a constant development and it never ceases to amaze us; now, a new Project is soon to introduce a new feature that has the potential to shake the cryptocurrency development grounds and to redefine the way we use and protect our coins. Reversecoin is the Worlds first cryptocurrency that allows users to reverse transactions. Reversecoin will give users the chance to reverse transactions within a configurable period of time while granting them full access at any time to their coins by a combination of the best online and offline wallet technology. With Reversecoin , users will be able to create two different kinds of accounts: Standard Accounts and Vault Accounts. Standard accounts behave very much like Bitcoin accounts and allow users to send and receive money for daily purposes. Vault accounts act much like a bank savings account, where users can deposit large amount of coins and keep them safe from hackers. Each vault account has a configurable timeout and is backed by two key pairs, one online and another offline. Users only need the online key pair to transfer coins from the vault. When users transfer their coins using online key pair, their transactions get confirmed after they stay in the blockchain for an extended timeout period. If someone tries to steal an online key pair and transfer coins into them, the transactions will need to wait in the blockchain for the timeout period, during which, users can use their offline key pair and reverse the malicious transaction and restore his coins to his other address. Users will be also able to use their offline key pair for immediate transfer of coins in his Vault, instead of wait Continue reading >>

Stop Saying Bitcoin Transactions Arent Reversible | Hacker News

Stop Saying Bitcoin Transactions Arent Reversible | Hacker News

Amex can tell a Bank which is analgous to the BitCoin Wallet in this case, to move your money from it into some other Bank, whether you agree or not based on your agreement with Amex and the Bank's agreement with Amex. Nobody can 'force' a BitCoin wallet to transfer funds without the express permission and co-operation of the person who has the wallet's secret key. So in the example, seller and buyer agree on an escrow agent, seller sends merch, buyer says they got it, transaction completes, but if the buy then discovers that the transaction was fraudulent [1] then there is no way for them to "force" the seller to give them back their money or, in the parlance of payments markets, "reverse" the transaction. Can't do it unless the seller initiates a new transaction to send you the funds back, and if they don't or won't, you are out of luck. [1] (say only the top layer of kilos were cocaine and the layers below that were just corn starch) > So in the example, seller and buyer agree on an escrow agent, seller sends merch, buyer says they got it, transaction completes, but if the buy then discovers that the transaction was fraudulent [1] then there is no way for them to "force" the seller to give them back their money or, in the parlance of payments markets, "reverse" the transaction. I think you are missing the point since the same is true of credit cards. Credit cards typically freeze the merchant's money until a given chargeback period is over or they require the merchant to always have a minimal amount of money in their bank account. Even a credit card company can't reverse a transaction if the merchant's bank account is empty. At best, they can refund the buyer out of their own pocket. With Bitcoin "escrowed" transactions, all those schemes are possible. If a buyer wa Continue reading >>

Irreversible Transactions

Irreversible Transactions

When used correctly, Bitcoin's base layer transactions on the blockchain are irreversible and final. It's no exaggeration to say that the entirety of bitcoin's system of blockchain , mining , proof of work , difficulty etc, exist to produce this history of transactions that is computationally impractical to modify. In the literature on electronic cash, this property was often refer to as "solving the double-spending problem". Double-spending is the result of successfully spending some money more than once. Bitcoin users protect themselves from double spending fraud by waiting for confirmations when receiving payments on the blockchain, the transactions become more irreversible as the number of confirmations rises. Other electronic systems prevent double-spending by having a master authoritative source that follows business rules for authorizing each transaction. Bitcoin uses a decentralized system, where a consensus among nodes following the same protocol and proof of work is substituted for a central authority. This means bitcoin has special properties not shared by centralized systems. For example if you keep the private key of a bitcoin secret and the transaction has enough confirmations, then nobody can take the bitcoin from you no matter for what reason, no matter how good the excuse, no matter what. Possession of bitcoin is not enforced by business rules and policy, but cryptography and game theory. Because bitcoin transactions can be final, merchants do not need to hassle customers for extra information like billing address, name, etc, so bitcoin can be used without registering a real name or excluding users based on age, nationality or residency. Finality in transactions means smart contracts can be created with a "code-is-law" ethos. Traders and merchants who Continue reading >>

