Why does a BTC block takes up to 10 minutes
And so, there is a basic rule: Bitcoin transaction speed is affected by two factors: consensus and block transfer rate on the network.
The consensus mechanism that Bitcoin uses is known as Proof of Work (PoW).
In order for the block to be attached to the chain, the node must prove that it has done some work to solve a mathematical problem. In this article we will not dwell on this mathematical problem, for this there is an article about Bitcoin mining, the main thing is to understand that it is intractable.
On the other hand, each node’s solution is unique, as it depends on the transactions it has chosen for its block.
The reason why solving this problem is difficult is due to the fact that if it were not so, there would be many solutions from different nodes at the same time, which would create chaos. Then it would be impossible to determine which block would be added to the blockchain.
If the problem is intractable, then the number of correct blocks swarming in the network will be small, which will make it easier to reach consensus.
But even if the problem being solved is complex, there is a small chance that two nodes will come to a solution at the same time.
When each node transmits its decision to the network, to other nodes that it knows, the nodes choose one of the blocks, probably the one they knew first, and start looking for the next block from there.
This is the so-called fork of the chain, because now there are two chains that differ by the last block.
The solution to this problem is to wait for which block will be opened next and which chain it will join. Making this chain longer and leaving the other one aside. The chain that is longer wins.
The whole process takes about 10 minutes, and if he does not cope during this time, then there is a mechanism that allows you to change the complexity of mining and get closer.
The decision of 10 minutes was made based on the assumption that it would take 1 minute for any new block to reach all nodes of the network.
This means that after one node has found a solution, within one minute the other nodes will do useless work trying to find a solution that has already been found.
Based on this, the inventor of Bitcoin decided that spending more than 10% of the network’s resources on meaningless work is the maximum allowable level. That’s why he made it so that it took only 10 minutes to solve the problem.
If he was satisfied with 20%, he could choose the difficulty of 5 minutes.
We know that complexity is fixed and determined by time. But also the fact that the power of mining equipment is developing, allowing you to solve the problem in less time.
That is why the Bitcoin protocol has a rule for adjusting the complexity from the average time it took to solve blocks over the past 2 weeks.
Why wait 1 hour?
All this is good as far as the consensus mechanism is concerned, but there is another problem that needs to be solved. It is associated with scammers or “hackers” (although many do not really like this name).
In the case of blockchain technology, the only way to cheat is to rewrite history, which we will talk about in detail now.
When a new block is created (its solution is found), it is easy for anyone to accept that it is valid. All they have to do is check the signatures on the transactions inside and whether they own the coins they want to spend.
Thus, we prevent the possibility of payment using BTC that do not belong to them. But you can cheat if you manage to cancel the transaction.
Let’s say we pay someone Bitcoins, and in return we get something like a PlayStation 5.
After we get our console and make sure everything is working as expected, we can theoretically create a longer blockchain that does not include our payment.
To do this, we will have to start with the block in which our transaction with payment for the purchased goods is located.
To prevent this problem, the PlayStation seller should not deliver the goods to us as soon as he sees that the block has integrated the transaction with the payment. What he should do is wait until a few more blocks are added to the chain.
Thanks to this, we will be sure that it will be very difficult for us to create a longer blockchain to overcome the consensus.
Fortunately, Satoshi Nakamoto took the trouble to do this.
Thanks to this, you can be sure that it will be very difficult for us to create a longer blockchain to defeat consensus.
Fortunately, Satoshi Nakamoto took the trouble to do the mathematical calculations for us and write them down in the Bitcoin white paper.
In it, he determined that if you wait for 6 confirmation blocks, and the attacker has 10% of the network power, then his chances will be only 0.1%. Unlikely for an asset worth only a few hundred euros or dollars.
Shorter or longer block time
If a shortened block time is adopted, then this will have some advantages and some disadvantages.
- Quick confirmations for those who want to wait for only one confirmation.
- Fewer differences in payments to manners (less dependence on large groups)
- Large bandwidth is required (for communication between nodes)
- More forks and more time to reorganize
- A significant part of the computing power of the network will be wasted, which will lead to a decrease in security efficiency.
The main advantage of reducing the block time is to reduce the time required to perform a single confirmation.
Of course, a single commit with a shorter block time is less secure than with a longer block time, but at least it is more secure than if we were waiting for 0 confirmations.
This speed of confirmation can be a great advantage for payments of small value, for example, when paying for a cup of coffee, taxi or something else for a few dollars or euros.
Credit cards, for example, have risks for the merchant who accepts them, but at the end of the day the losses are so small that they are part of doing business with this payment method.
While it is also true that some merchants may accept 0-confirmation transactions, if they don’t mind some risk, they should just charge a little more for insurance, as is the case with credit cards, and accept any fraud.
Another solution to the problem of 0 confirmations may be the use of “green addresses”.
They can be used for transactions with zero confirmation. These services may be offered by large corporations or supported by fraud insurance (for a small transaction fee).
In the case of a longer block time, the advantages and disadvantages will be reversed, resulting in more advantages than in the case of a shorter block time.
In this case, second-tier solutions, such as the Lightning Network, could be ideally suited in order not to lose 10-minute advantages with cheap and fast trading with BTC.