What is a Confirmation?

In the world of crypto, the meaning of confirmation refers to the process of adding a new transaction to the blockchain, which is a public ledger that records all transactions made with a particular cryptocurrency.

When someone wants to make a transaction, such as sending some crypto to another person, the transaction needs to be confirmed by the network before it is processed. The process of confirmation is done by special computers called nodes, which check the transaction to make sure it is valid and conforms to the rules of the network.

Once the transaction has been confirmed by the network, it is added to the blockchain and becomes permanent. The more confirmations a transaction has, the more secure it is considered to be. This is because, as more confirmations are added, it becomes more difficult for a malicious actor to change or reverse the transaction.

Simplified Example

Cryptocurrency confirmation can be likened to a bank manager checking a customer's signature on a check. In the same way, when a cryptocurrency transaction is made, it needs to be 'confirmed' before it is approved and completed.

When the customer signs a check, the bank manager must verify that it is a legitimate signature, and this is done by comparing it to the customer's usual signature on file. Cryptocurrency works in a similar way, except that the 'signature' is replaced by a unique string of numbers and characters known as a 'hash'. This 'hash' is like a fingerprint that is unique to the transaction and is used for verification purposes.

When a cryptocurrency transaction is initiated, it is broadcast to the network of computers that make up the blockchain. These computers will then check the validity of the transaction, by verifying the hash and other associated data. If the transaction is verified, it is added to the blockchain and the transaction is complete. If the transaction is not correct or valid, it will be rejected by the computers. In this way, cryptocurrency transactions are subject to a sort of 'verification process' that ensures that only legitimate transactions are approved.

History of the Term Confirmation

The term "confirmation" in the cryptocurrency context emerged in the early 2010s alongside the development of blockchain technology. As blockchain networks gained traction, the need for a standardized term to describe the process of verifying and validating transactions on the blockchain became apparent. The term "confirmation" was adopted due to its well-established meaning in other contexts, such as law and scientific research, where it implies a rigorous and thorough verification process.


Sending Bitcoin: When someone sends Bitcoin to another person, the transaction is broadcast to the network of nodes. The nodes then check the transaction to make sure it is valid, such as checking that the sender has enough Bitcoin to send and that the transaction follows the rules of the Bitcoin network. Once the transaction is confirmed by the network, it is added to the Bitcoin blockchain. The standard number of confirmations for a Bitcoin transaction is 6, meaning that the transaction must be confirmed by the network 6 times before it is considered fully confirmed.

Mining a block: In the process of mining, nodes called miners compete to add a new block of transactions to the blockchain. Once a miner successfully adds a block, it is broadcast to the network and the other miners confirm it by adding it to their copy of the blockchain. The number of confirmations for a block is simply the number of blocks that are added after it.

Smart contract execution: In smart contract platforms like Ethereum, confirmations are necessary for the execution of a smart contract. Once a smart contract is deployed on the Ethereum network, it needs confirmations from the network in order to be executed. The standard number of confirmations for an Ethereum smart contract is 12.

  • Block: A block in blockchain technology is a collection of data records that are linked and secured using cryptography.

  • Validator: The meaning of validator refers to an agent in a blockchain network that is responsible for verifying the validity of transactions, maintaining the ledger, and ensuring consensus among users.