Why Are Bitcoin Transactions Irreversible? (circle) : Bitcoin

Why Are Bitcoin Transactions Irreversible? (circle) : Bitcoin

Do not use URL shortening services: always submit the real link. Begging/asking for bitcoins is absolutely not allowed, no matter how badly you need the bitcoins. Only requests for donations to large, recognized charities are allowed, and only if there is good reason to believe that the person accepting bitcoins on behalf of the charity is trustworthy. News articles that do not contain the word "Bitcoin" are usually off-topic. This subreddit is not about general financial news. Submissions that are mostly about some other cryptocurrency belong elsewhere. For example, /r/CryptoCurrency is a good place to discuss all cryptocurrencies. Promotion of client software which attempts to alter the Bitcoin protocol without overwhelming consensus is not permitted. Trades should usually not be advertised here. For example, submissions like "Buying 100 BTC" or "Selling my computer for bitcoins" do not belong here. /r/Bitcoin is primarily for news and discussion. Please avoid repetition /r/bitcoin is a subreddit devoted to new information and discussion about Bitcoin and its ecosystem. New merchants are welcome to announce their services for Bitcoin, but after those have been announced they are no longer news and should not be re-posted. Aside from new merchant announcements, those interested in advertising to our audience should consider Reddit's self-serve advertising system . Do not post your Bitcoin address unless someone explicitly asks you to. Be aware that Twitter, etc. is full of impersonation. Continue reading >>

How Bitcoin Transactions Work

How Bitcoin Transactions Work

We explain how Bitcoin transactions are made of inputs and outputs, comparable to double-entry bookkeeping, and how they are linked in irreversible chains. A bitcoin transaction is, at its simplest, one person sending bitcoin to another. To be more technically correct, a transaction tells the bitcoin network that the owner of some bitcoin value authorises the transfer of that value to another owner. Each party has a bitcoin wallet, and the amount is precise up to 8 decimal places. A fraction of bitcoin at 8 decimal places, thats 0.00000001 bitcoins, is called a satoshi, after Bitcoins inventor. On the Lightning Network, milli-satoshis will be supported, thats 1/1000th of a satoshi. The transaction is a public record in bitcoins blockchain ledger that looks a lot like double-entry accounting. Where conventional accounting refers to debits and credits, for example a payment of 10 from Alice to Bob is recorded as a debit of 10 from Alices account and a credit to Bobs account of 10, bitcoin ledger entries consist of inputs and outputs. The input set has Alices wallet and amount information, and the output set has Bobs wallet and amount information. But unlike conventional bookkeeping, the double-entries dont match each other exactly. A single transaction may consist of a set of multiple inputs Alices wallets and a set of multiple outputs Bobs wallets. But the totals dont match. If Alice sends 1 BTC to Bob, hell probably get around 50,000 satoshis less than that, so hell get around 0.9995 BTC. The difference is kept as a transaction fee by the lucky miner who adds the transaction to the ledger. In fiat terms, if we assume 1 BTC is 4000, the fee is around 2, a realistic value at the time of writing. The other reason the double-entries dont match is that the inputs are not di Continue reading >>

Will Bitcoin Get The Ability To Implement Reversible Transactions?

Will Bitcoin Get The Ability To Implement Reversible Transactions?

