Thursday, BitQuick.co, a peer-to-peer Bitcoin trading platform which processes around US$1.4 million worth of bitcoin transactions every month, announced the integration of BitGo Instant. The company aims at securing zero-confirmation payments that will improve user experience and overall security of the trading platform.
Using BitGo’s prominent multi-signature technology, the company ensures protection against double spending. The service fee for BitGo Instant is free of charge for transactions that are less than 1 BTC. For payments that are worth more than 1 Bitcoin, BitQuick charges a 0.1% sender’s fee.
Jab Mubaslat, a BitQuick CEO and Founder commented:
"The new BitGo Instant feature comes at a perfect time. Due to Bitcoin Core's unwillingness to increase the block size, innovations such as BitGo Instant are more useful than ever.”
Instant Mechanism to accept Bitcoin
BitGo Instant is a zero-confirmation mechanism which allows bitcoin wallet and trading platforms to accept bitcoin instantly without waiting 10 minutes or more for the transaction to be secured in a block by miners all over the world. Typically, it is possible to spend unconfirmed bitcoin at multiple outlets with little technical knowledge and this was demonstrated by Bitcoin Core developer, Peter Todd, when he launched successful double spending attacks on Coinbase to purchase Reddit Gold on January 5.
Pretty amusing that @coinbase rejects opt-in RBF, yet happily accepts txs for zeroconf with fees low enough to be trivial to doublespend.
— Peter Todd (@petertoddbtc) January 6, 2016
While Todd’s solution called Opt-in Replace-by-Fee has been criticized for its ineffectiveness by bitcoin experts and entrepreneurs, including Coinbase CEO, Brian Armstrong, and ShapeShift founder and CEO, Erik Voorhees, it is understood that transactions with zero confirmation are unsecure for both the senders and receivers.
BitGo recognized this major problem of many bitcoin startups and platforms. The issue was, bitcoin payment processing platforms and technology providers like BitQuick cannot stop providing zero-confirmation payment option as users will refrain from using their service due to its inefficiency. This has been the same for most major bitcoin platforms in the industry today.
ShapeShift CEO Erik Voorhees explained, “Zero-conf was crucial in the user experience of SatoshiDICE at its founding. The same is true with ShapeShift today, which enables zero-conf for certain transactions. The same is true for a BitPay invoice, or a digital content delivery service, or tokenized access, or any of the myriad blockchain business models yet to be born.”
“The choice between user-experience and security won't be up to the business: it will be rigid, set in stone by the protocol – sometimes this is wise, sometimes not,” he added.
BitGo Instant, however, provides startups with a platform with a secure technology that guarantees genuine zero-confirmation payment, reducing the risk of accepting payments that haven’t been secured by the miners.