Instant Confirmations and Double Spends

When making a transaction with BTC using a wallet, it is broadcast to the network. A miner will verify the transaction by checking that the amount you are sending and address matches an unspent input of a previous transaction in the chain. The miner will include your transaction in a pool of other transactions and include them in a block. They then attempt to solve the block. Miners compete to solve the block. It usually takes an average of 10 minutes for a miner somewhere to crack a block and for any given transaction to be added to the blockchain ledger.

Generally, particularly when being a receiver of BTC from an unknown or untrusted party, it’s recommended to wait for six confirmations to consider the transaction well and truly concreted into the blockchain with no risk that there has been a double or multiple spend that could later invalidate the transaction. This would take approximately one hour from the time that the transaction is submitted.
For relatively small amounts, one confirmation may be considered enough. Interestingly, some payment service providers such as CoinDesk give a nice friendly confirmation message within seconds of a payment made to them on behalf of a merchant. How is this possible when it takes several minutes for a transaction to clear on the blockchain? In this case, Coindesk validates your transaction, transmits it to the BTC network, tells the merchant that monies have been received and then kind of assumes that the transaction will be OK.

It is willingly taking on the risk that a payment could be dishonest and that a double spend could be happening. If a double spend occurs, Coindesk could either be lucky or unlucky; lucky if their transaction makes its way into the main chain; unlucky if their transaction ends up in a block which later becomes orphaned. Coindesk is running a succesful service so its assumed that double spends do not occur against them so frequenctly.

Why would anyone want to perform a double spend? In an attempt to obtain goods or services from 2 seperate parties with the same cash! kind of like trying to write 2 identical cheques with 2 people attempting to pay with them at the same time in 2 different cities. Before the merchants and the banks know what’s going on, the fraudsters have made off with double values of goods.

We’ll discuss more about double spends in the future. For now it’s good to know that if you really need a BTC payment to be accepted in a few seconds and it’s a relatively small amount, services like Coindesk exist that make this possible.

Do Percent Completes mean anything on schedules

Most people working on IT projects are familiar with the type of meeting where a Project Manager calls up a project plan and asks team members to report progress on particular tasks. Usually this is in the form of reporting a percent complete. Important questions are are they useful and do they mean anything? I once worked with a respected Project Manager who believed not. She worked on the basis that tasks have three states only: Not Started, In Progress or Complete.

A problem with percent completes is that they are highly subjective to the person reporting them. One team members 20% will be another team members’s 40%. A key idea of project plans is to breakdown work into chunks and work out the sequence that tasks need to be completed, i.e. which tasks are dependent on others being finished. As a project manager or scheduler, Knowing that a task is 30% complete is possibly telling you nothing more than the task was started but not finished, and that it’s not possible for a dependent task to start yet.

One rule I support that I’ve seen used in practice is the 5 day rule. This means that no task in a schedule should be more than 5 days long. If a team member identifies a task that is 20 days long, they can try to identify four separate stages lasting approximately 5 days. Using shorter duration tasks will make it more practical to track it as having only Not Started, In Progress or Complete status.

Percent Completes do have their place, for example in large construction projects that need to use Earned Value calculations to examine cost and schedule together and calculate values such as CTC (Cost to complete) tasks, but for software projects they often do not add value.

Bitcoin expert Andreas Antonopoulos

This is the first part of a 2 part interview with Bitcoin expert Andreas Antonopoulos. A highly engaging interview as he conveys many aspects including the potential of Bitcoin to reach people with no access to modern banking facilities.

Trace Mayer On Bitcoin

In this interview economist Trace Mayer gives a comprehensive upbeat account of Bitcoin and how it’s succeeding in many ways. He makes some great comparisons between Bitcoin and Gold and explains how you can start investing in this innovative financial technology.

Banks on Digital Currency and the BlockChain

JP Morgan’s Jamie Dimon recently made some comments about Bitcoin at Davos Economic forum. Here are a couple of quotes and my comments on each-

“Governments like to control currency, know where it goes to and control it for monetary purposes”.

The only way governments can and are controlling Bitcoin is by overseeing the gateway to entering the system, i.e. exchanges that buy and sell BTC for Fiat currency. Whether this is a good or bad depends on many things including how liberatarian your views are.

“There’s nothing behind a Bitcoin …. The Blockchain is a technology, and yes it’s real”

This goes along with this current trend of banks trying to separate the perceived negative connotations of “Bitcoin” with the highly innovative technology of the “BlockChain”. So here’s the deal: You can’t have one without the other. It’s like saying we don’t like the idea of cars, but engines are great. It’s the vision and value of the car (or truck or motorbike….) that drove (no pun intended) the invention of the engine.

The Bitcoin (or any Altcoin) needs to possess value as an incentive for miners to validate and mine blocks, securing the blockchain and any other ‘applications’ such as secure contracts.

This is the clip from the interview:

Bitcoin being talked about by banks (in good or bad light) is a sure sign of it’s increasing success.

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