What Is Confirmation? | Cryptocurrency Glossary

Crypto Asset (Cryptocurrency) Transactions Cannot Begin Without Confirmation

Currencies issued by governments or central banks are backed by trust in the issuing authority; when buying, selling, or settling transactions, users rely on the credibility of those currencies or banknotes. In
contrast, since cryptocurrencies have no central authority, the credibility of transactions depends on users acting in good faith to ensure that transactions are conducted correctly.

Bitcoin has a mechanism where users mutually confirm the validity of transactions. New transactions are validated by miners and added to a new block—a continuation of the chain of past transactions—thereby being recognized as legitimate.

This is because without this validation process, any fraudulent transactions that occur would go unchecked, potentially causing subsequent transactions to become fraudulent as well and leading to a loss of trust in the cryptocurrency. To have a transaction validated
, a fee is paid to the miners.

This is not a bribe to force approval; rather, with numerous transactions worldwide awaiting confirmation, offering a higher fee allows miners to begin the verification process sooner, potentially speeding up the approval process. While transactions may sometimes become orphan blocks instead of being added to the blockchain
, generally, a transaction is recognized by users as highly secure once it receives six confirmations. In the case of orphan blocks
, it is said that they typically only reach about two confirmations.