Will Bitcoin get the ability to implement reversible transactions? As of now, (and it has always been) Bitcoin transactions are irreversible meaning that there is no way to get them back (in case of a scam) unless the recipient decides to send those coins back to its original owner. (sort of like refunds) But, I was thinking of the possibility that Bitcoin may get reversible transactions in the future, in order to prevent scams, fraud, etc. Do you think that such thing will ever exist or what would be the consequences? reversible transactions can be used for scam I guess , someone send you btc and then refund when you already give the goods. thats why i think is very hard for reversible transactions. the real problem is about how to detect frauds however when you invest there is always a risk associated if you expect to make a profit. GBUY3DIRQ6H5RT64RWMEZUJTOJQ3MBUS4K7XDCR6PGT7UC5JX47OZR32 reversible transactions can be used for scam I guess , someone send you btc and then refund when you already give the goods. thats why i think is very hard for reversible transactions. the real problem is about how to detect frauds however when you invest there is always a risk associated if you expect to make a profit. Maybe that is why Bitcoin is very similar to cash (fiat), but still cash can be refunded (reversible) whereas Bitcoin not. Anyways, I think that it is not that important since there is always the ability to use escrow services before conducting a transaction. Quote from: Abiky on July 22, 2016, 11:12:06 PM As of now, (and it has always been) Bitcoin transactions are irreversible meaning that there is no way to get them back (in case of a scam) unless the recipient decides to send those coins back to its original owner. (sort of like refunds) But, I was thinking of th Continue reading >>

3 Things To Know About Bitcoin Confirmations

3 Things To Know About Bitcoin Confirmations

Roughly every ten minutes, a new block is created and added to the blockchain through the mining process. This block verifies and records any new transactions. The transactions are then said to have been confirmed by the Bitcoin network. For example, if Sean sends one bitcoin to John, this transaction will remain unconfirmed until the next block is created. Once that block is created and the new transaction is verified and included in that block, the transaction will have one confirmation. Approximately every ten minutes thereafter, a new block is created and the transaction is reconfirmed by the Bitcoin network. While some services are instant or only require one confirmation, many Bitcoin companies will require more as each confirmation greatly decreases the likelihood of a payment being reversed. It is common for six confirmations to be required which takes about an hour. How many Bitcoin Confirmations are Enough? Payments with 0 confirmations can still be reversed! Wait for at least one. One confirmation is enough for small Bitcoin payments less than $1,000. Enough for payments $1,000 - $10,000. Most exchanges require 3 confirmations for deposits. Enough for large payments between $10,000 - $1,000,000. Six is standard for most transactions to be considered secure. Suggested for large payments greater than $1,000,000. Less is likely fine, but this is to be safe! Once you make a transaction, your wallet should give you an option to view the transaction on a block explorer or give you the transaction ID. A transaction ID looks like this: 7a43510802e113b7059851ef0a8a5c3625db37541861dd982f56253b2d5c4ff9 To check the number of confirmations for a transaction, paste the ID into a block explorer like blockchain.info: Press enter and then youll see more details about your t Continue reading >>

How To Cancel An Unconfirmed Bitcoin Transaction | Coincentral

How To Cancel An Unconfirmed Bitcoin Transaction | Coincentral

How to cancel an unconfirmed Bitcoin transaction Once confirmed, Bitcoin transactions are irreversible and you are unable to cancel them. How to cancel an unconfirmed bitcoin transaction? To cancel an unconfirmed bitcoin transaction, you need to use a Replace by Fee (RBF) protocol to replace your original transaction with a new one using a higher transaction fee. If you aren't able to use RBF, you may be able to cancel your transaction by double spending using a higher fee. Can I cancel a confirmed bitcoin transaction? No, you cannot cancel a confirmed Bitcoin transaction. How to cancel an unconfirmed Bitcoin transaction When sending Bitcoin , it can be easy to make a small mistake causing you to want to cancel your Bitcoin transaction. Oftentimes, funds can become stuck if the miner fee you enter isnt high enough for any miner to confirm your transaction. Unfortunately, the steps to cancel a Bitcoin transaction are a little more complicated than just pressing an Undo button. In this brief guide, Ill walk you through the process to cancel an unconfirmed Bitcoin transaction. The first step in canceling your Bitcoin transaction is to check whether or not it has any confirmations. When you made your transaction, you should have gotten a transaction ID that looks something like this: 240615b6ab59a5adb19ba52cb969aeb16ff82d2082b7a72cb2912c5d38c297cf Take your transaction ID and enter it into a block explorer. Blockchain.info is a great option. On the next page, you can see information about your transaction including the number of its confirmations. If the number of confirmations is greater than 0, you wont be able to cancel your transaction. Confirmed transactions on the blockchain are permanent and irreversible. Just wait and your transaction will finish going through soon Continue reading >>

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